At the end of the Netflix documentary, The Social Dilemma, one of the commentators argues that digital technology is neither one thing nor the other. That it’s simultaneously utopia and dystopia. This seems to sum up the world today. And it certainly seems to sum up building businesses today.
A few months ago I wrote a column about looking for opportunities to take your business into the future. Today let’s explore putting that into practice. Now, we’re not talking about increasing sales to existing customers, or selling to broader markets. Businesses should have already grasped this challenge and it should be business as usual by now. Likewise, if you have not explored the opportunities to grow your business with technology then you have possibly missed a fairly large boat. What I would like to focus on today is broadening your business through strategic collaborations, partnerships and mergers. The next level of business growth, if you like.
Traditionally, even if businesses were comfortable doing most of a deal of this nature online, the last step before committing was usually an in-person meeting. We wanted to “see the whites of their eyes” or do the airport test — would we be comfortable being stuck at an airport with the person — before signing on the dotted line. Now this is not always practical, or even possible.
But that doesn’t mean deal making should stop. And perhaps, working purely remotely, your deal making will improve. For one thing, decisions are now made rationally based on hard facts and analysis, with less influence from emotions and cognitive biases. With a tight agenda, remote conversations can focus on the practical business drivers for the deal, for instance, what does the partner system do, how robust is the technology, what is the fit between the services and is there a customer database overlap. This could lead to better outcomes for your organisation, and, with the removal of cognitive biases, you might end up considering options you would never have looked at in the past.
But these are all easily measured metrics: hard, tangible, fact driven, and flow to the bottom line. The less tangible, human factors — personality fit, business culture and EQ — are more difficult to evaluate in the remote world in which we find ourselves. So, to manage the risk associated with these aspects of the deal we need to, in the absence of a face-to-face encounter, identify new metrics and methods to evaluate the “fit”. Perhaps the focus here becomes one of risk aversion. Instead of focussing on or trying to evaluate just how well the businesses will gel, seek to identify if there are any obvious mismatches on the playing field.
Further, as mentioned, today it is seldom a case of something being one thing or the other. And personal connections and a rapport can be nurtured remotely: ask any successful telesales person. Most of us have access to business-class videoconferencing on our laptops, tablets and smartphones. And we’re comfortable using these services, whether it’s for work or to keep in touch with friends and family around the world. It’s easy to argue that, with accessible videoconferencing abilities at our fingertips, it’s more possible than ever before to build and maintain real relationships in our personal and business lives.
So, when you do finally meet your new business partner in real life, it certainly should not feel like a blind date. That instant rapport you enjoy when you finally meet is because you have carefully built that relationship online. I’d suggest that, done well, there are unlikely to be many more nasty surprises in remote deals than in face-to-face deals — and this is what due diligences and hiring probation periods are for, after all.
Today, not only is it possible to do the deal remotely, you can do better, data-driven deals. Additionally, you can do deals further afield, with people and companies you may never have previously considered. You can get to know and partner with the complementary organisation based on the other side of the world. Or you can hire the ideal candidate for the role even though they have no intention of leaving their sleepy fishing village on the other side of the country, or the world. This undoubtedly widens the scope for your business and improves your offering to your customers.
As mentioned at the outset, utopia and dystopia can exist simultaneously. And the exact reverse of the above scenario is always a possibility that things can, and do, go wrong. It is up to you to decide whether it is time for you to batten down the hatches and wait out the storm until, or maybe if, normality returns, or grab the charts, plot your course and set sail to ensure you don’t miss the tide today.
As published Accountingweb - November 2020