I have always seen deal-making (buying and selling businesses or assets, raising money, refinancing or entering into collaborative ventures) as an “engineered” process, never an event.
One that can be applied across asset classes and deal sizes, large or small.
A framework within, which inter-connected issues, and decisions need to be made about the future, not a sequential process.
Above all, a necessity to ruthlessly remove all the “junk” that lies in the heads of the people around the table, and those they are turning to for advice.
- Start with the “ideal destination”, an agreed set of desired personal and professional outcomes, that are mutually-attractive.
- Work backwards to today considering the alternatives (speed and quality) .
- Risks and rewards of each.
- Preventative and contingent actions readily available.
- Select the simplest and highest quality alternative.
- Communicate the goals (milestones) that must accomplished to the key constituents along the way, set accountabilities and agree deadlines.
- Ahead of each milestone, ask what is it we want the other party(s) to do, and how can we show it is obviously in their self-interest to agree. Where our own self-interest is met too.
- At any time, ask where are we exactly?
- Identify and agree what adjustments need to be made for more impressive outcomes, incorrect assumptions or deal obstacles? (time, energy, capital, resources, new innovation, and so on).
- Nothing more.
Repeat after me: The enemy of deal-making is those with zero skin-in-the-game, who seek to justify their value (ego) through unwarranted complexity.
