If you’re tired of deal fatigue, and if worrying about its signs and root causes has you feeling sapped, the best thing to do is to return to fundamentals. In this third and final installment, we explore how you can employ the deal process to mitigate and even avoid the drudgery and fallout of deal fatigue.
The Deal Process
If you’re trying to speed along the deal process, the Emperor Augustus would advise you to festina lente, or make haste slowly. It’s important to remember that each stage of the deal process serves at least one important function. Knowing how to assess the need for each function, and the best way to accomplish it, is the key. So it’s acceptable to hasten, but only thoughtfully and deliberately—otherwise your deal will get ahead of the process, which could lead to some of the deal roadblocks we explored in our prior posts.
Take, for example, establishing a base case. A thorough assessment of the current environment is critical to understanding many things, including what you are trying to address by doing the deal, pressure points and organizational change issues, and financials. In other words, a good base case is required in order to competently recommend a path forward, and the interesting things you learn in developing the base case will inform down-selection and contract negotiations.
Of course, by forming a good base case, you may come to understand such operational parameters as service levels (or lack thereof), where process inefficiencies exist, how the business is staffed, and other important items. This knowledge can then be used by a good deal team to prenegotiate terms, including service levels, fees, and governance, and to structure the transition—where issues tend to have a multiplier effect (especially across geographies). Developing a good base case will also inform steady-state operations, and that, in turn, will inform the terms of both the transition and the transformation. One misstep can lead to a shaky, or even misleading, premise.
Even within deal phases, each building block plays an important role. Take, for instance, the assessment phase. A request for proposal (RFP), which is soundly fashioned out of baseline data and a solution evaluation, enables more than apples-to-apples comparisons—it empowers you to grow the apple tree. The RFP groundwork, which may involve a bit of grunt work, provides costing inputs to aid price modeling and helps the team unearth connections between the objectives and other components of the deal. Conversely, skirting the foundation risks not having the right people and inputs in place and constantly playing catch-up on overlooked issues, which can be particularly problematic if vendors are prematurely down-selected. If timely consulted, a deal lawyer can help you assess whether the vendor is a unique, ideal fit.
So let’s consider how we can speed up the process. If you blow through the base case, you will constantly be playing catch-up on the rest of the deal. Are there fast and slow ways of developing a base case? Yes. Can we tell you which is better in a vacuum? No. Does every deal require the same level of rigor at the base-case stage? No, but every deal requires the right level of rigor. And that is where cutting corners will slow the deal down. You can almost hear Augustus screaming festina lente.
A rushed deal process is a great example of how something that might feel good can do tremendous harm. At the beginning of a project, everybody wants to get started and get it finished as quickly as possible. But it requires experience, finesse, and emotional detachment to know whether moving through a process step would save time or cause substantial harm (in terms of time, money, and risk).
To avoid these missteps and keep the deal moving as quickly as possible, consider taking a core team approach to complex deals right from the very beginning. This means assembling a team that includes subject matter experts, members of management, people who can provide financial expertise and consulting guidance, as needed, and your deal lawyers. If you have the right people filling these roles, a team like this will be able to actively assess the speed/quality trade-offs and keep the deal on track. It may also surprise you how easy the process can be with the right team.
When there are experienced people working a deal as a team, they each bring with them the totality of their experience in different circumstances. Even though they have different focus areas of responsibility, each team member should be responsible for the whole deal and be prepared to participate as his or her expertise permits. For example, it’s not unusual for a good sourcing professional in this field to know something about contracts, or for a good deal lawyer to have valuable service level and pricing insights.
This team, through pointed discussions, can quickly and deeply grasp the underlying business drivers, transformational objectives, barriers to adoption, and behavioral economics. The entire relationship can be structured around key concerns and objectives. With this collaboration, the core team can help you navigate the labyrinth to verify that the framework and process are on target. Otherwise, you could get stuck in low-value negotiations, or even find yourself going back to the drawing board. This team, including your deal lawyer, will offer more than forms and redlines, and will understand that the contract documents are not the ultimate aim. Rather, the contract is a tool for you to reach your goal (and attain the intended returns).
A Life Cycle
To truly maximize results and minimize time, cost, and frustration, the deal process should be nonlinear and iterative—a life cycle, not a path. Each step in the process can further refine and guide other functions, not merely the succeeding step. For example, operational insight can forge improvements in the contracting structure, which can also spawn improved analysis, diligence, and implementation. A fine-tuned, evolving deal generates a relationship-based contract with a robust feedback loop. The outcome is not only a solution; it’s the desired transformation.
Breathing New Life
If your team is lamenting each passing moment, search for cracks in the deal’s underpinnings. Each life-cycle stage is connected and serves a valuable purpose. Jumping the gun or improperly structuring the deal might have caused discussions to frost over. Rely on your team’s mastery to uncover the roots and thaw the relationship.
Seamlessly developed, negotiated, and implemented, your outsourcing contract will be a living document that embodies a symbiotic relationship. So when you finally seal the deal, let it breathe. Resist the urge to relegate the closing binder to a desk drawer.