Selling your business is not just a transaction. It is a period of transition filled with unexpected highs and lows. After exiting her own legal practice and watching a close friend struggle with the sale of his company, global keynote speaker and bestselling author, Denise Logan realized that business owners need emotional support for this process of transition. Over the last 13 years, she has woven together her previous experience as a lawyer and mental health professional to help business owners and their advisors navigate the emotional aspects of letting go when it is time to sell their business; ultimately enhancing the likelihood of a successful conclusion while keeping costs and delays to a minimum. Denise joins us on Branch Out today to explain how she keeps people and deals from falling apart by giving emotions a seat at the table. We discuss the pitfalls of growing for the sake of growth, the term ‘product-market-maker fit,’ and Denise’s belief that it’s unprocessed emotion that kills deals, not time. We also touch on the importance of context, how advisors can close more deals by slowing down, and so much more. Don’t miss this thought-provoking conversation with The Seller Whisperer herself, Denise Logan!
Key Points From This Episode:
Denise Logan
Denise Logan on LinkedIn
Denise Logan on Twitter
The Seller’s Journey
Connection Builders
Alex Drost LinkedIn
Selling your business is not just a transaction. It is a period of transition filled with unexpected highs and lows. After exiting her own legal practice and watching a close friend struggle with the sale of his company, global keynote speaker and bestselling author, Denise Logan realized that business owners need emotional support for this process of transition. Over the last 13 years, she has woven together her previous experience as a lawyer and mental health professional to help business owners and their advisors navigate the emotional aspects of letting go when it is time to sell their business; ultimately enhancing the likelihood of a successful conclusion while keeping costs and delays to a minimum. Denise joins us on Branch Out today to explain how she keeps people and deals from falling apart by giving emotions a seat at the table. We discuss the pitfalls of growing for the sake of growth, the term ‘product-market-maker fit,’ and Denise’s belief that it’s unprocessed emotion that kills deals, not time. We also touch on the importance of context, how advisors can close more deals by slowing down, and so much more. Don’t miss this thought-provoking conversation with The Seller Whisperer herself, Denise Logan!
Key Points From This Episode:
Denise Logan
Denise Logan on LinkedIn
Denise Logan on Twitter
The Seller’s Journey
Connection Builders
Alex Drost LinkedIn
[INTRODUCTION]
[00:00:01] ANNOUNCER: Welcome to Branch Out, a Connection Builders podcast. Helping middle market professionals connect, grow, and excel in their careers. Through a series of conversations with leading professionals, we share stories and insights to take your career to the next level. A successful career begins with meaningful connections.
[INTERVIEW]
[0:00:20] AD: Denise, welcome to the Branch Out podcast.
[0:00:22] DL: I am so happy to be with you today, Alex.
[0:00:24] AD: I am looking forward to this conversation as well. Talking to the audience just for a moment here. Denise and I, we've had conversations over the last, about a year now, on and off. We just really kind of clicked with each other in some of the conversations and the ways of thinking. I found what Denise does is unique, but also her perspective, very unique. During our prep conversation for this, we came up with the idea that we're going to call the title today of this episode, Giving Emotions a Seat at the Table.
Denise, maybe just share a little bit about yourself, what you do, and how we got to this kind of idea of talking about why emotions deserve a seat at the table.
[0:01:03] DL: I'll give a little of my background, but I want to jump into why we came up with this title. In early life, I was a mental health professional, and then I was a lawyer. Some of your listeners are thinking, why didn't she use that good mental health skill to keep herself from becoming a lawyer for heaven's sake?
[0:01:23] AD: Well, they're different ends of the spectrum, right?
[0:01:25] DL: In some ways, I think so. I built a law practice. When we reached a pretty good size, I realized I was burnt out and it was time for me to leave. I exited my practice, got rid of my house, and bought a motor home, and I took off for what I thought would be six months and turned into several years of traveling. I came off the road and joined a friend's business who was preparing it for sale. Over the next 10 years, we tried to sell that business three times. Each time we got very close to the end and he would pull out.
I left and did a research study to try to figure out, why do business owners get stuck? Why are they like me, waiting too long until I was almost ready to give my business away? Or why did they go too early, like that fellow, and not be able to let go? For the last 13 years, I've worked one on one with business owners and their advisors to navigate the emotional aspect of letting go when it is time to sell their business. But I think this topic applies in so many areas because we are in, at least in my experience, we are always in a place of transition.
[0:02:44] AD: Let's talk more about that, this place of transition because I couldn't agree with you more. In particular. for someone like myself, being an entrepreneur. But also, many of our listeners that are professionals that are entrepreneurial by nature that kind of have a consistently changing dynamic in the workplace. I think that we all – many of us feel that there is some level of change and transition going on around us. Just share some more thoughts around that. What does that mean for us?
[0:03:10] DL: Transition itself. So let's relate this to – I'm going to use some examples that are just from our regular life, and then relate them to our business life. We don't wait until our children turn 18 to ask them, “What will you do with yourself?” We prepare them because we know there is a coming transition in their life. Yet, somehow as business owners, we are under this expectation that somehow our life will just know when transition time comes. But it is an ever-evolving process. We think about how we start our businesses.
