M&A Negotiation Key to Success: Negotiate with the Decision-Maker
The biggest, most important, and most basic M&A negotiating rule is to make sure you negotiate with the actual decision-maker and not an influencer. Of course, speaking with an influencer isn’t automatically bad. In many cases, the negotiations advance relatively smoothly.
But in some cases, an influencer who inserts himself into the proceedings may or may not have the authority to negotiate the transaction. These kinds of influencers tend to impede deals; in the best cases, they’re overzealous underlings trying to make a splash with their bosses. In the worst cases, they’re manipulative head cases following a personal agenda with little or no regard for the company’s goals.
In other situations, the actual decision-maker may be hiding behind the influencer. In this example, the influencer is little more than the mouthpiece for the real decision-maker. Typical rants from this person include abrupt and curt ultimatums such as, “We don’t think we will negotiate or find middle ground,” or, “We’re not going to contemplate your proposal.”
What’s going on here is that the decision-maker is using the influencer as a buffer. The decision-maker can easily bark unfiltered orders at the influencer, orders the decision-maker probably wouldn’t make if she were speaking directly with you. In turn, the influencer simply parrots the decision-maker by delivering the same message without editing it or moderating its tone.
This unfiltered communication, often the hallmark of passive-aggressive types or just someone who can’t be bothered to deal with the situation at hand, is highly frustrating.
The best way, and perhaps the only way, to handle this situation is to try to set up a meeting or a conference call with the influencer and the decision-maker. You need to get the influencer out of the way and communicate directly with the decision-maker.
If you’re speaking with an influencer and the negotiations are rocky, challenge the person. Simply ask if he is the final decision-maker. If not, ask to speak to that decision-maker. If you still get a block, suggest a meeting with the other side’s full team.