Deal fatigue is a real issue — and something you will immediately understand if your job includes negotiations on a single contract that last months or even years. When I say deal fatigue, I mean the situation where people get so tired of a project that they start compromising on issues just to reach the conclusion or to sign an agreement. While we are often able to work as a team to prevent this type of decision making, the real danger of deal fatigue is that the end result of a deal is very different and not as beneficial as what each party hoped for or thought the deal would be at the beginning of the deal.
While “slow playing” a deal is sometimes used as a negotiation tactic, often times, deal fatigue occurs simply due to the complex nature of a negotiation. I’ve seen deal fatigue set in on international deals where time zones make discussions difficult, where multiple internal stakeholders have to weigh in on every change or decision in the deal and the opinions are divergent and where internal changes at a large company resulted in changing internal teams on a single contract.
While some element of deal fatigue might occur on any difficult transaction, there are some simple processes that we’ve seen successfully used that, in my opinion, result in a better outcome for all parties. First, we recommend using a dedicated project manager to coordinate schedules and timing of meetings. A project manager would maintain action items and task lists and routinely follow up on those items keeps folks focused and making progress. Second, setting up standing daily, weekly or monthly status calls (depending on what is appropriate for the deal) often results in better engagement from project team members, especially for busy individuals whose calendars fill up fast. By setting an expectation of a periodic status call, you create a situation where people know in advance when they need to accomplish their tasks. Third, we recommend placing a single person on the deal team to be in charge of maintaining consistency with the initial business plan. Many times, projects are initially approved by management with a business case that says one thing and the end case does not match what was initially approved. Since there was initial management buy-in on the deal and excitement about what will occur if the deal is successful, there is incentive to close a deal even if it looks very different than the original business case. In our deals, we are increasingly using a dashboard methodology that tracks the positioning of certain deal terms — and tracks the changes with respect to positions on those terms throughout the life of the deal.
These are just some suggestions that we’ve seen work to combat deal fatigue in a large, complex transaction negotiation. Do you have other suggestions? Do you have similar situations to share? Feel free to post a comment or send me an email to discuss… firstname.lastname@example.org.