agreements | The Barefoot Spirit

Reach an Agreement, Don’t “Cut a Deal”

Michael Houlihan & Bonnie Harvey — Thu, 14 Feb 2019 18:00:36 +0000

What’s the Deal with Deals?

There’s a new four-letter word that has become ubiquitous in our lexicon. It’s all over the news feeds and headlines. We hear it every day on the evening news. What’s the word? Deal!

The word “deal” has been used for years to describe some kind of a settlement between two parties. Each party wants to they got the best of the deal.

Deals have been used to describe real estate transactions. Usually, the parties are polarized and have to give in to come to a deal. One side usually out-negotiates the other. Usually, one side “caves in” and the other side “wins.” There’s lot’s of posturing on the front end and recriminations on the back end.

Just angst what everything (There are winners and losers on deals. In the automobile business, you try to get a good deal on your next car. In gaming, it’s the card dealer, the dealer’s choice, and the double-dealer you have to watch out for.

If this is starting to sound competitive and contentious, it is. The meaning of the word “deal” is certainly far away from empathy, cooperation, and reciprocity. Those are the ingredients of a well-crafted solution to the various and differing needs of the stakeholders. That’s why we prefer the term “agreement.”

A More Win-Win Term

Just the word “agreement” sounds positive. It sounds like both sides achieved a win-win. Both sides worked toward an agreement. Both sides made intelligent concessions and worked together to make the whole greater than the sum of the parts.

You “cut” a deal, but you “reach” an agreement. Deal-making has become competitive and lately has been reduced to some form of extortion, coercion or hostage taking. Whereas, when you make an agreement, it reflects a constructive, respectful, and mutually beneficial arrangement.

By referring to a desired settlement as an agreement, you diffuse the ego-laced posturing and angst implied in some sort of a contest. You set the stage for the type of friendly collaboration in which stakeholders can engage in a productive process of discovery and accommodation. And going forward, you bond with the other party without regrets or grudges.

What’s in a word?

Everything! When you are negotiating a business solution. Before, during, and after the process, why not use a word that communicates your respect for the other party and your belief that, by working together, you will achieve a mutually beneficial relationship. It opens the door for future cooperation.

In our business, we always used the word “agreement” to achieve extended credit, national distribution, and connections with the right people at the right time. There were always two or more “winners”. The key is not to view the other party as an adversary but as a partner. In a real estate deal, the parties are done when the transaction is done. But in most businesses, agreements can be the beginning of strategic alliances that benefit both parties well into the future.

Stop Cutting Deals, Reach an Agreement

Let’s stop encouraging the use of the word “deal” with all its competitive and short-time connotations. Let’s get back to the reality that we are bound to work together for any kind of true, secure and long lasting arrangements. And let’s stop being entertained by watching deal-making as a sport where there are two foes jousting it out with a winner and a loser.

After all, if there is a loser, both sides will eventually lose because the other side can’t wait to get out of the “deal.” We have found that if you can’t trust the other party, there’s no written legally binding contract that will hold them to a level of performance anyway. Sure, you can sue and make the attorneys on both sides rich. But is that how you want to spend your precious time and money?

The Japanese think it’s impolite to talk about anything but the weather for the first five minutes of any business conversation. They use this seemingly pointless dialogue to establish a base of agreement by first acknowledging what they have in common with the other party. They know that establishing a sense of commonality with the other party sets the tone for a friendly and more productive process of discussion, discovery, and ultimately long-term, mutual benefit.

Let’s stop cutting deals and start making agreements! Everyone can be a winner!

Who We Are

Michael Houlihan and Bonnie Harvey co-authored the New York Times bestselling business book, The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. The book has been selected as recommended reading in the CEO Library for CEO Forum, the C-Suite Book Club, and numerous university classes on business and entrepreneurship. It chronicles their humble beginnings from the laundry room of a rented Sonoma County farmhouse to the board room of E&J Gallo, who ultimately acquired their brand and engaged them as brand consultants. Barefoot is now the world’s largest wine brand.

Beginning with virtually no money and no wine industry experience, they employed innovative ideas to overcome obstacles, create new markets and forge strategic alliances. They pioneered Worthy Cause Marketing and performance-based compensation. They built an internationally bestselling brand and received their industry’s “Hot Brand” award for several consecutive years.

They offer their Guiding Principles for Success (GPS) to help entrepreneurs become successful. Their book, The Entrepreneurial Culture: 23 Ways To Engage and Empower Your People, helps corporations maximize the value of their human resources.

Currently they travel the world leading workshops, trainings, & keynoting at business schools, corporations, conferences. They are regular media guests and contributors to international publications and professional journals. They are C-Suite Network Advisors & Contributing Editors. Visit their popular brand building site at www.consumerbrandbuilders.com.

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Maximize Communications Technology to Avoid Misunderstandings

Michael Houlihan & Bonnie Harvey — Thu, 15 Jun 2017 17:00:02 +0000

Today we have many methods of communications. But which ones are the most appropriate for what kinds of communication? When should we use in-person, video conferencing, phone, email, or text? Some folks favor one form over another, but each has its place and should be used accordingly. Here is our short list for communications etiquette.