Often, there is a lot of attention paid in our world to start up and launching. The launch is one piece, but after you've created something, it is always changing. I think if we're honest with ourselves, we are always changing in relationship to what we've created. If we're not, sometimes that's when we become stagnant, that's when we find ourselves burned out. I see it a lot with people right now, right? We've come through this period with COVID, and everyone was trying to do a lot.
I'll talk a little bit about my own experience with burnout while I was in my practice, and more recently. In my law practice, as we were growing, I felt like I needed to do everything perfectly. I don't know if anyone listening can relate to that experience.
[0:04:52] AD: Any perfectionists out there?
[0:04:55] DL: The perfection piece, but not just as a perfectionist but also still wanting all of the people who worked for me to do things the way I would do them. Which of course makes no sense because we each bring our own skill set. Over time, as the firm grew, I knew I was burning out. I knew it was time for me to begin either changing the way I did my work or changing the work that I was doing. But I found it difficult to give myself permission to even know that was happening for myself. Can you relate to that at all?
[0:05:33] AD: Very much so. You know this story and many of my listeners know the story. My previous career was, I worked in investment banking. I'll say there were a multitude of reasons that drove my decision to go and pursue an entrepreneurial career. But one of them was a level of burnout, and understanding what you described or the terminology, I think, the phrasing you use that I really liked was, our relationship to the work we do. And thinking is a very easy example, is what you described in some ways delegation, or working with others around you, finding ways to leverage and scale the work you do so that you can spend time on higher, better uses of your time often. But that has a lot to do with learning how to let go of some of the stuff that you pride yourself on, that you do a really good job, that's part of the work you do, that you're comfortable with, that you've spent a lot of time doing.
Learning how to recognize your relationship with that work, and how it relates to you is in letting go of the tight grip ownership and recognizing that your ownership is more about the overall quality, deliverability, plus the development and training of the other person. That's a big difference. In burnout, in my own experience is feeling out of control, right? It's a feeling for a prolonged period that you cannot control the dynamics around you. I'm burnt out doing this work, I'm overwhelmed, I see no end in sight, I don't have anyone I can pass this off to. But I think. if I'm hearing you right, a real place to start around that is shifting that relationship to the work, and seeing where that affects your beliefs around, and how that affects you in burnout mode.
[0:07:14] DL: I think it even – I don't know if you saw probably my eyes got a little wide when you use the word scale. Because I think there's certainly a conversation that happens in our industry that scaling should be the objective. I don't know if that is true. I think we have come to idolize scaling, and bigger and bigger. I know, for me, at the time that I was struggling with that, probably some of my happiest times were when I was in 600 square feet of office with a paralegal and a legal assistant. I felt like I had a lot more control over the life I was living. Yet, I was focused on growing and attracting more clients, which meant I needed more staff, which meant I needed more lawyers, which meant I needed more clients.
Eventually, I think what led, for me, to a lot of the burnout that I was experiencing was a sense that I always needed to be feeding the hungry machine. As the founder or creator of a firm, there is this need to make sure there is always work for the people. Because as more people joined my firm, I realized, "Oh, I'm responsible for them." It's one of the things I watch in our current environment, where I watch founders cut staff and say, "Oh, I take responsibility for that." Except, are they feeling responsibility? Do they feel responsibility for the people who invested their lives with that company and with that founder?
We could go down a whole rathole about what it means to choose to terminate people by email, and not have to actually deal with the emotional impact of the people who have joined your company or your firm are dependent upon the decisions that a founder makes. I think that was an important piece for me and I felt that responsibility to other people
[0:09:36] AD: Let's dive into that a little more. There are I think maybe two sides that I want to go on this. First, I want to talk on – you mentioned scale. I want to share my thoughts and kind of bounce a few ideas around on this. I am someone who very much focuses around systems in having a process that is scalable. You're right, scale is a word and growth is always in the back of my mind in some ways of driving that. Would it be – the other side of that I think is leverage maybe, right? Maybe leverage is a place like how can you create not necessarily growing just to grow, just to get as big, or just to create more, just to increase the top line. But how do you deliver in a more effective way that is more fulfilling, that gives you more time that is creating kind of those points in our life?
There are two different ways to do things, and if you can figure out the way to do it that takes less effort and gets better results, that leverage, right? Or there is an inherent value that can produce in your work, your life, and in so many different ways. But it's not an oftentimes that has to do with a scalable system. It's not just necessarily about pure scale. Do you have any thoughts or reactions to what I said there?
[0:10:54] DL: Oh, I have so many reactions. I think the question is better for who.
[0:11:02] AD: Growth for whose sake? Who are you building it for? What is the scale for?
