Deals come in a variety of forms -- from a simple direct sales transaction, to an incredibly complex multi-country joint venture. One rule I've seen unerringly repeated during my years in business is Time Kills Deals.
To illustrate the point, I'll offer two examples -- at the extremes.
In the simple sales transaction, I have a bid to a customer currently to do some assembly work for him. He received the bid last week, provided some immediate feedback, which caused me to slightly change the proposal. Now I'm waiting. As I wait, I keep thinking of things I should have done differently -- Should I have included the lubricating oil in the bill of materials? Was I overly optimistic about the time needed to do the job? As time stretches on, I am slowly getting less enthusiastic about winning the business. If he comes back with a counter, I'm already less inclined to be flexible now.
On my customer's side, he's checking his other options, evaluating other new suppliers, even possibly reconsidering his current supplier. The more time that goes by, the more likely he is to find an attractive alternative, or just push the project down his priority list and never return to it.
Time is the enemy of the deal. Will it happen? Last week I was 90% sure it would. Now I'm at 75% and the number is dropping with each passing day.
I've been involved in numerous acquisition negotiations, and here the impact of time is considerably more insidious. In addition to second thoughts about the transaction, with large complex deals, time tends to raise suspicions about the "other side." And once doubts enter the picture, people look closely for any evidence that support their suspicions.
During one such negotiation, I proposed salaries for two new joint venture partners -- ones that were to take effect after the deal was done. They probably suspected I was trying to pay them too little (although it was considerably more than they were paying themselves). When they balked, I became concerned the partners were only in the deal for what they could get out of it in the short term. As time went on, the deal drifted further and further apart, with more suspicions being heaped up on both sides. Eventually, the deal died.
The same thing happens in my novel DELIVERABLES, although in that case, there's someone tossing wrenches into the works to speed along the development of suspicions and distrust.
That conventional wisdom -- get that sale closed, now -- certainly holds doubly true for larger and more complex deals. If you want to complete them, you need a sense of urgency.
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