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How Fear and Avoidance Kill a Great Deal

As I am working on several year-end transactions and stress mounts, I’m reminded of a past transaction that involved two parties who were eager to make a deal happen but became paralyzed at a crucial point by fear — not fear of each other, but fear of losing the deal. Neither side could bring itself to trust or empathize with the other. As a result, vapor lock ensued, and the deal died even after numerous issues they confronted resolved.

Fear in business

The fears of the parties doomed this deal. It was too far along and would have required at least one party to travel well outside its comfort zone, but what could have been done earlier in the process to change the fear dynamic that killed the deal?

Confronting the Fear of Losing a Deal

When I work on transactions, I quickly work to identify deal breakers. I notice them during initial client meetings and phone calls and as I review or draft documents. I note them in the draft documents and encourage the parties to discuss. I welcome such discourse because transparency alleviates distrust that may undermine deals down the road. In the deal in question, however, the two parties continued to kick the can down the road. Each draft of the deal pushed and resolved peripheral issues, ignoring core issues. Why? Because they feared that any major confrontation would sink the deal.

Both Parties and the Intermediaries Avoided Confronting the Core Issues out of Fear that Such Confrontation Would Undermine the Deal.

Sometimes, deferring discussion on a difficult point is a useful approach to achieving a specific objective, but when the avoidance of the issue affects the resolution of other issues or when an issue clearly will be a roadblock, appropriate confrontation is essential.

Back to the issue at hand, I felt powerless — as my client refused to engage — and angry, as the other side seemed to be complicit in the avoidance.

Early Action Is Key

Once the pressure had mounted, each side had become too entrenched in its position to resolve major issues. Avoidance had whittled away the goodwill between the parties to the point where the major issues seemed insurmountable. As I mentioned above, the thought crossed my mind that this could have been part of a negotiating tactic. Perhaps one side wanted to get the deal so far along that the other side would give in on the remaining issues. After all, in the game of chicken, there is always a risk of a car wreck.

However, given all the time, energy, and money expended, I do not believe that this particular car wreck was entirely the result of a negotiating approach or tactic gone wrong. Both sides had certain issues they were reluctant to bend on but failed to clarify and discuss early in the process. If they had identified those issues earlier and the two parties confronted them, either of the following more attractive outcomes could have resulted:

  • The deal would have been aborted much earlier, saving both parties time, energy, money, and aggravation.
  • The parties could have resolved the major issues early in the process, when both parties were more flexible.

Flexibility to Solve Problems and Resolve Major Issues is Much Greater Early in the Process. That Fluidity Disappears Quickly as Deal Fatigue sets in and as Options are Taken off the Table to Resolve 0ther Issues. 

Observing each party battle its fear internally and seeing the fractured negotiations unfold was both fascinating and frustrating. This was a win-win deal that fear transformed into a lose-lose scenario. The lesson: The parties could have avoided the death of this deal if only the human actors had been capable of realizing they were acting out of fear and could overcome that fear with honesty, empathy and a little bit of trust.


Disclaimer: The information in this blog post is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Stephen Dietrich, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.


About The Author: Stephen Dietrich is an attorney and author who has a passionate interest in the human side of business. His distinctive combination of legal and business knowledge, human insight, and dedication to clients makes him uniquely qualified to help corporate leaders and other C-level executives navigate high-value mergers and acquisitions, restructure transactions, and manage day-to-day operations. Through this blog, Stephen shares his extensive experience and unique personal and professional insights in the hope of stirring thought and dialogue that leads to ever deepening insights and understanding. For more information, please visit

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