Dear Stan,
We have been negotiating with a strategic buyer of our company for about a year now. The year has been full of business challenges that could have derailed the sale, but we addressed them all and the buyer is still at the table with a good deal for us. Our team has been stressed and there have been occasions of emotional disagreement, which we have been careful to keep among ourselves. We recently met to discuss next steps with the buyer. While the interaction was very positive, he did ask how our senior management team and shareholders were handling our conflicts.
What concerns me most is that that he detected erosion of teamwork between the senior executives. I was with him more than anyone so I’m wondering how he got that impression. I know how important it is for investors to have a comfort level in the management team of a potential acquisition. I have repeatedly raised the issue that each of us must know our roles and responsibilities and how we interact for the benefit of the company. I can’t think of anything that would have raised his concern. How did the buyer get this impression? And what do we do about it?
Signed,
Revealed in San Diego
Dear Revealed,
Humans are incredibly perceptive in assessing interpersonal trust and trustworthiness. We can’t always articulate what we’re sensing, but it’s been my experience in studying the human species in the context of work that small signs are noted and add up over time to conclusions that are often accurate. These perceptions are tallied unconsciously. We don’t even know we’re doing it.
You’ve heard dog owners say that their pet is very astute at judging human character, showing defensive behaviors when a person comes up to them who is untrustworthy or threatening. The more likely explanation is that the pet is taking their cues from the pet owner. If you think about how human behaviors have developed over the eons, it is logical that we would get pretty good at sizing up another person in terms of their character, honesty, degree of immediate physical threat, etc. Since humans have to rely on collaboration and interdependence to survive, making those judgments about who to rely upon and who to steer clear of become critical skills. And our skills in doing so evolved long before we had language to talk about it.
It has been said by experts in the field of communications that 90% of the message conveyed between two people is non-verbal. This is research derived from Marshal McLuhan’s famous concept that “the medium is the message”. McLuhan said over thirty years ago that the conduit through which a message travels is more influential on the nature of the message received than the actual content. The “medium” is the form of the message, whether it is written, auditory, visual or some combination. Other senses are included as well when the communication is live. Now you add environment (temperature, location, lighting, physical elements, etc.), smells, tastes, movement, facial expressions, gestures, timing, intensity of the sensory elements (how “loud” or “soft” they are), context, and other factors.
McLuhan said that the fewer factors of medium present, the more the message recipient supplies out of their own imagination in order to “complete” the range of media required. This is why reading a book results in a much richer experience than seeing the movie. The imagination is a better creator of special effects than Industrial Light and Magic or Pixar. This also explains why written communications are so often misunderstood and misinterpreted. The recipient provides the “missing” information, and it doesn’t match the sender’s intentions. The corollary to this is that when people are interacting live, most of the communication factors are supplied by the milieu. The receiver provides much less of the media involved.
Your buyer is like other people who can assess human behavior unconsciously and effectively, without understanding the theory behind the effect. Nobody had to say anything to tip him off. And even without the buyer being an astute observer of human behavior, he would likely have reasoned his way to that conclusion. Just the facts alone would lend themselves to predicting some conflicts between the team members: long years of effort, several founders with different personalities, lots of unexpected challenges, newer executive talent arriving with strong talents and ambitions, a potential liquidity event where literally millions of bucks are at stake, likely fears of being part of a big company, differing opinions of how things ought to play out, etc., etc
So no one on your team did anything “wrong” in your interactions thus far. But your response to the buyer’s concern could make or break the deal. If you try to talk him out of his perception, it will be viewed as deceitful and manipulative, because his perception is indeed accurate. You should acknowledge that the challenges of the recent year have put stress on the team, and that conflicts of opinion and of goals have indeed arisen. Then describe to him how the team has addressed those conflicts openly and constructively. Point to the fact that even through the challenges you have accomplished significant progress.
No mature person expects people to get along all the time, especially when the objectives are ambitious and the people involved are passionate. If you can show that in the face of adversity the team remains a team, committed to mutual success as a top priority, your buyer will feel relieved that the truth has been acknowledged and the evidence supports your representation.