[0:11:05] DL: How do we know that getting bigger or producing more makes it better? I think about – what about a craftsman, who is creating one-of-a-kind pieces? Is that more valued when they can churn out more? I don't know the answer. It is different for each of us to decide. But I think we have created a conversation in the world that is different from the one you and I are having. I think the conversation that goes on around us is that we should always want more, we should want bigger, we should want to have production. Yet, I think about – on Saturday night, I was coming home from an event, and I was like, "You know what, I need a little nibble of something."
I found myself in this family Italian restaurant down the block. What I ate there was different than if I had gone, let's say, to Olive Garden. So, my ability to go in and interact with the owner of that business, and the staff, and to feel known is a different experience. An acquaintance of mine coined a phrase that I like to think about when I'm thinking about my own business, which is product-market-maker fit.
We have the product, whatever that is, and the market, and we're often tinkering with product market fit, making the product fit the market, choosing the right market, but in so many instances, we lose the maker. We leave ourselves completely out of the circumstance. Don't we belong in that equation? For myself, I know because when I include myself in that process of product-market-maker, I know how to right-size my business and my processes and what is right for me.
[0:13:21] AD: What's really hitting home about what you're saying, and I think for our listeners, that work in professional services, whether you're an accountant, a lawyer, a banker, anyone up and down the professional service, knowledge worker ecosystem, you are the product, right? And you're trying to find the market ultimately. Oftentimes, you're the market-maker in some ways. But your point around scale for who, who is the scale for if the individual, the people-centric businesses put the people at the center of why they're scaling, where that scale is trying to create, who it's benefiting, versus what is typically, traditionally, you measure growth. How does any firm measure growth
There's usually one of two main metrics they use. Revenue or profitability, or revenue and average income. Some derivative of that is where it's always at. I fully believe that profitability is a much better one if you are going to measure one of the two. But it's going back to, you're not just trying to grow, just to grow, because there's the emotional desire to feel the need to always grow, right?
[0:14:27] DL: There's a cost for that. Gosh, I'm trying to decide which direction to take, like the branches of this conversation are so fun right now.
[0:14:36] AD: That's why we call it Branch Out podcast.
[0:14:38] DL: I love it. That's so great. Alex, I want to talk about a book that I have just finished reading that I think is fascinating. Then I want to come back to this point that we’re going to talk about, the cost of growing. Maybe I'll go there first and then go to the book that I was thinking about because I think it'll be easier for this conversation.
I'm going to use the example that had our podcast delayed as a good example. You and I have been talking about doing this recording for a while. Even so far as to put something on the calendar, and then I needed to change it, then I needed to change it. I finally got courageous enough to come to you and say, "I have taken on too much. Yes, I could do the podcast recording with you, but he would not bring the best version of me into our conversation, and I think you deserve that, and your listeners deserve that." So I asked you for the grace of pushing off our recording until I could clear all of the things that I had taken on. Thank you for being gracious about that. Because today's conversation is so much easier and more fulfilling for me, and hopefully, for those who are listening.
What I had done was I had made a lot of commitments. I speak professionally, so I typically speak at around 70 conferences a year. But last year, I needed to catch up on those that were booked in 2020 and 2021 that had been postponed. I didn't want to say to clients, "I'm sorry, my schedule is too full. I know you've waited two years, but I'm going to have to push you more time" or say no to new things that were coming in. Instead, I took all of that onto my plate, and it meant, I did around 103 appearances last year, which was exhausting. As much as I love it, and that sense of, we should always be growing, and scaling, and doing more. There is a cost for us as individuals when we choose to do that.
While I would like to think that the way I delivered at the end of the year was as full of desire, and passion, and energy as at the beginning of the year. I'm guessing that making that much more in my life probably didn't create a better experience for the people on the other side.
[0:17:35] AD: I 100% agree with you on that.
[BREAK]
[0:17:38] ANNOUNCER: This is Branch Out, a Connection Builders podcast.
[EPISODE CONTINUES]
[0:17:45] AD: To add a little bit onto the context of the story of how we had to make delay after delay. We had delayed it at one point, I think you'd reach back out and I pushed it six weeks out, something like that before we had it. I was like, "No, I'm real busy right now." I myself was in some version of that. In particular, I was taking some time off of the podcasts. Any of our listeners that are listening can look back and see there's a gap between mid-November last year through, I guess, mid-February of this year. Part of that was simply, I found myself by the end of my last recording window being, "Whoa. This was a lot."
I had a lot of moving pieces around me and felt very overwhelmed and it felt – and I definitely could see, whether it be in some of the recordings I was doing, or just showing up in other elements of my life, the ability to unlock some of the creative thinking that was necessary to problem solve some of the projects I was working my way through, the stuff that tends to be higher value add, I felt that not outputting the way it should have that element. Having some real throughput issues there. Where it felt like it was coming from was – because these podcasts, it's a lot of work, it's a lot to reach out, to find people, have the conversations, record it, process it, produce everything, promote it afterwards, and to keep the cycle.
