Most deals have at least one Time Bomb- a serious, foreseeable problem that may well arise later. The 1987 RJR Nabisco merger nearly exploded years later because of an obscure clause the buyers overlooked. Founders of new businesses often enter shaky deals with investors and suppliers based on overly optimistic predictions. (Recall the dotcoms). Peace treaties often break down. You can’t predict everything, but what CAN you reasonably do to spot future problems before they strike? A simple memory device called WIN LOSE can help. ^^ Here’s what WIN LOSE stands for.
WI- “What if” For example, what if sales or donations are low? Costs are higher than we expect? A key event gets delayed? Cash is tight? The folks back home object? We need to change things? We get into a fight? Try listing five plausible bad things that can happen. Does your agreement let you survive them? Better, does it address them?
N- Numbers For example, do you know what cash flow may look like 6 months from now under this deal? Profits? Taxes? If a key fact changes, what effect will that have on the numbers? Spreadsheets that let you play with different scenarios may be crucial. (Top negotiators in the real estate industry, for example, make it a point to know quickly how any change in the offer effects the deal’s economics.)
L- Lawyers Though much maligned, lawyers can actually be a real help to you in spotting and fixing bad proposed agreements. That’s because they’re trained to ask ‘what if’ questions. It is true that lawyers sometimes earn their reputation for ruining promising deals. Good lawyers ruin bad deals and save promising ones. For example, does the agreement cause you to lose control to another party under certain conditions? A lawyer may be able to spot such crucial, easily overlooked problems.
OSE- Other Side’s Expectations For example, what if you think the other side is agreeing with you because it shares your vision when in fact it wants to make a quick name for itself? That simple incompatibility may drive you crazy as you pursue the long term dream while the other party tries to make a big splash immediately. Spending time getting acquainted and learning about the other side may be time well spent.