Dealmaking is part of of all we do in life

NEWS

Kim Meredith
Lessons In Dealmaking From Children

By Kim Meredith, Managing Director of Spectrum Solutions

Just for fun, Google a definition of "deal" or "dealmaker" (or look in a dictionary) before you read this article. Did you find anything useful? I doubt it. www.thefreedictionary.com defines "dealmaker" as "one that makes deals, as in business, finance or politics". The definition of "deal" is "1) to give out as a share or portion, apportion; 2) to distribute among several recipients; 3) sell; etc. etc." If you had to ask the best dealmaker you know if this is what dealmaking is all about, they would laugh at you.

Do you think maybe Donald Trump and Richard Branson would agree with the definitions above? Fat chance. I spent a day recently researching the qualities that characterise the world's leading dealmakers. I used my findings to re-define "dealmaker" as follows:

Dealmaker: a person skilled in using instinct, processes and expertise in primarily negotiation, selling and communication, and able to leverage or adjust the balance of power to bring closure to transactions that usually benefit all parties (© The Dealmaker Programmes)

It may surprise you to see the word "instinct" in my definition. I got the idea from Donald Trump, who had this to say about doing deals:

"Deal making is not about being brilliant -
it does take certain intelligence -
but mostly it's about instinct"
Donald Trump (Business Entrepreneur 1946 - )

The word instinct validated an opinion I have held for many years - an opinion formed watching and working with some of South Africa's best dealmakers. These people relied as much on their intuition as on their ability to sell or negotiate. They had one further thing in common - communication skills. But let's start with instinct. It comes back to another opinion I have - we are all born with great dealmaking skills. Without exception. Here are two reasons why I believe you were born with these skills. The answer lies with children.

1. Children are natural dealmakers
Cast your mind back to when you were a child and wanted a treat - maybe being taken to the park or eating sweets before dinner or having your dog sleep in your bed. How did you get what you wanted? Did you beg as in "Ag please daddy won't you take us to the drive-in?" This is known as persuasion, or selling, in adult-speak.

Children peak as dealmakers between the ages of four and eight. If you have kids in this age group you will know exactly what I mean. Try getting a six year old to go to bed if this is not what he wants. He can think up many more reasons or ask for many more treats in exchange for going to bed than you can come up with, so you resort to "go to bed because I said so". Is this the best you can do? Unfortunately, in most cases, it is! How can a child outsmart you? Firstly, children are infinitely creative. Secondly, they are infinitely flexible. Thirdly, they do not apply associative logic to a deal. Funny thing this, but I saw these same qualities in my research into the world's leading dealmaker and the dealmakers with whom I have worked.

2. Children understand the nature of incentives
I recently read Freakonomics by Steven D. Levitt & Stephen J. Dubner. If you have not yet read it, do yourself a favour and buy a copy now. I hate business books - I find them terminally boring - but it was the title of this one that grabbed my attention. In the book this statement is made: "Incentives are the cornerstone of modern life". The authors go on to say "The typical economist believes the world has not yet invented a problem that he cannot fix if given a free hand to design the proper incentive scheme". The authors, one of which is a Harvard graduate with an award for being best American Economist under 40, even talk about how well children understand incentives. Children hold adults in the palms of their grubby little hands. In my example above Johnny understands that Mom wants something - for him to go to bed - and he instinctively uses this opportunity to try and get something for himself - a little incentive. Maybe this is the origin of the term "give to get"! Johnny also knows Mom has more power than him, but he still takes the gap. Why? Because this is how dealmakers operate. More about power in the next article, but what advantage do children have? They have unlimited creativity and flexibility, and no dependence on logic. The understanding of incentives is something with which we were all born.

"An incentive is a bullet, a lever, a key:
an often tiny object with astonishing power
to change a situation"
Stephen D. Levitt & Stephen J. Dubner
(authors of "Freakonomics", 2005)

So if children are born with dealmaking abilities, why do they lose them? Well, have you noticed that children start to lose their dealmaking instincts during primary school? In order for children to adapt to the rigours of school life and because of their initial natural willingness to listen to their teachers, they start to conform to "the system". And when they unwittingly buy into "the system", they let go of their inherent trading skills - getting something for giving the other person what they want - and by the time they meet the next real "system", commonly called "business", their dealmaking abilities are long gone. But a few children don't lose their skills, they keep developing them, and they later emerge as outstanding dealmakers. Here's how it works: imagine you were born with a talent for tennis. You were really good when you were a kid because you played tennis every day until you were eight. Then, for some reason, you didn't play tennis for ten years - how good would you be compared to the kids that continued play tennis? We know that all the great tennis players, golfers, etc. were coached continuously throughout their childhoods.

Kim Meredith
Johannesburg
June 2008

Kim Meredith is an internationally acclaimed lecturer, negotiator and dealmaker. Kim is Managing Director of Spectrum Solutions and The Dealmaker Programmes Company. Kim has been working with and consulting to international companies in negotiation strategy and dealmaking for nearly 15 years. Kim currently lectures and consults in the USA, Europe, Latin America and Africa.