Psychology Over Numbers in Deals

"The failed MSI takeover, meanwhile, was useful to Gibbs primarily in that it reconfirmed what he had already learnt about the art of successful takeover defences. He’d seen more of the psychology that came into play. He told a television documentary on takeovers that ran in the middle of the MSI attempt, ‘In takeover strategy personality is about 75 per cent of the consideration.’ Men put a lot of energy into building up a business and naturally had a lot of pride at stake. When they were under threat they frequently resisted beyond rational grounds.[8](private://read/01jrsfvkjy84rkprtbz9amfvj8/#rw-num-note-477272-550134397-8) He’d be more aware next time. MSI’s response, with its clear and simple booklet, had also been very effective."

"I loved the psychology of the deal making. Finding out what the other guy wants. What are they in business for? Is it money? Very rarely, as most company directors don’t have much money in the company. Usually, it’s for ego. Then the art is to arrange things so that the other guy doesn’t care what you get, so long as he has what he wants. If you want money and give them something that preserves or sustains their ego, you’ve usually got the basis for a deal."

"The Freightways deal exemplified the Gibbs approach. It was based on understanding the psychological drivers of the people whose help he needed; understanding not just what they wanted, but who they were. James Yonge was an investment banker with a great reputation for putting deals together, who Gibbs made sure had a lot riding on making this deal work. Yonge moved heaven and earth to sell the loan to his parent trading bank. The Freightways board comprised several proud businessmen who wanted, above all, to maintain their strong reputations in the community; after Gibbs’ initial foray into the market, they were looking for a solution that took the heat off them. His ability to read a situation so clearly had made him a brilliant negotiator. This is why those observing Gibbs most closely found him an interesting character. For all his apparent belligerence, the key to his success was his insightfulness and his empathy with those on the other side of the table."