HOW TO CLOSE THAT DEAL: Granada is splitting its media and catering interests as a prelude to a bid for one of its TV rivals - the latest in a series of bold manoeuvres by its CEO Charles Allen. His formidable reputation as a negotiator is as someone who

HOW TO CLOSE THAT DEAL: Granada is splitting its media and catering interests as a prelude to a bid for one of its TV rivals - the latest in a series of bold manoeuvres by its CEO Charles Allen. His formidable reputation as a negotiator is as someone who

by JIM WHITE
Last Updated: 31 Aug 2010

The mobile phone salesman probably had no idea with whom he was dealing. Walking into his shop came a rather diffident Scotsman, expensively dressed, certainly, but wholly unostentatious. And so, perhaps sensing an easy commission killing, the salesman set out on his sales patter, hoping to induce his new customer to part with more than was strictly necessary for a mobile telephone contract involving free minutes and call-back, business preferential rates and prepaid talk vouchers. Little did he realise that the Scotsman in question was Charles Allen, chief executive of the Granada Group, a man whom business rivals would never describe as an easy touch. Renowned in the corporate world as the most tenacious of boardroom wheelers and dealers, Allen engineered the audacious takeovers of London Weekend Television, Yorkshire TV and the Forte group. This was the salesman's worst nightmare: a customer who knew significantly more about how to close that deal than he ever would.

'The thing was, I knew exactly which mobile I wanted,' remembers Allen of his brief acquaintance with a salesman who stuck rigidly to a pre-arranged script. 'I should have been the easiest of sales. But he just wouldn't let me have it, he was determined to play his silly game to get me to buy a more expensive phone I just didn't need. It was incredibly frustrating.'

Sitting in Granada's corporate headquarters in a regency house overlooking Green Park, his office the size of a small country, his walls decorated with a collection of modern art so understated it must be worth a fortune, Charles Allen does not look like a man who has to worry where his next mobile phone is coming from. Yet his encounter with the shop salesman had clearly rankled. Here was an allegedly professional business person presented with a cast-iron guaranteed sales opportunity who couldn't see it for what it was. And thus was unable to close the deal. Such is Allen's rigorous affection for the deal that watching someone so casually foul up a barn-door sized opening had offended his business sensibility. It was almost sacrilege.

'Business is a game, like football, a game you play to win,' he says.

'And if you think I'm being unnecessarily flippant, remember I'm a Scotsman and you only have to look at our attitude to football to realise games are important to Scottish people.'

The analogy with Scottish football may not, however, be entirely apt.

If only because, ever since Allen teamed up with his partner Gerry Robinson back in the '80s to launch the Compass catering company - now once more the subject of their attentions - into the stratosphere, they have won significantly more encounters than they have lost. Unlike the Scottish football team. Massive hostile takeovers of Forte and LWT, plus the more friendly acquisition of Yorkshire Tyne Tees and parts of Liverpool FC, have made Granada the most significant of players among modern British media groups, constantly outstripping its rivals. And to think the pair were snootily dismissed as 'jumped-up caterers' when they first reversed their Compass operation into Granada in 1991.

In their rise and rise, Allen and Robinson have been widely characterised as the classic business double act. Robinson, the gregarious Irishman, is seen as the broad-brush ideas man, the winer, diner and presser of flesh, who charms his way through business life. Meanwhile, Allen, the more introverted Scot, is the merchant of detail, the pinpoint strategist, the lynx-eyed finisher who brings the vision into reality.

'Once Charles thinks something can be done,' is Gerry Robinson's analysis of his other business half, 'he is entirely unreasonable about it. He won't let anything stand in his way.'

Since detail is alleged to be his middle name, Allen is, therefore, the ideal man to tell the readers of Management Today precisely how Granada has done it; how he and they close the deal.

It isn't done by relying on good fortune, it soon becomes clear. Meticulous planning goes into every deal: nothing Allen engages in is left to chance.

Thus the first thing that needs to be pointed out is the seating arrangements for this interview. I am placed in one expansive leather sofa in an outlying region of his office, Allen's corporate public relations man is placed in the other to referee fair play, and the chief executive himself sits between us, hovering over the catering arrangements of tea and biscuits, on a swivel chair the better to take in the general panorama of the scene.

