I'm the boss here!

How to stay focused on the business and control vanity

I’m the boss here!
12 de November de 2016 imeri

Why is a deal  not completed if the transaction price and rationale make sense to both the buyer and the seller? Why does a Brazilian company that has founding partners with great experience, and a renowned international private equity fund and another big business owner as stakeholders, have problems to the point of having to sell the company so they do not lose everything they have invested? Why does the shareholder of a company resulting from the merger of two large competitors decide to leave the business, if there is still a broad market to be reached? We cannot say that “we have seen everything”, but we have experienced many situations that allow us to affirm that there are decisive factors in business, which transcend the logic of PowerPoint slides and Excel spreadsheets.

One of the great causes lies in people’s vanity, and vanity is sharpened in situations with an “audience”, sometimes making one leave rationality  aside. This is why negotiation meetings with many participants usually do not work: one wants to show that he knows more than the other, wants to exalt his qualities and merits before third parties,  to show that he is better, that he is “smarter”, and even his manner of speaking can hinder the negotiations.

One day, after presenting our experience and the deals that we had concluded, a potential client asked us if we understood “people”. We understood the question well since we would negotiate the merger of his company with another that had three families as shareholders. In response, we presented some examples of situations that we have experienced, including those mentioned at the beginning of this article:

  • In one case, a company’s sale was not completed because at the end of the process the buyer began trying to teach the seller the right way to do business. Well, if he is buying the company, is it not because the seller did a good job?
  • In another, a company that had shareholders with great market experience had problems because, in the Board meetings, the fund’s representative wanted his opinion to prevail since he considered himself the “money owner”. The famous “I’m the boss here”. In the end, because of this position, the fund suffered considerable losses.
  • Finally, in a different scenario, a shareholder left the company after a merger because he realized that his partners’ second generation did not have the same personal and professional competence as the first, and particularly, they lacked the humility to recognize this and listen to the remaining partner. This combination would go on to be the recipe for the failure of the business.

As important as doing business is, knowing how to lead yourself, how to interact well with others, and how to leave vanity behind are variables that are not taught in books or in college. To know a vain person’s psychology is to not let this personal deficiency hinder a good business. This is one of the key attributes a leader and good negotiator should have.