In business transactions, 'walking a mile' can take you much further

I don’t know about you, but one of the sayings I often heard growing up was “walk a mile in the other person’s shoes.” Putting that saying into practice is hard but the payback can be enormous.

Think about it in a practical and pragmatic way. Perhaps an employee is asking for a concession or assistance in some way, or you’re debating an issue with someone. It’s not uncommon for us to assume one thing about the other person or situation only to later discover that their motivation is something very different.

In the world of buying, building, or selling a business, this is never more true or pronounced than during a due-diligence process. During this process, the buyer is kicking the tires hard before committing to a transaction, whether buying the company or entering into a major, significant contract. If you’re the buyer, you’re optimistic that what the seller says is true is, in fact, true. Still, you need to prove it to yourself.

Conversely, the seller knows what they are selling intimately. They know, with confidence, that there is value and goodness in the transaction that the buyer should be willing to pay for. This degree of confidence can be so solid that it borders on a “trust me” bravado in some cases. When the buyer presses for more information or the data in a different or repetitive way, it can get extraordinarily frustrating for the seller.

I recently assisted a client — the seller — through this process. On its face, the deal was a big one in terms of the transaction size. The seller had great upside and a track record that supported it. Their systems, products, approach to market, and so on were very strong. There were many reasons for the seller to be confident that they could and would deliver true and lasting value to the buyer, and the key members of the seller team had grown the business from its infancy into what it is today.

The buyer, on the other hand, was a much larger strategic player with a lot of experience purchasing and integrating companies into its business model. Unlike the seller, they had done many merger and acquisition transactions. Their process was thorough, detailed, and intrusive, which given the fact that the parent is publicly traded, made sense, at least from my perspective.

My client, however, was not so understanding. Pushback came in the form of, “They don’t need that,” more times than I could count. Ditto for, “Why do they want that? It doesn’t change anything,” “This is freakin’ stupid. We don’t look at it that way,” and many other less mom-friendly statements.

Due diligence as a process layers more work on to what is likely an already busy team. When the demands don’t make sense while the pressure to deliver is significant, it’s a recipe for stress, anxiety, and grumpiness.

This is where “walking a mile” is the most valuable. It’s a safe bet that the other side isn’t asking for information because they woke up that day with the sole intent of making life hell. There’s a reason for needing it. For example, in this instance:

  • The buyer was publicly traded. They had investors’ interests to serve — investors with lawyers;
  • The due diligence team had been hired by this buyer. The stakes were high for them in terms of fees and risk, and their client had lawyers, too;
  • The buyer and their team were looking at the deal from all angles. What did the data tell them about historical performance? Did the data support what had been shared in numerous conversations that had taken place? What could they glean from the data to help model future opportunities? After all, they were buying because they wanted to make the most of the future; and
  • Data requests can have multiple purposes. For example, details about sales allowed the financial due diligence team to think about whether revenue was being reported correctly. However, the team responsible for modeling the future was going to want more information about how the sale came about. Was it a brand-new customer or a cross- or up-sell? How did the pattern vary between salespeople? 

Put yourself in their shoes. Wouldn’t you want to know more, too?



Another point of annoyance in deals can be data requests that are made multiple times. Very often what seems to be the same request may be made several times, sometimes even with the exact same wording. This may seem akin to your kid asking you the same question over and over and over again. However, think back to when you might have asked your child about the football game they said they went to last night. Mom may ask because she’s simply making conversation or wants to work on her relationship with the teen. On the other hand, Dad’s asking because he doesn’t believe the kid went to the game at all.

Additionally, in the heat of a deal, there are many “parents” involved in the conversation — accountants, lawyers, consultants, the buyer’s deal team, the buyer’s integration team, and so on. While these teams may share access to the same data room, they may not know all the details of what’s been asked for before, what was or wasn’t provided, and whether what was provided is sufficient for their unique purpose. It’s more efficient for them and their client to ask directly. That doesn’t necessarily make it any less annoying for the seller, but by putting the shoe on the other foot, it makes more sense.

In this deal, there was a requested analysis that the seller was fighting tooth and nail because they didn’t want to take on the work that would be entailed to satisfy the request, which was substantial. They fought it so hard that one of the client-owners instant messaged “Don’t make this harder than it is” to me during a call. The reality of the situation was that the sellers’ resistance was creating deeper issues of trust, wasting time, increasing tension between parties, and jeopardizing the entire deal because the data request was mission critical to the buyer. My client was so stuck in his own shoes, he didn’t realize that the other shoes were willing to walk away if the information was not made available.

Patience is a virtue. It’s tested daily in the best of circumstances. The stress of making a significant decision about a purchase, transaction, or change in life takes a toll on patience. It’s not always natural in these moments to step back and pause. Walking in the other person’s shoes takes tremendous discipline, but mom was right — it pays off in the long run.

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