Don't get me wrong, I enjoy it. Honestly, it's probably my favorite part because of the conversations. Just like speaking, right? When you're out there, you're out doing that. Maybe I'll put this in context for listeners. If you are a professional that bills hourly, just for example, and that's a whole different conversation of hourly billing. But let's just say you are, and you like the technical work, you enjoy doing it. I enjoy doing this, you enjoy speaking, you commit, you keep doing, and you enjoy, and you enjoy. Then all of a sudden, you realize, you have so much on your plate that it feels like you're constantly spinning. It's the scarcity effect, right?
You don't have time for anything. You start having to let certain things slip or not putting in the time to do the things you know that help prepare you and help you show up better, or doing it kind of just barely good enough, and just to the best that you think you can get by with. That cycle, I think that is, in many ways, the burnout that we feel, right? At least, it's stage one burnout, where you're starting to feel that you're not quite there. But that's where the scarcity and overwhelmed feeling is off, it's an emotional feeling. Oftentimes, they're interrelated. I'm scarce, so I say yes to everything. I become overwhelmed because I said yes to everything.
[0:20:16] DL: We come back to, what is the purposefulness of it? When I'm working one on one with business owners who are in transition, and their advisors, I can tell what's happening when someone in the process is trying to – one of the lines that I use a lot is, it is a transition, not a transaction. For a business owner who is selling their business, this is the single largest transition in their adult professional life. To the advisors, this is one more transaction. But when we miss that connection, and we're focusing strictly on the transaction, it's about efficiency, it's about pushing it through.
We completely lose connection to the fact that the other person that we are interacting with is having an emotional experience. I often hear bankers, or lawyers, or financial advisors say, why are they so emotional? Why can't we just get that emotion under control? Because we are emotional beings, and because transition is change, and change brings up fear. Fear is going to show up in an emotional way for all of us.
[0:21:47] AD: It's bouncing around in my head right now. You and I have talked about this before a lot around deal making and my previous life was investment banking and sitting on the sell side most often and advising the client through the transaction process. You are spot on about the scarcity, there's always more work to do, it never ends. I'm going to say a statement that we'll come back to in a second, time kills all deals.
[0:22:13] DL: I know where you're headed, say it loud, say it proud.
[0:22:16] AD: All right. We'll use this to dig in. For anyone who works directly in the deal world, especially someone who sits in an investment banking, or private equity seat, if you are a deal maker, and tightly involved in the transaction process. There's typically this statement that goes around the common knowledge is, time kills all deals. That is a mantra in many ways that it's accepted. You and have had some discussion around this. Denise, why don't we start with, tell me your thoughts about the idea of time killing all deals. Then let's peel into it a little bit, and what it means, and how this all ties into that emotional capacity, and how to be a good advisor.
[0:22:56] DL: Whenever I hear someone say, time kills all deals, I know that person is the most frightened person in the room. Because their worry that something outside of their control is about to spin out is what they're communicating. Let's talk about time, and fear, and those things, and how they come together.
[0:23:21] AD: Can I pause you for just a second?
[0:23:22] DL: Of course.
[0:23:22] AD: I want to hit home on what you're saying there. If you're saying that I have unquestionably said that in my career multiple times, and certainly, in the client setting, which is probably wasn't necessarily the best phrasing now in retrospect seeing it. The statement, time kills all deals. The real mantra meaning behind that is, anyone who is a deal professional knows that as time goes on, as more and more changes in the world, whether that be the economy, the seller's mind, the buyer's mind. market dynamics, a customer, any sort of variable has the potential to blow the deal up, to change the deal. Because as you're working so hard to come to these terms, and all of a sudden one of the variables changes, the terms no longer make sense. That's typically when a deal will crumble and fall to pieces.
In your point around the fear, the reason saying that is expressive of that fear is because you're worried that things outside of your control are going to end the work that you're doing. I think that's genuinely true. I think it is a genuine fear that happens. But talk to us more about where fear, and how that fear and control kind of intersect, and how that affects everything.
[0:24:28] DL: I love this conversation because I know for a fact that some of your listeners got so triggered as soon as we went down this path. I said time is not what kills all deals. What kills deals is unprocessed emotion. The unprocessed emotion around uncertainty is what happens. I'll give you an example. For those of you who are listening, who got all up in your head about – but time does kill deals, she doesn't know! What I want you to notice is how revved up that can make you feel. Often, what we see is that the person who has said, time kills all deals has gone into catastrophizing mode.
When I say unprocessed emotion is what kills deals, not just time, can I put it in the context of an example recently? I was doing a Zoom training for an investment bank. They're very time-focused, they have a very structured process, they ask their sellers to commit to a set number of days that they will not exceed to have the transaction closed. They're very structured and rigid about it. I knew that phrase was going to come up. When someone said, "Well, time kills all deals,” and I made my comment, which is, "Actually, time is not what kills all deals. It's unprocessed emotion."
