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Welcome to Stephen Dietrich's Blog

Here, you’ll find news from our office, insights and observations from trusted sources in management consulting, testimonials from our clients, resources and recommendations of note, and more. Read a post or two and comment on anything that strikes a chord.

Fight, Flight, or Freeze: Are Those the Only Options?

For our own protection, we are hardwired to fight, flee, or freeze when we perceive danger. The brain’s amygdala triggers a release of stress hormones, including adrenaline and cortisol.

Your heart rate jumps, breathing becomes shallow and rapid to take in more oxygen, your throat tightens, your face gets flush, your palms get sweaty. While the fear response has been very helpful historically and in the physical world, it is a useful indicator in our personal or business relationships, our careers, our finances, or even our freedom. The fear response serves as an early warning of potential threats and let us know when “something just doesn’t feel right.” However, it can seriously interfere with our engagement with the world if it disengages rational thought processes. In the midst of a fear response, complex decision-making and memory are inhibited. You lose the ability to view a situation from multiple perspectives, so you tend to see complex issues in black and white.

When I am in a heated moment of a transaction or negotiation I find that I need to actively slow myself down and “take a beat” in order to engage thoughtfully and rationally. Early in my career it seemed as though I would take the emotional bait of fear and anxiety in a situation and find myself being reactive to challenges or emergencies in a transaction. Through experience and self-introspection, I have found that if these impulses can be moderated, better decisions and advice are more likely to occur.

As you might expect, the fear response can lead to conflict and prevent people from making well-informed, rational decisions. It can cause people to act out of

Fear Dynamics 101: Part 4, Reaping the Benefits of a Fear Audit

Welcome to the final part of my four-part series: Fear Dynamics 101. In Part One, “Defining Fear Dynamics,” I introduced the concept. In Part Two, “Recognizing the Warning Signs,” I illustrated several common symptoms of fear that arise in group settings, so you know what to look for. In Part Three, “Counting the Costs of Fear Dynamics,” I discussed the potential consequences of failing to address the fear factor in business. In this part, I encourage you to take the first step toward identifying and addressing fear in your organization and business deals — by conducting a fear audit.

A fear audit provides an objective analysis of interactions within an organization, between among parties involved in a business deal, or between an organization and its clients or vendors in order to identify and correct fear-driven behaviors and communications that often undermine business deals and that hinder performance and productivity. A fear audit is a four-step process, preferably conducted by an objective, third-party observer with expertise in fear dynamics:

Fear Dynamics 101 — Part Three: Counting the Costs of Fear Dynamics

Welcome to Part Three of my four-part series: Fear Dynamics 101. In Part One, “Defining Fear Dynamics,” I introduced the concept. In Part Two, “Recognizing the Warning Signs,” I illustrated several common symptoms of fear that arise in group settings, so you know what to look for. In this part, I discuss the consequences of allowing fear to govern business behaviors, relationships, and interactions.

I would not be discussing the problems associated with fear dynamics (the behavior and communication patterns that emerge during interpersonal interactions involving fear) if there were no costs that people and organizations suffer. Unfortunately, the potential costs of fear dynamics are quite substantial.

When fear operates unchecked or acknowledged, people often respond in the following ways:

Fear Dynamics 101 – Part Two: Recognizing the Warning Signs of Fear Dynamics

Welcome to Part Two of my four-part series: Fear Dynamics 101. In Part One, “Defining Fear Dynamics,” I introduced the concept and presented an example to illustrate how fear dynamics threatened to derail an acquisition I was working on for a client with the help of an accounting group. In this part, I describe common fear dynamics warning signs, so you know what to look for.

(Photo by Fineas Anton on Unsplash)

Perhaps what is most sinister about fear dynamics (the behavior and communication patterns that emerge during interpersonal interactions involving fear) is that they arise from causes unseen. Like a tsunami that swells from shifting land masses miles below sea level, fear dynamics wash over everyone involved, often without them ever sensing the cause.

Note: Although I recommend ultimately working toward eliminating fear dynamics through proactive processes, learning how to mitigate or manage existing fear dynamics can be equally beneficial and is often a necessary first step — a step that requires the ability to recognize when a fear dynamic is at work.

One of the first steps in managing fear dynamics is to learn to “smell fear” when it is influencing the behavior of one or more parties in a group. (The “group” may be an internal group, a client service group of several companies, or a group working on a transaction in an adversarial setting.) Here are a few of the most common warning signs that fear is influencing a person’s behavior or a group dynamic:

Fear Dynamics 101 – Part One: Defining ‘Fear Dynamics’

Fear is an unpleasant feeling that tells us when someone or something is potentially dangerous — that it threatens our being or well-being or is likely to cause pain of some sort. It serves the useful purpose of keeping us out of trouble; it can motivate us to take much-needed action — fight, flight, or freeze. And it is useful in various aspects of our lives, warning us of threats not only in the physical world, but also in our personal or business relationships, our careers, our finances, or even our freedom.

