Chapter 7 Pay-Out or Post-Mortem – How to be a Better Deal-Closer

CHAPTER 7

Pay-Out or Post-Mortem

A rejection is nothing more than a necessary step in the pursuit of success.

–Businessman, Bo Bennett

Job done—this is when you can sit back and take credit for a successful deal execution. But, sometimes, closing a deal is not always possible and you need to learn not to take such occasions to heart. Nonetheless, every deal—successful or otherwise—contains within it learnings for the future. As I said at the start of this book, successful deal-closing is at least in part a matter of practice.

Measure Every Deal Success-Wise

From a corporate growth perspective, you should ideally have systems in place to measure success in terms of striking the deal—on every deal from a process, pace, and direction perspective. These systems should monitor all aspects of the deal performance, outcomes, and indeed, even in the learnings you take from a failed deal. Executing a successful deal is rarely a simple or easy undertaking. Deals usually swing and sway from their original strategic, financial, or operational imperatives and can look substantially different at the end of the process.

At the end of a deal, when perhaps you least feel like it, you really should schedule some time to methodically review the key areas of the deal journey, the outcomes, learnings, and areas for improvement for future deals and to note newly introduced tactics that worked well and could be used again in future.

As part of your deal review process, you should ideally identify items that went well and those did not so as to maximize deal chances next time around. Even better, if you can afford an independent benchmarking analysis, then it might be worthwhile to consider this. The sort of matters that could be examined include: (a) how the deal process added value to the general organizational value; (b) how learnings from the deal process were captured in the organizational knowledge management structures; (c) the degree to which the organization and its stakeholders may have aligned or otherwise during the deal process; and (d) the balance between short term gains and longer term organizational value creation.

Don’t Be Hard on Yourself

Despite your best efforts in putting a good deal on the table, the vagaries of deal-closing (as referenced throughout this book) mean that things can—and often do—go wrong. Not all deal discussions will result in a successful deal. Sometimes deadlock or dispute will arise (see Chapter 5 for advice on getting a deal back on track).

Be aware that a “No” from the other side does not always mean the deal is at an end. Too often parties walk away at this point, but many times in deal discussions I have heard “No” and yet I have seen a way forward. A good deal-closer will use “No” as a cue to reframe and try a new tactic.

Be aware too that not consummating a deal does not always mean failure. It might even be the right outcome—perhaps there wasn’t really a deal there. I have seen this occur, for example, because despite the strategic appeal the numbers just did not work out or because the proposed arrangement was not in the longer-term business interests of one or both parties.

An example of this occurred during the year I spent working on a significant, and potentially lucrative, deal for a resources company. The strategy made sense, the numbers stacked up and the deal would have brought good immediate returns. However, macro-economic circumstances changed during the year, including a significant drop in the value of the commodity in question, so ultimately the deal could not—and did not—proceed. Far from regarding the unsuccessful deal as a failure, we concluded that perhaps we had had a lucky escape!

Instead of failing or collapsing, a deal might just be drifting too far to one side to continue in its current guise. Here, it might be possible to suggest a time out and a revised negotiation process, but this will of course require solid relationship foundations to date and common grounds for value. Alternatively, depending upon how things are going, you could make alternative offers in relation to key components of the deal discussion, such as price, contract duration, and other key terms.

Beware also the magic “Yes” that comes too easily. If you have received a “Yes” response to your proposal too quickly, it might actually mean that you have misinterpreted the deal landscape and therefore have opened too easily. Deal-closing is about getting to the right deal through a process, not about capitulating early to get the deal done.

The Blocked Technology Deals

For the final time, back to the two blocked technology deals, on a few occasions, I reached seemingly intractable impasses with the other side.

Have you experienced this?

What did you do?

What did I do?

To move things along, rather than simply raise the white flags, I used “No” as a cue to reframe and try a new tactic.

And the outcome—I’m pleased to say that, following a two-year impasse, I managed to unblock both deals worth many hundreds of millions of dollars. Deal done.

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Conduct a Formal Post-Mortem on Your Deal Journey

Win or lose, ensure you capture your learnings to use in the next deal by doing a formal post-mortem of your whole deal journey.

Sample Deal Post-Mortem Chart

In conducting your post-mortem analysis be sure to be as comprehensive as possible in analyzing all financial, commercial, operational, and any post-deal integration matters. Of course, systems must be in place to ensure that the information you use is accurate and up-to-date, while allowing for measurement of ongoing continuous improvement. Your post-mortem should, of course, have systems to measure success to include factors such as $ results, cost efficiencies and savings, stakeholder engagement and satisfaction, operational efficiencies, innovation, and so on.

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Summary

Measure every deal success-wise.

Don’t be hard on yourself.

Conduct a formal post-mortem on your deal journey.

Executive Insights

Dermot Mannion

Tell me about one of your biggest learnings that you took away from hindsight in your deal-closing experience.

Answer:

For me, it is all about momentum. Keep the negotiations going. You know, when you start going through the documentation, do not get bogged down on the first point of disagreement. Simply note it and move on. Sweep through the document, get to the end. What you will probably find is that, first time round there will be thirty areas of disagreement, the second time you sweep the document, you could be down to twenty, and ten. We call this the process of successive approximation. Eventually, you will get to the end and you’ll be down to just two or three issues and you’re creating a much better climate in which to resolve those and get the deal done.

Kingsley Aikins

How have post-mortem exercises revealed important new improvements in how you conducted future deal-closing exercises?

Answer:

Well, I think I mentioned earlier about how there were four phases and we divided all four phases to doing our business, which were research, cultivation, solicitation and the ask, and then the final piece-stewardship, which is kind of after the deal has happened. We found that was a really important part because we sensed every deal was just a down payment on the next deal. But, you know, all the research shows that the reason why people give up doing business with another organization is because they detect a sense of indifference toward them. In other words, we take the deal for granted. In fact, we just do not make enough fuss about them in many ways.

So we had a whole stewardship program where we thanked people five different ways, we were consistently using other people to thank them, we were always asking and trying to find out why people were doing business with us. Certainly, we wanted to see would they refer us to other people. All those things improved the information bank of knowledge we had about why the deal was successful, what are the elements we learned from it, and what can we change going forward for future deals.

Jeff Caselden

Tell me about one of your biggest learnings that you took away from hindsight in your deal-closing experience.

Answer:

Yes, absolutely, I think the biggest one for me in this case was to know exactly what you are selling and the service you are providing, inside and out. In this scenario, as I mentioned, I came in a bit later to the game as an “account manager” for this client, and well after the initial negotiations and plans had been set out. The more time I spent in this situation, the more apparent and clear it became to me that in many ways, we had sort of advertised a Mercedes but sold the client a Yugo. We simply could not deliver on the expectations we set, and without a really clear sense of what our client needed and valued, we created a scenario for ourselves where we really were not going to come out as winners. At least not without some serious pain along the way.

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Questions

1. What should your systems to measure the success of the deal struck monitor?

These systems should monitor all aspects of the deal performance, outcomes and, indeed, even in the learnings you take from a failed deal.

2. Can a failed deal ever be a good result?

“No” from the other side does not always mean the deal is at an end. Too often parties walk away at this point, but many times in deal discussions we have heard “No” and yet we have seen a way forward. A good deal-closer will use “No” as a cue to reframe and try a new tactic.

Be aware too that not consummating a deal does not always mean failure. It might even be the right outcome—perhaps there wasn’t really a deal there.

https://expertdealcloser.com