Being under time pressure frequently hinders any careful search for alternatives. We are also more likely not to pay due diligence to the offer at hand. In the case of pharma companies, such rushed licensing is usually bad for value creation in the longer term. Quick fixes which regularly result in low-probability returns are not good from the business perspective.
If we are forced to negotiate under time pressure, the result is inferior deals. Reactive behaviour also causes us to cede control of the process. We may be so concerned about short-term effects that we fail to take into account value maximisation. When we are stressed, we may think that certain risks are more severe than they actually are.
Stay focused on your true objectives
It is about shaping a process that will guide you to a good decision. Beware of the following moves from your counterpart which may force you into reactive mode.
- Creating a false sense of urgency
- Forcing you into skipping due diligence
- Doing everything possible to keep the process rigid
- Not answering your questions fully
- Overvaluing minor issues to make the deal seem more appealing than it actually is
Do not allow either your counterpart or circumstances to rush you into agreeing upon a deal which may not be good. The advice in an article on the INSEAD business school website is to be patient.
Yes, sometimes a decision must be made quickly. Try to anticipate such decisions wherever you can. This means doing some active preparation so as to be ready for what might happen. The key is to become more proactive in critical situations.
-jk-