A Fine Romance*

“Then we’re agreed,” said Larry, “equal shares in the business, at the valuation set by Serena’s offer.”

“Well, as you know, I am still thinking that the offer is a bit low, but it looks like I’m Robinson Crusoe on that,” said Earl.

“Do you mean that you are a tower of strength and resourcefulness so long in the wild, or you’re the odd one out?” mused Serena.

“Now that you mention it, all of those things Serena, but particularly that I’m the only one suggesting a 25% uplift.”

“I thought that we had dealt with that…” said Serena.

“Well Larry and I had worked out what price we wanted—so, what your contribution would be—but there was a bit of a gap.”

“Hey, come on Earl,” said Larry, our independent valuation suggested a multiplier of 3 on our  averaged net profit and Serena has offered us a 4.  I think that’s more than reasonable.”

“But my point is we have a lot more potential than that would suggest,” said Earl.  “We’ve worked hard on this business and it’s now coming into full flower.”

“Earl, we’ve been through all that…”

“It’s OK Larry,” cut in Serena, “I’m happy to put my point again: the potential is there for us to achieve and I think that my offer strikes a fair balance between past achievement and future growth.” 

Then, after a long pause: “Are we good with this?”

Earl felt that there was something about Serena that made her different to deal with than Larry, his long-term partner in the business.  Nothing to worry about, just different.

“Alright, OK, you win, I can see that I’m outvoted here.”

“That’s one way of looking at it, Earl, but I think in a trusting relationship we should be prepared to go with the flow to some extent.  In this case, conceding a little on the buy-in price is sure to be rewarded further down the track.  It’s maybe our first test of delayed gratification; there are bound to be more as we grow together.

“And you know,” said Serena, becoming philosophical, “this dynamic is just like a personal relationship.”

“Not that’s what we’re in, of course,” said Larry, “this is strictly business.”

“Yes, absolutely, that’s right, but the dynamics are similar,” said Serena.

“How so?” said Earl, at the same time mystified and surprised.

“Well, I have come to understand that there are 3 stages of deep partnerships.

“The first is the romantic stage where we decide to commit to each other and we see everything through rose-coloured glasses.  I guess that will be much like what we are entering now.

“Then, not too far down the track we come to what’s called a power struggle, where some of  the gloss is gone and we get on each others’ nerves—what we found attractive at first, may annoy us later.  We have to sort out the inevitable issues…”

“Sounds familiar to you Larry?” said Earl, looking over his spectacles.

“Sounds more like we’re headed for doom and gloom,” muttered Earl.

“Not at all,” said Serena, “that is, if we find a way to raise the issues with each other—early—then agree on a process for dealing with them.  So, we can build this history of successful partnership—that’s called true love in an intimate relationship, but you can see how it applies in business terms.

“OK, yes,” said Larry, “that’s not the type of conversation Earl and I have had in the past, but I see what you mean.”

“Makes sense to me,” said Earl, with more hope than conviction. 

“That reminds me,” said Larry, “we need to revisit our shareholders’ agreement, to work all this through.”

“Yes, and in having said that we need to work on an exit strategy as an immediate priority,” said Serena.

“Hey, there’s no way that we don’t want this deal to go ahead,” said Larry, “but can’t that wait till much later?  We’re just getting started, after all.”

“As fine as this romance promises to be, nothing lasts forever, and we must start out as we mean to finish,”  said Serena, warming to the task.

As Larry and Earl’s eyes widened.

 Next week:   In the Minority

 About the Author

Jeff Bell is Principal of executive consultancy ResultsWise in Perth, WA. To boost your leadership, ask Jeff about Band of Leaders Australia (BOLA) jeff@bandofleadersaustralia.com.au and his consulting, coaching and strategy facilitation, or his Advanced Leadership Course jeff@resultswise.com.au Mobile 0439 988 662.

 About the Cartoonist

Eric Löbbecke has won 2 Walkley and multiple Stanley awards for illustration and cartooning and 2 Bald Archies for satirical portraiture. His cartoons have featured in The Australian and other newspapers, in children's books and in exhibitions at the Mitchell Library and the Australian Museum.

*This is Jeff and Eric’s 24th collaboration featuring Earl, Larry and Serena, since August 2021.