Business Development work requires a certain suspension of disbelief to function smoothly. In the initial stages of any conversation both parties have to be open to undiscovered possibility. Often the most profitable opportunities only become clear after a false start or two.
I’m naturally optimistic and I allow myself to be seduced to new possibilities in initial meetings with potential partners. The positive side of this is that I’ve been involved in some creative and profitable deals that wouldn’t have come off without a period of listening and exploration. The negative side is that it is very easy to send misleading signals to the other side who interpret your enthusiasm to engage as a leading indicator of a pending deal.
The Gullibility Paradox
This outlook creates a paradox because Business Development can’t be allowed pull a business into time consuming distractions and strategic cul de sacs. You must be disciplined about the conversations you enter and how long you allow them to proceed before you bail out or engage. But unless you talk to people who are outside of the orbit of conventional wisdom you won’t add much value in the long run.
It is common sense to be skeptical about any potential deal and to stay focused on your knitting. For the bulk of the managers in a business this is an imperative. But for those involved in Business Development your role is to explore the possibilities of an unknown future, and the skeptical approach in this specific context does not serve the needs of the business.
Roads Not Taken
I’ve seen the downside of not taking an optimistic approach.
In the mid-90’s a major computer company approached the software company I worked for with an exploratory meeting. At the time we had a very close partnership with their chief rival. We were surprised when what was supposed to be a casual meeting of 2-3 people turned into a group of 10 on their side. My Business Development Manager went into the meeting with a mindset that discussion was pointless because of our other alliance and it came through in his words and body language. We didn’t react to the signals that were coming our way and the conversation didn’t go well.
Two months later they bought a rival for an absolutely ridiculous multiple on earnings.
I’m not sure if they would have bought us in the end – but we never got the chance to even have the conversation because we came into the meeting with our minds closed to the possibility.
The Solution – A Moving Scale
I wrote about the Eeyore side in an article on Parnterships In Education – as you iron out details you need to assume that what can go wrong will go wrong (because, well, it will).
A Couple of Caveats
Does this mean you need to enter into conversations with people you don’t trust? No – trust is the bedrock of any successful deal. Opening yourself up to entreaties from sleaze-balls isn’t a business strategy, its a death wish.
Should you talk to anyone? No – there isn’t enough time in the day to talk to everyone who comes your way. But at least for initial meetings you need to dial down your resistance to unusual approaches and opportunities. If there is a peripheral connection it can’t hurt to listen for a few minutes. You might schedule a phone call instead of a dinner but you will learning something from every encounter if you are listening.
If you are involved in Business Development I encourage you to develop your openness to possibility from unusual sources. This is after all the essence of what you are trying to do – unearth opportunities that are profitable precisely because others have not discovered them yet.
If you can learn to manage your own outlook as you move through a deal you will surface the gems with optimism, and then negotiate a deal that can stand an encounter with the real world with skepticism.