I watched the founder on – because we were all on the Zoom screen. I watched the founder of this investment bank, I watched his face go red. I was like, "Oh, we just touched somebody's emotion here, didn't we?” in a pretty clear way. As I continued talking about how a deal is like the children's game Chutes and Ladders. If you imagine, for listeners, and you're moving your little mark across the board, and you spin the dial or roll the dice, and it tells you how many more spaces you can move. Sometimes, you'll hit a ladder, and the ladder sends you up the board and you're thinking, "Woohoo, we got it going. We’re going to win." Then two spins or rolls later, you hit a chute, which slides you back down on the board.
As children, we know that experience of disappointment and discouragement, and like, "Ugh." What we'll see is that if we don't help a child, we're using children as our example here. If we don't help the child to settle around that disappointment, they will want to flip the board and leave the room, right? In a deal, the same thing is happening. Every time we hit one of those shoots of disappointment, everyone's emotion is up. If we're able to resolve that and settle, we can go to the next move. If we don't settle that, what happens is, the level of anxiety continues to creep up until someone wants to flip the board.
As I was watching this particular banker unravel on the screen around it, I knew that what he had done was gone to catastrophizing, and he suddenly blurted out, "So what? We're supposed to wait two years for a deal to close?" I just smiled a little bit and I said, "Well, how do we go from allowing someone's emotions to settle to it taking two more years for a deal to close? What if addressing the emotion that is in the room is a 12-minute delay or a day-and-a-half delay? How did we suddenly go from, I need to keep pressing forward to two years?"
[0:28:36] AD: I'm at a loss of words in many ways because what you're describing, to give context again, the first time you and I chat about this, which is at some point last year, we are talking about this. I remember when you said it. I do remember the hair on the back of my neck almost standing up like, "What are you talking about?" Of course, it does. Also, even more, that the scenario you described, I can feel myself being in that situation, I can feel the – it resonates very, very strongly with me.
For anyone who's in the deal profession or who is sitting in some of these high-stakes discussions will feel and understand that emotional element of that, right? Especially if your compensation is tied to it. That's a whole other conversation there. But what you're pointing to, and again, I look back in my time doing deal work, I was very often emotionally charged. In some ways, there's a positive part of emotions, right? Being excited, being driven, being thrilled about like, "Hey, this is cool. This is going to work. We've got this great opportunity. We're going to help someone solve a problem." Kind of having that motivation, excitement, and drive to show up, and do good work, and be tenacious, and navigate things, and put in the hard work that it takes to get it done is really important.
When the line flips that, again, scarcity, back to a word that's come up a lot here. When that scarcity mind flips where some – I need this, it has to close. If we don't do this, it's going to die type of thinking, which is common to your point around slowing down and processing. I'm thinking internally in my mind, but then we can – I'd love to switch it to externally the client that you're serving. But me, as the advisor, if I'm feeling scarce, and worried that I need to get this done. Once it crosses over a line where the pressure is too high, that's no longer excitement, and drive, and focus, and motivation. That's burnout, and overwhelm, and loss of focus, and poor decision-making, and potentially apathy as time goes on.
Deal fatigue. For anyone that's worked on a deal, your deal fatigue sets in, because you're just – you're so worn out of going through this again, and again, and again, and the challenges. Knowing that that affects the way you outwardly communicate with client. I want to dig into how you think that affects. One thing I want to say before this though leaves my mind. For anyone who's in a leadership position, working in deal teams, understand too that the culture and the environment that you create for the team, and the staff and kind of like, not just the way you outwardly expressed to the client, and outwardly engage and express your emotions with them but also the internal side of that has a real effect on making sure to turn up that emotional dial enough to get focused in performance, and drive, and dedication.
But not too much, and not for too consistently long, and not unreasonably like know that if you do turn that dial too far for too long and too hard, it does create burnout for everyone else. Then you're losing productivity across the entire team. Then it's not just the client side. Now, your feeling of overwhelm just kind of compounds because it feels like work isn't even getting done, and you've got to drive harder and push harder, and it becomes a really bad cycle beyond that
[0:32:00] DL: It slides into force and panic. What I'm talking about doing is being able to pause the content, which is the deal or whatever we're talking about, to deal with the context or what's going on under the surface. We'll just use another – you know, this is not just around deals, this is in every part of our life. Can we agree that the argument you have with your spouse about why you didn't put the mustard back on the right shelf in the refrigerator is not actually about the mustard? Right? Can we all agree on that?
[0:32:37] AD: The best arguments are the ones where you get a little bit into it, and then you finally look at each other and say, "What are we arguing about again?"
[0:32:43] DL: Right? Where you realize, can we pause the content? Which in this case is the mustard, so that we can deal with the context. Which is, I don't feel heard, or whatever the subtext is under that. Because otherwise, you're going to repeatedly argue about the mustard, when what you're really dealing with is an emotional element underneath. What often happens in a transaction, and we'll just continue to use it in a transaction but it applies in so many parts of our professional life, whether or not you're a deal professional.
Something has gone wrong, or there's a misunderstanding in a deal, what often happens is that one party says, "Yes, yes. We'll deal with that later. Let's just keep going." What has happened is, emotion has risen up to the surface. Now, we're trying to cram it down. Can we agree it's just going to come out somewhere else like a mushroom, it's going to pop up over here, pop up over there, or we have a breach of trust? We are wired for connection and attachment. As babies, if we don't attach, we die.