In-Person: This is still, by far, the most effective way to establish a relationship. You have a chance to read body language and so do they. You demonstrate your undivided attention by your presence. The time you have taken to physically be there also adds to your credibility. In-person is best for first meetings and important negotiations. It’s also a great way to diffuse any misunderstanding.
Video Conferencing: If you can’t meet in person, video conferencing is the way to go. It’s live, it’s real-time and it has many of the advantages of an in-person meeting. You can read the other person’s facial expressions to see if they get it, or if they have issues, you can address you can address them on the spot. Many misunderstandings are avoided by face-to-face conversation. We like to set up a video conference with anyone we are considering doing business with. It breaks the ice and they can see that we are real human beings, same as they are.
Phone: We have a client who is in the relationship sales business who says, “We have mastered an ancient form of communication: the telephone!” Before you laugh too hard, he has determined that phone sales are 108 times more effective than email sales. Why? Because you can hear the tone of the other person’s voice and make changes on the fly. You can give explanations quickly that would take mountains of back and forth emails. And your sincerity can be heard in your voice.
Email: We believe the best use of email is to document or flesh out agreements made in real-time. We send an email on the heels of a real-time meeting that basically says, “These are the understandings we have as a result of our meeting today. Please let us know before 5pm if we have anything incorrect. Otherwise we will proceed based on these understandings.” Email is a great way to memorialize conversations, but as a sales tool it is grossly abused, overused, and opened less and less. When it comes to requests, we like to ask for only one thing per email. If you ask for a list of things, the other person will generally only respond to the last thing on your list, causing you to go back and ask for all the others to be answered. Oh, and if you have a misunderstanding on email, pick up the phone and resolve it quickly. Don’t get into an email argument! And lastly, there are some things that should never be in email unless you want to live them down forever.
Text: This is a great way to coordinate meeting details with someone who is in the final legs of coming to visit. It’s also a great way to carry on a conversation with someone you are already familiar with and want to give them a chance to respond at their leisure (unlike the phone). Texts should be short and to the point – no more than three lines at a time. Make sure ahead of time that the other person agrees to being texted so they will keep their phone on.

All of these methods of communication have their place, advantages, and disadvantages. When you use them correctly you will have less misunderstandings and more improved relationships.

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Inventors Must Demonstrate a Market Before They Get Paid for Their Idea

Michael Houlihan & Bonnie Harvey — Thu, 18 Aug 2016 17:00:33 +0000

We have met many inventors with great ideas who think they should get paid just for coming up with the idea. There’s a ton of patent attorneys out there who gladly take money to file a patent, ostensibly to license it to the big guy who can’t live without it. They’ll even write up licensing agreements for additional fees. Seems like a short cut to riches. You just invent something, get a patent, and license it to a company who pays you to use it. That’s what they want you to think so you will purchase their billable hours.

But is it really that simple? We don’t think the vast majority of successful inventors have it that easy. In fact, we think that to even negotiate a licensing deal, you are much better off with a history of sales. Ah there’s that dirty word again, the one everybody tries to avoid. “Sales!”

When you sell your invention as a product you demonstrate a market for it. It is that demonstration, and not the patent or the licensing papers, that gives your invention value. The patent shows the world your idea and perhaps prematurely. Now that its public, you invite unscrupulous imitators with big legal budgets to copy your idea and dare you to sue. Do you have enough money to defend the patent? Three years and $300,000 later you may actually win! But by then you may have gone broke fighting to protect your patent (and you may not have even sold a thing!).

We asked a well-established and highly principled patent attorney, “What is the best way to protect my new idea?” He answered, “Fill a warehouse full of them, be first to market, sell them in interstate commerce, and stay ahead of the imitators.” That way you will establish a documented business using your idea, develop a cash flow, and be in a better financial position to protect your idea. You will also discover if the idea is viable and thereby deserving of a big legal investment. We have found that businesses buy businesses, not ideas. So build a business around your idea is our advice.

Now we are back to how you get your idea to the shelf and keep it there. Sure, you can sell your idea in product form on line, but to really capitalize on your idea, you must sell a ton of product on line and relatively fast. This is why inventors should look at bricks and mortar stores with established customer bases to introduce their idea. Off-line, bricks and mortar sales can give you one big check from one big chain, and get your idea in many stores to be discovered quickly by tons of shoppers.

But aren’t bricks and mortar stores taking a big hit from online sales? Sure they are. And that’s why there are less of them. This means that it is harder to get in them. This means that bricks and mortar stores will have to offer more entertainment, convenience, and discovery to survive. Just the place for new ideas to debut!

On-line sales are a race to the bottom price-wise, but bricks and mortar stores can sell on the merits. Online sales are limited by delivery costs, while bricks and mortar stores make short, multi-product shopping trips convenient. Inventors need notion shoppers to discover their inventions even when they weren’t looking for it. Bricks and mortar stores encourages notion buying for new offerings.

Before you spend too much on a patent or a licensing agreement, demonstrate the market for your invention. Show your acquirer or licensee that your price is worth it. Develop the cash flow you need to protect it. And focus on retail sales. You’ll have a much better chance of getting paid for your idea!

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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