This Throwback Thursday, we're flashing back to the business classic Barbarians at the Gate. Originally a book written by business journalists John Helyar and Bryan Burrough, the HBO film version was released in 1993. Barbarians at the Gate tells the (ultimately unsuccessful) story of a group of RJR Nabisco executives who attempted to buy the entire company in what's called a leveraged buyout.
On its own, the story is a fascinating look into the world of business, and an overall great example of business reporting. It's also home to a lot of lessons for anyone negotiating on behalf of corporations. And this is no small section of the business world; in fact, at any one time, there are 15 prospective buyers for any one business listed for sale.
So what lessons can we take from Barbarians at the Gate?
Fees, Fees, Fees
Negotiations always have costs. Throughout the movie, various parties who are involved in the deal comment on how much money the purposed buyout will generate in fees. All complex business negotiations have costs like the ones mentioned. More than just costs in time, bringing in outside parties costs money which must be subtracted from the deal's bottom line.
This is an important lesson for a few reasons, not the least of which is the simple reminder that time is, often quite literally, money in the world of business. Trying to skirt around this rule never works for long. And trying to "buy time" through illegal negotiation tactics is not a great idea, either. In fact, in some white-collar crime cases, first-time offenders with no prior criminal history have been convicted and sent to prison.
Intangibles, like personalities or even broader corporate culture, can be the thing that makes or breaks a deal. Ross Johnson's first company, Standard Brands, merged with Nabisco in part because Johnson simply liked the then-Nabisco chairman, a man by the name of Bob Schaeberle. But even though Johnson went from "Who's this guy?" to a merger within a few weeks once he got to know Schaeberle, his fondness for the man didn't prevent Johnson from ousting him once the merger had gone through.
Intangibles are often hard to account for and in some cases, it really does come down to who you know, not what you know, but being aware of these unseen forces can leave you much better prepared for them. It's easy to overstep your boundaries or show off in the wrong way when you're not aware of how to read the room, but a little research and observation can go a long way.
Everyone Leaks Information
Intentionally or not, everyone leaks information or gives away more than they intend to. Even the act of not communicating is communication in and of itself. As an example, when the investment banker Jeff Beck spent months needling Johnson for some kind of LBO or merger, it was an instant tell that Johnson was considering something to that effect when he stopped taking Beck's calls.
Watch what the people around you do. More often than not, they'll reveal their thought processes in small ways that you might be able to pick up on with some patience and background knowledge.
And those are the three main negotiation lessons we've pulled from Barbarians at the Gate.
As a piece of business journalism, the story contained in Barbarians at the Gate really shines. Burrough and Helyar managed to capture an electric tale and present it with just enough flair to capture the imagination of those outside the business sector. While it's not the smashing success of 'The Wolf of Wall Street', Barbarians at the Gate is still a fun ride through a fascinating time in history.