Imagine what happens when we are in a situation where we are being overpowered or feeling abandoned. That is immediately tripping the amygdala of the fear sensor in our brain. Can I use a visual? I'll talk through this visual for those of you – because you won't be seeing it. and I cover it in my book. So if you want more detail, you can go there. But imagine, just open your hand and imagine – we're going to talk about a little brain science right now. Your thumb is the amygdala, it is the fear sensor in your brain. It's a helpful part of our brain, but it's also kind of a dumb part. Its purpose is to spot danger, but it can't always tell real danger from perceived danger. The amygdala, which is also called the lizard brain, it's the oldest part of our brain, is always scanning the environment. If you think about moving your thumb around like a lizard would be looking, it's looking for danger. If it spots it, it will flip our prefrontal cortex, our thinking brain offline. That's happening all day long for all of us.
What if we were able to simply take a pause, and realize I was teaching a workshop last week in Austin? I could tell that the emotion was getting kind of high in the room because I was asking them to do some things that were a little charged. I said, what if we just take a break? I think I need to use the restroom. Truth is, I didn't need to use the restroom. I needed to take a little break to let the emotion come back down in the room. Could I have just kept pushing away? Of course. Does that serve the content? No.
[BREAK]
[0:36:04] ANNOUNCER: This is Branch Out, bringing you candid conversations with leading middle-market professionals.
[EPISODE CONTINUES]
[0:36:12] AD: Let me pull an example that I'm reflecting on as you're speaking. I won't give any specifics behind this, but this is as real an experience as I can share. If you are in the seat of an advisor, working with a client that is going through a transaction, and if it's a partnership-based business, which many times it could be, or if it's an individual. So let's talk an individual first. They're selling their baby oftentimes. If it is a single or family kind of owned enterprise, that's their baby, or it might have been their parents’ baby that was given to them that they were entrusted to take care of, right? That is a very emotionally sensitive element. That's often their identity, it's often everything around them. It's everything they know.
Parting ways from that, either partially, or entirely, or even a transition over time, however that ultimate event looks like is a very emotional process. It is very often, and I think this applies for many, many transactions done. It is most individuals, one shot at wealth creation. True wealth creation. That means a lot. That has legacy kind of effects, right? Multi-generational effects. Regardless of how big those dollars are, oftentimes, that is for those individuals, for anyone who is owning a business and built the business, especially if they've spent their life building it, this event is a really big deal, really big deal, right?
Now, on top of that, you have partnership dynamics, oftentimes, if you have multiple owners, right? Different partners at different stages of life, different objectives in their career, and different financial desires, different lifestyle desires, different objectives in general, that are – just because they're partners, just because they've worked together for a long time, doesn't mean that they have kind of implicit trust, that everyone's not just there for themselves.
Part of when you're pushing through a process, and if you are really pushing through it, and not addressing some of those concerns, and trying to layer over that, what you're going to have is someone who had a concern, that was probably a relatively simple thing to address. It would have taken a little bit of time. But at the time would have been addressable, that sits on that, and then it happens again, and then they sit on that again. Now, they get farther in the process and say, this is stupid, this doesn't make sense for me. I don't want to be doing this.
Other partners may be fine, or other constituents of the deal may be fine with where it's at, but this one person doesn't want to, they just simply don't. The truth is, the reason they don't is because they're scared about the impacts of that. Think that they're getting the short end of the stick. They don't feel like they're part of the circle, they don't feel like they're kind of on the same page as everyone else. They think it's them versus the other people in the room, and that the advisors are really just serving this small constituent of the board, it's not serving the entire – all that feeling that builds up is where someone starts to just really not want to do something, right?
That's the emotion that's been charged in the client because you didn't address and identify those challenges early enough to understand the magnitude of the effect it's going to have on that individual.
[0:39:24] DL: I think also, the advisors are so focused on the transaction. By the way, I think a lot of advisors are traumatized by the emotion that has shown in prior transactions which scares them. They will say things like just like, "Put that emotion away. Think logically." I will always say, if you are talking sense to someone and getting nonsense back. Emotion is in the room.
[0:39:53] AD: Say that one more time. That's a good – I like that.
[0:39:56] DL: If you are talking sense to someone and getting nonsense back, emotion is in the room. You can try to pretend it's not happening, it's like, I'll just say it louder or slower. That doesn't make the emotional issue go away. Because advisors are often concerned about not knowing how to deal with this emotion, when it comes up, they try to squelch all emotion, theirs, their clients, and opposing counsel. Can we agree there are plenty of times when lawyers are arguing about things that make no sense? You're like, why are you still arguing about that thing? There's an emotional reaction that's happening between the lawyers. Sometimes that's what's going on
Sometimes, our owner, we refer to it as their baby. I will tell you, Alex. I think it is actually amazing, the business owners entrust to us their most prized possession, other than their children, and their family. Because they have built this or nurtured it. I forgot, Alex. Do you have kids.
