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  • Simon Haigh

Effective Deal-Making: Part 5

Communication is the key

In this latest article in a series on effective deal-making, I look at the importance of good communication and smart-framing for accomplished deal-making.

Good communication is critical

The ‘to and fro’ of a successful deal is hinged on both parties getting what they want. Good communication is critical for good deal-closing. Letting the other side know what you want and, at the same time, letting the other side be under the impression they can also get what they want in return, is essential. Listening to counter-proposals and being flexible during the entire process are also vital.

A good deal-closer employs carefully selected words and uses smart gestures. They also actively listen to the words used by the other side, while being very alert to their subtle signs, gestures and other clues. However, be aware that, even with language itself (let alone non-verbal communication), there are vast differences between cultures that give different meanings to certain words such as ‘reasonable’ or ‘progress’.

Types of communication

Oxford Dictionaries defines communication as: ‘The imparting or exchanging of information by speaking, writing, or using some other medium.’

From this definition you can see that there are two broad types of communication:

  • Verbal communication, which includes speech, writing, sign language and in some cases the use of symbols; and

  • Non-verbal communication, which includes methods by which two parties engage together other than through words and symbols, such as body language, posture, facial expressions, eye contact and other physical gestures.

Verbal communication

Verbal communication in turn operates on two levels:

  • Conscious verbal communication – this is where we are aware of the words and relevant symbols we are choosing and why we have done so; and

  • Unconscious verbal communication – this is where we use words without necessarily being fully conscious we have used them.

Conscious and unconscious verbal communication
Conscious verbal communication

This obviously is the more common type of the two forms of verbal communication. In business, and particularly in deal-making, the precise and measured use of words is vital. In order to achieve their desired results, accomplished deal-makers always consider what they need to say, want to say and, in all cases how and when is best to say it.

As already seen, you should ask questions, actively listen to the answers, regularly summarise and confirm common understandings. Doing this should minimise the chances of misinterpretations, misunderstandings or unhelpful emotions creeping in. Providing the other side with what they want from a deal usually enhances the likelihood that you will achieve what you want. So be communication-savvy.

That said, in my experience, what you say and what the other person hears is not always the same thing. So, in addition to choosing and using your words carefully you need to check, at regular intervals, that the other person actually understands exactly what you mean – here the use of summaries is valuable.

Unconscious verbal communication

As we have seen, unconscious verbal communication occurs when we use words without necessarily being conscious of what we are actually saying. Instead of trying to eradicate your own unconscious verbal clues, you are better placed to concentrate on picking up the other side’s clues to give yourself further upside opportunity in a deal.

You need to consciously increase your awareness and actively focus on what the other person is saying, and how and why they are doing so, in order to be able to home in on their communication clues. Actively looking out for, and listening to, these unconscious verbal clues (such as repeated use of the word ‘yes’ or saying ‘right’) will help you understand what is important to the other party and where they are likely to be flexible. In this way you can inch a little more value your way. Of course, it goes without saying, try not to let your own unconscious verbal clues demonstrate that you have picked up on the other side’s clues. Deal-making is a subtle, often surreptitious business.

Non-verbal communication

Although not usually as reliable as verbal communication, non-verbal communication cannot – and definitely should not – be ignored. As mentioned, non-verbal communication includes body language, posture, facial and body expressions, eye contact and other physical gestures. In other words, it is what we physically project and portray to the world.

Be careful, however, not to get too hung up on associating body language traits with particular intentions. It could well be that the movement in question is no more than an innocent habit that the other side has picked up over the years. Never take anything at face value in a deal without substantiating and verifying it. Relying on non-verbal communication to frame deal strategy progress should be taken with extreme caution. Body language is comparatively unreliable.

I need to flag another big word of caution. Body language variations are strongly tied to gender, generational and cultural differences. Yes, cultural differences can (and do) impact upon deal-making dynamics. For example, in many Asian cultures calm reactiveness prevails, while in German and Swiss cultures, order and linear process prevails, and then in Latin American or Hispanic cultures, discussions can get a little livelier. However, you should not get hung up on these stereotypes (unless of course, you are trained to use body language as a negotiation tool and then use it to convey a message). Awareness and knowledge are your safest forms of protection against differences which arise. As knowledge is power, a general awareness of cultural nuances, combined with strategy and constant assessment should increase your chances of a successful deal.

Making things even more complicated, a deal-maker can divert their intentions or demeanour by consciously modifying their body language to give off signals they would prefer you to receive – a decoy as it were. I am not saying that you should act your way through a deal, but I am suggesting you should become acutely aware of your body language so that you are better able to control or hide the give-away hints.

In addition to what is referred to as ‘body language’, we instinctively experience brief, involuntary micro expressions, usually facial. Even though hard to read and even harder to self-modify, this is another valuable form of non-verbal communication in the human interchange process.

Unlike advertent facial expressions, such instinctive and reflexive micro expressions are extremely difficult to fake as they are represented, for example, by tiny reactions. These include blushing, changes in pulse, muscle twitches and pupil dilation.

One thing to look out for is any sudden change in the other side’s body language or non-verbal communication. This may be a signal that you should, at the very least, pause and check out.

Be smart in framing your proposal
In making your proposal, be sure to carefully choose your words. Be as concise as possible and present your case in a logical, comprehensible and sequential way, for example by:
  • Introducing your proposal;

  • Breaking down clearly what you are saying by using facts and resisting the temptation to offer opinion. Do not be tempted to rush or skip primary issues. Be open to – and, in fact, encourage – interaction at this point;

  • Trying to get closure by testing how the other side feels about each element of your proposal and ensuring you open the other side up as much as possible in terms of their thinking and direction; and

  • Repeating all of the above until you are as confident as you can be that you can move on.

When presenting the first offer in a negotiation, you might assume that your counterpart will find the offer more persuasive if you back it up with a justification. Pause before persuading. When counterarguments are easily available to your counterpart, your persuasion efforts can backfire in a negotiation. On the other hand, negotiators may be more receptive to novel information you might provide, such as a newly lowered price or confidential data.

In making your proposal, you are effectively taking the other side on a deal journey with you. This is your chance to weave an image of the future that the other side will find it difficult to resist joining you in. When this is done well, it is replete with synchronicity, serenity and not a little colour.

Here deal-closers with acting ambitions can shine. A good deal requires momentum and you will struggle to get to a logical and satisfactory conclusion if you neglect this fact. It is up to you to patiently, but effectively, sweep the other side along with you in the steps required to reach a mutually satisfactory conclusion. If you experience blockages, awkward moments or even deadlock in the process, then perhaps you are not manoeuvring as adeptly as you could, or should, to ensure good momentum. Pay careful attention at all times to the progress, words used, ongoing dynamics and momentum of the deal.

To help the deal discussions move forward as freely as possible, we have found being open about key information share such as needs, potential trade-offs that might be acceptable, or carefully indicating that you have alternatives up your sleeve elsewhere (though be careful in particular with this last tactic) to be helpful. That said, you need to read the room as to the parameters of what is safe to open up with. You of course also need to overcome your own fears in being open and transparent.

The following tactics can assist you in making, and receiving, deal proposals:

  • Never show temper, defensiveness, irritability, confrontational style or impatience. Ask questions and adapt your proposal and the general direction of the deal based upon the responses;

  • Record all detail through note-taking and summarising throughout; and

  • Do not interrupt or allow yourself to be interrupted.

A clever tactic to employ is ‘If you [do x], then I will [do y]’. This demonstrates to the other side that you are prepared to help them, but they are going to have to work for that help. Offering a ‘give’ but asking for a ‘take’ in a deal can be a powerful tool in framing proposals.


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