Emotions, risk, and executing a deal

We all like to pretend that we’re cold, rational business people that make decisions based on what’s best for the organization and it’s shareholders. But after almost twenty years of brokering real estate deals, I can count on one hand the number of actual decisions I’ve seen that were completely devoid of emotion.

Most of the decisions I see have the veneer of rationality, but they are usually driven in part by fear or desire. Some people are afraid of over-extending their obligations while others are excited by the possibilities in the new. Some are afraid that stakeholders won’t approve while others are looking for shorter commutes. People don’t like to be led around by their emotions and will resist them when they have an honest moment with themselves. This can wreak havoc on a deal as principals ask to change terms mid-stream or completely scrap a negotiated deal in favor of another option.

Part of my job is challenging these desires to ensure that decisions aren’t being made at the expense of the organization. And part of my job is to address these emotional reactions and help my clients get what they actually want. It’s okay to make decisions based on some level of emotional response, but its better to be honest with yourself up front. If you’re the CEO and want to move the company closer to your home, say so. If you’re nervous about revenue certainty over the next five years and want to do a short-term deal, say so. Don’t lie to yourself, your employees, or your partners. It leaves everyone frustrated and erodes your credibility.

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