[0:41:17] AD: No, no. I have a dog if that counts.
[0:41:20] DL: Yes. Everything counts. I'm going to put this in the context for some of your listeners who have children. At some point, you will walk that child down the aisle, and put their hand in the hand of another person. You hope like heck that that person who is going to take your beloved child will care for them the way you did. Also, as a parent, you know that your relationship to that child will be forever changed. Our business owners are experiencing that kind of transition.
Yes, they have built it, they've raised it, they've grown it up, and they know it's time now to transfer it to someone else. Everything is getting churned up for them. A good advisor, who is prepared to attend to this can help keep an owner settled, and resettled, and resettled through the process. A bad advisor and I will say, there are bad advisors. That doesn't belong here. It's the reason we've called this episode Giving Emotions a Seat at The Table. Because the truth is, they will be in the room.
Do you want to be able to know what the emotion is and how to attend to it? Or do you just want to try to shove it out of the room? Because guess what? Your owner is attached to those emotions, and your owner will end up fleeing the room as well.
[0:42:54] AD: Could not agree with you more. We certainly do not have time in this episode to dig into this, but I'm going to make an assumption here that, if you are a deal professional that wants to improve your ability to identify and address emotions in the room, that might be a reason to reach out to you and have a conversation with you. Is that a fair assumption?
[0:43:14] DL: Yes, that would be great. I'm often brought into a transaction because everything has gone to hell in a handbasket. Someone remembers, "Hey, do you remember that lady we met? Maybe she can pull the cookies out of the fire right now and save it." That's the less helpful time to bring me into a conversation when I come in and everything has already fallen apart. Now, we have to do that in a way that doesn't make an owner feel like they were naughty and just got sent to the guidance counselor's office. The truth is, that it's often members of the deal team who are also contributing to the chaos.
My tagline is The Seller Whisperer, but the truth is that I am moving seamlessly throughout the transaction, helping to settle the emotion of all of the participants. Because when the seller gets scared and starts to pull out, so does the investment banker, right? The investment banker or the broker is immediately – there goes my commission, and they start to grip. None of us like be in a place where we feel forced, or where we feel frightened. The work that I'm often doing is helping to give emotions a voice so that we can attend to those and resolve the context so we can go back to the content in the deal.
[0:44:42] AD: This was a great conversation. This was – I feel like we dug into some really important thinking, and maybe discussions that aren't happening all the time.
Denise, what would you say – as a kind of a parting final question for you – or someone who's listening to this and saying, "Okay, yes, you're right" and maybe there are some emotions in the room, whether it's in a transaction process in my own life, and in other, in my professional life, in my personal life. I’m feeling that maybe I'm not doing a good job of understanding and addressing the emotions going on around me. I feel overwhelmed or I feel these things. What would you give as kind of a high-level, easy advice or place to start as an individual understanding it and learning that better?
[0:45:27] DL: Seller's remorse is a real thing. It unravels. I mean, we know in the industry, only 30% of the companies that come to the market, successfully transition. That is a tragedy for the business owner, but also for all the professionals. Because a professional who takes on a deal, and doesn't close it, it feels like a waste. I think one of the things I've seen happen, Alex, in the industry is because closing ratios are so low, we find advisors taking on more, and more and more work. Thinking, if I have a hundred transactions and only 30% are going to close, then I can cut faster. The actual way to close more deals is to slow down.
It seems counterintuitive, but just like when you're turning into a curve, sometimes it's about taking the curve at the right angle. What we have for advisors is, instead of saying – and we're creating this problem for ourselves. We take on too much work, because we say, part of these are never going to close anyway, then we don't invest in them well, and we force, creating the very same conditions that traumatize us into thinking the deals won't close.
If we choose our clients well, if we attend to the emotion that is happening, those deals close. They actually close with ease, and the seller who is on the other side becomes the very best referral partner you could ever have imagined.
When instead, we rush through deals, and dump people out, traumatized on the other side, whether it's the advisors or the clients. We set up the conditions where owners come to the process already afraid. They come in thinking, the banker is just going to force me, the lawyer is just in it for the fees, someone's here to take advantage of me. Then we set up the very fear that makes deals fall apart.
[0:47:43] AD: It's the scarcity, right? I think maybe you might have said this one of the times we talked before, and it's a common phrase, but I really like it. Slow is smooth, smooth is fast. Recognizing that so often, when we are feeling that kind of revved up emotional state, it really is a level of just overpressure, overwork, overwhelm. Too much coming at you, too many different things, scarcity thinking. The real answer is whenever you're in that state, and it's way easier said than done. It is to slow down for a minute, figure out what's going on, address everything that's around you, regroup, and then proceed. And understand that in doing that, again, always easier said than done.
But in doing that kind of part of the work, regardless of whether it's a deal process or any element of your life, that's what helps you gain the clarity to know what you're trying to accomplish, where the real pain points were, and to move forward, and to put your energy into the right things to show up. If you do that, and again, regardless of what element or what aspect of life you apply that in, your outcomes tend to be better. You may not see it right away, it may take time, but that is often the solution.
