How a Strong Team Will Help You Land Big Deals
This is an excerpt from Tom Searcy's latest book, "How to Close a Deal Like Warren Buffett--Lessons from the World's Greatest Dealmaker" written with Henry DeVries and published by McGraw-Hill, available now.
When Warren Buffett bought the 77.5% of BNSF Railroad that he did not already own, he spent more than $26 billion in less than a week. That swift a strike on such an enormous deal takes confidence based upon knowledge and a checkbook the size of Fort Knox.
You may not have the latter, but you can make the equivalent big deal for your business if you have the confidence. One of the best ways to get confidence is by using a team. As I have hunted big deals myself, taught the skills of them and studied Warren Buffett for this book, some consistent patterns have developed—one of them is the need for a team.
Start with the other team
When you are making a big sale, more often than not it is not just one person who has to agree to it. The power to say 'no' trumps the power to say 'yes' on deals because of the complexity of the post sale integration. For that reason, you have to look at all of the influencers and interested parties on the other team and build your strategy around them. The key decision-maker may be very excited about the possibilities of working together, but that enthusiasm is not always enough to overcome the reservations of the board, the banks or other investors. Add in the voices of advisers, key management leaders in the company and even family members and you have a Greek chorus of tragedy in the background.
What to do
Assemble your own team. You need to be able to answer the challenges, increase the confidence and remove the obstacles of the other interested parties if you are going to land your biggest deals. What roles should they serve?
- Different eyes--Looking at the deal through the eyes of your own advisers, especially those who can anticipate the concerns of those voices from the other side, gives you insight that is critical to winning. By building a strategy with your team, you are in a better position to see all angles and all viewpoints.
- Better eyes--Expand your circle for your biggest deals. Seek out professional advisers you trust, business contacts who have done these larger size sales and transactions and take in their counsel. This is not going to be just like your other deals with an extra zero or two at the end of the deal size transaction. Every zero is a multiple of ten, which means complexity and competition will go up by the same multiple. Make certain you have the mental and experiential muscle looking at this opportunity with you.
- Strong voices--There is no value in seeking counsel that will only agree with you. Find those players with whom you can have vigorous dialogue and will take an opposing view to sharpen your perspective. One caution that every business leader should follow: Never fall in love with any one deal- it clouds your judgment. Strong voices can talk you down from the irrational ledge.
Buffett's deals follow these steps and yours should as well. You may not be using a billion dollar checkbook for your deal, but at whatever size, your biggest deals will be better if you follow the pattern.