However, if it is unwarranted or excessive, fear can warp perception, stifle innovation, erode confidence, undermine trust, and trigger conflict. Left unchecked or misunderstood, it can paralyze an individual or an entire organization and lead people to make poor decisions with potentially catastrophic consequences. Yet, fear in the business environment is rarely addressed in any formal way. In fact, most do not even recognize the warning signs. As a result, many suffer the consequences —

Cheers to the Agents of Change

Small or massive, change is as draining as it is invigorating. I have been reflecting on this dichotomy recently as I navigated the change in where I “hang my shingle,” as they say in the legal world. The transition has subjected me to alternating waves of great hope and mind-numbing laboriousness, often in rapid succession.

During this life-changing event, I tried to take a step back and reflect on what change must be like for my clients and connections. I spend my days facilitating change in companies and for individuals. Whether it is the hiring or firing of an employee or the purchase or sale of a ten-store dealership group, the constant is change. I often am involved in significant change with my clients where the future goals are large or the failure risk is high. These sorts of situations consume energy at high levels for all the players involved. I had understood this at one level before I made my change, but have come to a new appreciation of what is really involved in these situations.

I have also come to realize that the type of energy in change situations is different than that needed to maintain a routine or pattern. This makes intuitive sense, as the energy needed to evaluate new and changing facts and circumstances differs from that needed to

The Downside of Negativity Bias and Other Patterns

My 14-year-old son has started to use the phrase, “triggered” while we are watching a program on television. He is referring to an irrational response a character has due to a past event. Or sometimes, quite often actually, he directs this expression directly at me, his father, when I respond in a way he finds irrational.

This made me think about how past encounters with clients and other participants in a transaction or project may affect our current perceptions and behavior. When you stop to think about this statement, it may not be an “A-ha” moment, but one that definitely feels familiar. I raise this issue because, while it may be obvious, we find ourselves being blindsided by this phenomenon at times and it’s easy to see how it can play out with other relationships in business settings.

One of the clearest examples of a trigger that I can recall involves an intermediary who was providing information for several different transactions. The information for one of the transactions was

The Deal or the Money: Which Should Come First?

Cash is king. Money talks. Take the cash. These expressions are ingrained in our minds and influence our business decisions. After all, when it comes to selling a business, the seller is often well advised that when presented with two similar offers, they should opt for the cash offer over one from a buyer who needs to secure financing. However, when presented with such an option, the choice is not always that easy for several reasons:

  • Good buyers are hard to find, and when you are selling a highly valued business, the buyer pool shrinks considerably (almost exponentially, it seems).
  • A good deal is rarely just about the money. As I point out in a previous post, “Top 5 Do’s When Negotiating the Sale of an Auto Dealership,” getting top dollar for your business is certainly a key consideration, but you may also want to consider your legacy in the industry and in the community, the future wellbeing of your employees, and whether the new owners will continue to run the business according to a certain set of principles or core values.
  • You cannot always judge a buyer by the amount of cash that buyer has on hand. A great prospect may need or want to finance all or a portion of the deal for any number of reasons, including the possibility that the person’s cash is tied up in other very successful ventures.
  • The fear, distrust, and uncertainty that surround non-cash offers can cloud a buyer’s judgment and derail the offer that holds the greatest potential upside for all parties involved.

The key to evaluating offers is to ask the right questions. Instead of asking whether a prospective buyer has the cash on hand to purchase the business, consider all the terms of all offers and ask how likely it is that the buyer you want to sell to can secure the necessary financing.

Choosing the Right Leader for Each Stage in a Company’s Lifecycle

Recently, I had an epiphany when I was working with a company that was struggling in its current state: This company had the wrong leader for the current stage in its lifecycle. The current leader had done a great job getting the company to where it was, but now that it was established, it needed to function in a different manner. The company needed to transition from start-up to growth mode — a transition the current leader was ill-suited to navigate.

In simple terms every company, assuming it survives, proceeds through four stages:

  • Stage One: Founding and creation
  • Stage Two: Growth and maturation
  • Stage Three: Development and expansion of core competencies
  • Stage Four: Exit or monetization

Each of these four stages requires strong leadership, but rarely is a single individual best suited to lead the company at every stage.

Patience cartoon

Patience as a Virtue in Deal Making

“Patience is a virtue” is easier said than done, especially when parties are embroiled in the tense negotiations that often accompany business deals, and especially when self-imposed deadlines are nipping at their heels. But deals rarely benefit when a deadline takes precedence over the deal itself. In fact, far more often than not, pausing to reflect enables good things to happen and prevents unforeseen negative consequences from occurring.

Certainly, the need for speed and sustained forward progress makes sense in any business deal, but I have yet to encounter a deal that has suffered from taking the time to re-evaluate based on new information or insight.

Patience cartoon

Often, the original thesis (the reason the deal makes sense for both parties) is verified and the deal moves forward, perhaps with some adjustment to a post-closing operational matter or an allocation of risk. In some cases, the new information changes the