Make an Agreement; Don’t “Cut a Deal”

• May 15, 2019

What’s the Deal with Making Deals?

A new four-letter word has become quite pervasive in our vocabulary. It’s all over our social media headlines and feeds. We hear it daily on the morning news. The word in question? “Deal!”

“Deal” has historically been used to describe real estate transactions. Typically, each party is polarized and one must give in to reach a deal. One side negotiates more than the other, the other side caves in, and one side “wins”. There’s quite a lot of pretense on the front end that translates to retaliation on the back end.

Every deal has a winner and a loser. In the car industry, you try to negotiate a deal on a new car. In gambling, it’s the dealer’s choice, the dealer themselves, and the double-dealer you have to be on the lookout for.

Is this starting to sound contentious and competitive? Well, it is. The implication of a “deal” is far away from cooperation, reciprocity, and empathy. Those make up the recipe to a well-thought solution to the differing needs of stakeholders. This is why we prefer to say “agreement” instead.

A Better Term for All Sides

Even the word “agreement” sounds more positive. It implies that both sides won. Each side worked toward the same agreement—working together and making intelligent concessions to make the whole greater than the sum of its parts.

You “reach” an agreement. You “cut” a deal. Making deals has become aggressive, and has lately been reduced to a form of coercion, hostage-taking, or extortion. When you make an agreement, on the other hand, it symbolizes a beneficial, respectful, and constructive arrangement.

By referencing the desired outcome as an agreement, you avoid the egotistical pretense and angst that are implied in a contest-like “deal”. You set the stage for the friendly conversation during which stakeholders can collaborate effectively. And moving forward, you form a bond with the other party without grudges or regrets.

What’s in a word?

Absolutely everything! When you negotiate a business solution, anyway. Before, during, and after the whole thing, why shouldn’t you use a word that shows your respect for the other side and reinforces your belief that you’ll work together to achieve a beneficial relationship? It can open the door for future collaboration.

When it comes to Barefoot Wine, we always used “agreement” to earn national distribution and extended credit, and to connect with the right people at the right times. In our agreements, there were always at least two “winners”. It’s crucial to view the other party as a partner, not as an adversary. In real estate, the parties are finished when the transaction is finished. But in many businesses, agreements can symbolize the beginning of strategic partnerships that provide benefits well into the future.

No More Cutting Deals; Reach an Agreement

Let’s stop using the word “deal”—with all of its competitive and aggressive undertones. Let’s touch back into the reality that any kind of secure agreement is bound to lead to longtime partnerships. And let’s stop watching deal-making as a sport—being entertained by two enemies battling it out until there’s a winner and a loser.

If there is a loser, after all, both sides will lose eventually. The other side just can’t wait to get out of their “deal”. We’ve learned that, without trust, there’s no legally binding contract that can hold them to a certain level of performance. Yes, you can file a lawsuit and make both sides’ attorneys rich, but is that how you want to use your precious time and money?

According to the Japanese, it’s rude to talk about anything except the weather for the first few minutes of a business conversation. They use this “pointless” banter to establish a sense of agreement by understanding what they have in common with the other party. They know that being on common ground with the other side sets the tone for a respectful, productive discussion, paving the way for mutual, long-term benefits.

Don’t cut deals anymore—Start making agreements! Both sides can be winners!

For more, read on: http://c-suitenetworkadvisors.com/advisor/michael-houlihan-and-bonnie-harvey/