3 People You Need to Close Big Deals
While closing a deal, you're going to need help from people within the other company. It's a careful, calculated balancing act of different relationships.
Paul Weinstein, a Silicon Valley-based entrepreneur and adviser to technology, entertainment, and media companies, has raised hundreds of millions of dollars in capital and has been a key player in acquisitions with billions in total value. He says every company has that one big deal that transformed it from a fledgling startup to a credible business with respectable investors and partners. The key is to successfully close the deal when it comes.
"Based on many years as a business founder, adviser, and investor, I would argue that getting the green light has as much to do with understanding human nature as it does with business fundamentals and finances," he writes in the Harvard Business Review.
Weinstein says there are three players you need to be aware of: "Specifically, closing a deal requires identifying three key stakeholders who have the power to influence the decision: champions, decision makers, and blockers," he writes.
Closing the deal depends on your ability to deal with all three effectively. "If you can support your champion, coax your blocker, and convince your decision maker, you're golden," he says. "Each of the three stakeholders brings a unique set of motivations to the table--your job is to understand them in order to align their interests to get the deal done."
Below, read how to master the balance between your champion, decision maker, and blocker.
1. Lift up your champion
A champion is an employee of the company you're doing business with who "is deeply invested in getting the deal signed." He will help you get a foot in the door and will help persuade the decision maker to say yes. The hard part is targeting the right champion. "While a champion has influence over the decision, he is not the ultimate decision maker. In fact, champions rarely have significant power in the organization--but they know who does and their expertise is usually respected. Champions understand the personalities and processes on a granular level and can navigate the culture within an organization," Weinstein writes.
The champion's motivation is status. "Champions want to feel important. The champions I've known have been motivated by a host of related factors--generating personal visibility, drawing attention and resources to their domain, or being perceived as innovators," he writes. "Whatever the specific reason for endorsing a deal, the common thread is that champions are at a point in their career where they are willing to take a risk." Find someone who is not senior enough to be cautious, a rising star, and/or a risk-taker who is well-liked and can influence the decision maker.
2. Influence the decision maker
To fully understand the nature of decision makers, you need to realize they are the opposite of a champion--they are averse to risk because they are responsible for the deal's impact on the company. "Generally senior executives, decision makers have the power to say yes to a deal and are held accountable for the final outcome," Weinstein says. "As such, they have a lot to lose and their anxiety level is in direct correlation with the level of expected scrutiny should the deal fail. Regardless of where they started their careers, most decision makers spend the majority of their days dealing with macro issues and are unlikely to have the expertise required to have a detailed understanding of your company or product. This means that they rely on the advice of others for recommendations."
The key to wooing a decision maker is through a champion who can provide "a trail of sound and thoughtful due diligence," he says, through information, concrete data, risk analysis, and outside validation to prove the deal's worthiness to other executives. This process can take months of building credibility and data that will limit a decision maker's risk.
3. Neutralize the blockers
Blockers are exactly what they sound like--people who have the decision maker's ear and can kill a deal. "While champions are aggressive and decision makers are risk averse, blockers are subversive," Weinstein writes. "Blockers don't have the power to say yes, but they can get in your way and make it hard for the decision maker to give the go-ahead. For a variety of reasons, blockers are intent on derailing the deal. He or she may have an 'alternative' idea that rivals what the champion is pushing or they may be concerned about losing the limelight to an adversary." Weinstein says blockers want to feel important in their role as a naysayer. Your job is to win them over or neutralize their skepticism.
WILL YAKOWICZ | Staff Writer | Reporter, Inc.com
Will Yakowicz is a staff writer for Inc. magazine. He has covered business, crime, and local politics for The Brooklyn Paper and was the editor of Park Slope Patch. He has also reported in the West Bank and Moscow for Tablet Magazine. He lives in Brooklyn, New York.