[0:48:53] DL: It comes back to the early conversation we were having about burnout, right? Some of why we feel burnt out and unsatisfied in our work is because we've lost the connection to, why am I doing this work? I'm only doing this work to do more of it, to earn a fee. Listen, money matters, but money is not the only thing that matters. When we're able to do transactions in a way that actually honors this, I think it is – I'll just say it again. It is amazing that an owner trusts us with the most important part of their professional life. I think it is a sacred duty that we are invited into.
When we see the bigger picture of what we are doing and are able to attend to it in that way, we actually feel so much greater satisfaction in the work that we're doing, which means we close more deals, which means we're not in the process of trying to churn, churn, churn. We experience it even like – Alex, I'm sure you know, people go to a conference, and they're busy getting all the business cards, right? I come home, I've got 300 business cards, and no time to do anything with those business cards, to attend to the relationship that's under them. Because we're going at it from a place of fear. Somebody's going to get the deal, and if I'm just in all the places, maybe I'll get the deal. Instead, the reality is that those transactions that we're most likely to be able to close are those where we have a deeper connected relationship with the other party.
[0:50:39] AD: Another point made earlier around maximizing scale. However I'm going to maximize what I'm getting, and if I'm measuring the wrong thing, because I went too fast and didn't slow down, and realized what was really important to measure. I'm just measuring the, as you say, getting the business cards. I like that example. Unless that's my strategy, unless I believe that's the appropriate strategy, I just I struggle to see the appropriate ROI there in many cases. The reality is, that shouldn't be your strategy and that shouldn't oftentimes be what you're actually focused on.
But if you're going too fast, and you didn't slow down, recognize that, create a plan around that, and then approach it with that intentional plan. You may end up walking out the other side of the conference in this case with a lot of business cards that aren't going to get you far, and that you feel overwhelmed with anyway.
I can say that from – I've absolutely done that in my life. Absolutely. That feeling, right? It feels like I don't have time to slow down and think about it, so I'm just going to go wing it. Well, okay. But if you did slow down even just a little bit, and to your point, slowing down doesn't mean you need a four-day retreat to plan for it. It means that you need to take a deep breath and carve some time out that is dedicated to working through what you're trying to figure out, where the confusion is or where the emotional angst is, or where the overwhelm is coming from, or it's a small investment of time.
But to this entire conversation here, when you give emotions a seat when you create that space, and you slide – we've got this table with chairs around it, we actually make a little bit of room, and slide another chair in there, and that space that we create, we spend time, and allow that emotion to have that seat there. We do oftentimes perform better. A lot more gets done, however, you want to measure that on the other side of it.
[0:52:25] DL: Yes. I think people are worried that if we give emotion a seat at the table, it will overtake the conversation. That somehow, if we allow emotion at the table, that's all that will happen and it will derail everything. Often, that's the role that I'm serving, being the place where emotion can get funneled so that it can be attended to. As opposed to, it being in the room and it is causing chaos around us. Can we give it a designated place, and its appropriate space and time in the conversation?
Someone in every transaction is usually doing this work and hates doing it. There was someone who is getting all the emotion dumped in their direction and they were like, "Stop, I don't want this." That's the unique, special role that I'm like, "Oh, bring that here. Let's attend to it." Then send someone back into the conversation from a place of being settled and grounded so that they can hear and think logically about what's being presented.
[0:53:37] AD: Denise, how can listeners get a hold of you? What's the best way to get in touch with you? Because you clearly offer a unique perspective and a great service in the marketplace here. So what's the best way to get in touch?
[0:53:45] DL: Oh, thanks. My website is super easy, deniselogan.com. You can email me at denise@deniselogan.com. I have a book called The Seller's Journey, which is available on my website or you can get it on Kindle or Audible. But it is about the emotional obstacles that owners face in the process of selling their business, and how an advisor can help them navigate that more smoothly. It's written as a business fable, which is better than a how-to book. It's the story of an owner one year after he exits his business. He goes on a trip across Glacier National Park with his banker, his lawyer, his financial advisor, and the private equity buyer who bought his firm. Some of you are thinking, it sounds like a murder mystery right now. But as they cross the glacier, they relate the physical obstacles they're facing to the emotional obstacles that they faced in the transaction. Imagine what it would be like to do a deal in a way that you would actually want to go on that kind of trip with your partner.
[0:54:58] AD: I'm going to have to read that. Knew that you'd written a book. I honestly just have not gotten around to reading it. I'm going to list that on my list because that sounds absolutely fascinating. We'll make sure that's linked in the show notes below here. For our listeners, please make sure to reach out to Denise to check out her book. Appreciate the conversation today. This has been an awesome recording, and I think we've dug into some really great places throughout all of this today.
[0:55:21] DL: Thanks, Alex. It was my pleasure to be with you.
[END OF INTERVIEW]
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