Business Lessons from "Max Pressure" Approaches
Jack Connors
Tech GTM leader | Acquired by Google | Board member | CEO advisor | Bridge builder
[LinkedIn is great in part because it's apolitical. My post isn't intended to invite a political dialog, but rather a business one. Thanks in advance!]
I don't often post on LinkedIn, but to me, this article has many lessons for business. Granted, companies can’t impose global economic sanctions, but if you put the punishment aspects aside, the current situation highlights two very distinct approaches to structuring complex business deals. Consider this scenario of two companies:
- Each has something to gain in a partnership
- At least one party feels threatened by the other
- No open channels for dialog
At the highest level, there are two basic deal approaches:
The "Incremental" approach presumes that long-term success is built over time. It starts with understanding the other party's priorities and finding ways to create mutual value in the short term. Short term success builds trust and creates opportunities for larger, more strategic projects. In this approach, initial deals are seldom perfect, and the benefits to both parties accrue over time.
The “Big Bang” approach is based on knowing what deal you want in the end and waiting for it, applying whatever pressure you can along the way. There is no interim deal, and while the big deal may not happen, if it does happen it will likely be closer to the deal you wanted from the beginning.
The Incremental approach helps you establish trust and creates low-risk ways to prove that you can create value together. But it falls short when interim deals create more value for one party than the other. Big Bang deals are great, but when trust is an issue, a large deal ask can create more perceived risk and kill deals before they start. In both approaches, success is only revealed over the long term; in the interim, success is debatable (and often is!).
Some questions for you:
- When do you use each approach?
- What's your bias?
- Which approach creates the most long term value?
- How important is "long term thinking" in today's quarterly results-oriented world?
I look forward to your comments.
Jack
Passionate about helping people and orgs make great decisions through innovative processes and communication; allowing them to grow, align and achieve personal and business success! Sales, Customer Success & Ops Exec.
5yJack, a great post that makes you think. Not to over simplify but if you can go Big Bang (as quickly as possible then you typically go for it). However, like any decision you have to assess the likelihood of being successful in the Big Bang versus it not happening at all. For example, if the Big Bang will create $1m in value but you feel there is only a 15% chance of it happening then you have to assess the beachhead/incremental approach (maybe initial value of $100K but a 75% chance of achieving). This may say stay the course on the Big Bang but you need to assess the follow-on deals for the incremental approach and the likelihood of those happening. While we don't have a crystal ball or perfect information, my experience is that incremental is more prudent and in the long run will produce more value. However, experience shows that many things happen over the long term....like executive and marketplace changes. Good partnerships require relationship and trust to adapt over time. So get in and do the 1st deal and prove the value and then create more over time. Just my opinion but thanks for stimulating the conversation.