My cousin, Linda Wolff, and a partner, Joyce Burk Brown, recently wrote a children’s book, The Magic in Listening (https://www.amazon.com/Magic-Listening-Adventures/dp/B09PMKNDN9). The targeted audience for the book is children, but like many works of children’s literature, the lessons conveyed are valuable for incorporation into life and business. I had a client that made all his employees read The Little Red Hen (https://americanliterature.com/childrens-stories/the-little-red-hen) before starting work at the company.
The focus of Linda & Joyce’s book is the value of listening. An action that few people assess high enough in significance in creating an environment for successful personal interaction. I can convey with confidence as a twenty-nine-year professional M&A intermediary who has successfully facilitated over 300 transactions personally and provided executive, administrative oversight for 1000’s of additional deals, that few things are as important to achieving a desired negotiating outcome as listening to the parties and their professional advisors. As I tell all of my business brokers early in training, “No one ever listened themselves out of a deal”.
As conveyed in The Magic of Listening, there are multiple important steps in an active listening process.
The first step is to absorb available content with multiple senses. The more senses that can be employed directly the better. That is why high level, sophisticated negotiations are always best conducted in person. All businesspeople in the modern world have communicated by email. It is convenient, efficient, and allows for articulation of relevant information. It is also one-sided communication that is often perceived as having an authoritarian voice lacking empathy and humor. Satisfactory for administrative communication, but not the best tool for persuasion and getting parties to “Yes”. Telephone conversations are better than written communication in terms of the opportunity for persuasion and articulating nuanced information because dynamic real time engagement can occur between parties. Video conferencing is even superior because eye contact can be made with other parties and body language viewed. However, all three of these communication methods pale in comparison to an in-person meeting.
What is the value of taking the time and making the effort to meet in person? The benefits are abundant. The first benefit is that the parties will give each other their undivided attention. How many people multitask on a phone call or have someone walk into a meeting or pause 100% engagement to answer a cell phone call or respond to a text on a Zoom call dividing their attention. A turned off camera is a good indication a party is multi-tasking when video conferencing. These distractions do not commonly happen in a face-to-face meeting.
Second, the ability to engage with the maximum number of senses exists in person. The first level of communication occurs with our eyes in every live personal interaction. Did the person arrive on time, a show of respect for the other party, or late, a demonstration of perceived self-importance? Did the party dress professionally or dress casually for the interaction? Dress for success is more than a catchy phrase. It can be a difference maker. It is human nature to assess a person’s attire and grooming. That assessment can tell a lot about another person. Does the person look into your eyes? Are they nervous about the interaction? Business negotiations are often a “BIG STAKES” poker game. Knowing how to read people can give a seller, buyer, or intermediary a competitive advantage in negotiations. The following article conveys some of the things to look for when playing poker, many of them apply to business negotiations: https://www.pokernews.com/strategy/10-hold-em-tips-5-common-poker-tells-to-look-for-25433.htm
The next level of communication is processed with our ears. Listen closely to content and how it is delivered. Take notes to track positions and facts. It can be a powerful tool to use someone’s own words against them in negotiations. Most people desire to be a person who stands behind their words. Do statements have an edge of anger or humor? Nuances like those can convey significant information that can be used to achieve a middle ground.
Watching & listening to a person conveys substantial information. However, touch & smell are also important senses to incorporate into a meeting assessment of another person. A person says a lot with their handshake. How would you react if a person had alcohol on their breath in a meeting? Would you perceive them as a serious business person? Could it convey they were nervous or stressed? Valuable information about the other people in a meeting is always available if you look, listen, touch, and smell. The more knowledge a person has the better prepared they are for negotiating a positive outcome.
Sensory awareness in practice, a party is now prepared to engage in a meeting. How should a professional negotiation meeting be facilitated? It should have three attributes.
- The parties should be patient. Each person should be provided an opportunity to convey their positions completely.
- An environment of congeniality should be created. Listen. Ask follow up questions for comprehension and clarification. The best negotiations are conducted from a foundation of knowledge where each party attempts to understand the other side’s perspective.
- You have two ears and one mouth. Listen twice as much as you talk. Remain engaged in observation of as many senses as possible throughout the meeting. Parties convey the issues that are dealbreakers and non-issues by the veracity of their engagement and their body language.
The best business brokers possess superior knowledge, experience, and skill. They also employ best practices. In the selection of a business broker, preference should be given to a person who is willing to meet in person and listen. Attention to detail can be the difference between a successful and failed transaction. It is a mystery to me how a party involved in the sale of a privately held company or family business, one of the most significant transactions of their lives, will choose to select a business broker who has not physically visited the business, they have met in person, or is available to facilitate buyer/seller meetings in person. In my opinion, they are supporting the laziness, efficiency, and financial thriftiness of the intermediary rather than their own best interest. Business owners should demand an intermediary meet with them in person before signing a representation agreement. If the business broker is not willing to make that commitment to a client at the beginning, their level of engagement will only diminish from there. Similarly, IBA always recommends that sellers meet potential buyers in person and the party tour the business before taking a business off the market under an exclusivity clause in a letter of intent. There is no benefit for a seller to pull a business from the market and have the deal potentially fail in the future because they do not wish the other party to be their successor in ownership after meeting them in person or the buyer not approving of the operation or community it is located in after an on the ground assessment.
Attention to detail and employment of best practices are fundamental to success in the sale of a business. Best practices in business sale negotiations start with looking the other party in the eye, shaking their hand, and listening to their perspective.
IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, real estate, legal, and accounting communities on subjects relevant to the purchase & sale of privately held companies and family-owned businesses. IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.