Carefully plotted out in advance, presumably.

'I'm not entirely sure if I shouldn't be sitting where you are, if I'm to follow exactly what it says in the dealmaking manuals,' he smiles.

'You know, point four: 'At this stage in the negotiations you should be mirroring your opposite number's body language'.'

At which point he crosses his legs, slouches and generally affects a pretty good impression of a visiting journalist.

'No,' he adds, 'the seating arrangements are not vital. The trouble with reading manuals about business body language and that sort of thing, at this level everyone is too sophisticated: they've all read the same bloody book. I think rather than a sort of pre-ordained procedure, much more important in negotiating is a basic understanding and trust. You have to be yourself, because otherwise you look uncomfortable and people see straight through it. I think the biggest rule in our 10-point plan for closing a deal must be that there is no 10-point rule for closing a deal. It doesn't matter how many books you've read, nothing will prepare you for the real thing.'

Intriguingly, I notice there is little preamble in Allen's dealings.

American management consultants tell us that 95% of negotiating is done in 10% of the meeting time; the rest is jockeying for position. Yet his technique seems to be, without being remotely rude, to dispense with peripherals and get swiftly to the point.

'You know what they say about consultants, don't you?' he says. 'They know all the moves in the Kama Sutra but don't know any women. Every deal is different. Some people like the foreplay, some people like to cut to the chase. I discovered when I worked in the Middle East that if you moved too quickly there, they didn't feel they got a good deal. They like to take their time. And I think one vital rule in closing a deal is that everyone has to feel they got a good deal.'

But, all other things being equal, would he say he likes to skip the hors d'oeuvre and head straight for the main course?

'Personally, I feel once the momentum has developed over a deal, it is better to move speedily, yes. Whether it's pounds 20,000 or pounds 20 billion, I like to move quickly into what I call the killing ground.'

Killing ground: now there's an evocative phrase. But to get there, Allen believes God is in the detail. Unlike many corporations of its size, Granada does not run a big acquisitions division, coming up with dozens of potential deals, many of which can never be realised. Allen prefers the more targeted approach, homing in on just one or two serious possibilities. And then researching them into the ground.

'When you embark on a hostile takeover,' he says, 'what you are basically selling to shareholders is the idea that you can run the company and thus safeguard their investment better than the existing management. To do that you have to know the company better than the existing management.

And to do that you have to do your homework. When we moved for Forte we literally sent teams of people round every hotel, every Little Chef, we worked out precisely how we could re-engineer every menu to increase profit yields. It's amazing how much you learn when you physically test a product.'

Once the homework is done, Allen believes a dealmaker should move with conviction.

'I tell people I have a PVC fetish,' he says. 'It is a little acronym standing for Passion, Vision and Commitment. It drives every decision.

Shareholders are interested in shareholder value. They will enter a negotiation thinking solely whether this deal is good for them. You have to convince them you are serious, committed and likely to deliver that for them.'

In other words, in any negotiation, the other side needs to know what is in it for them.

'Absolutely. So, the most important thing is to listen rather than to talk. Most people don't really tell you what they want. They say personal issues are not important. But they are. If a negotiation is stalling it may be because the person on the other side wants to be chairman of the company but won't tell you. You must remember the question everyone wants answered is: What does it mean to me? So don't be coy, be candid. We have a culture of openness in our business which we carry into negotiations: no surprises, no bullshit.'

The personal angle is one of the reasons Allen finds hostile takeovers more straightforward than friendly mergers.

'Once you've agreed the outline deal in a friendly, then you move on to the positional power games,' he says. 'With a hostile takeover you are usually at arms' length and when the deal is done it's a simple case of saying to the existing management 'goodbye'.'

So: preparation is vital, as is listening, as is understanding your rivals.

But what about the more aggressive elements of closing a deal, the hand-to-hand combat issues? Is Allen an expert in reading a rival's fear? Is it a case of once the sweat begins to appear on their upper lip he knows he has won?

'The right deal is achieved when there is something in it for everyone,' he says, dismissing the idea that victory can only be achieved through humiliation. 'There is no point exercising some macho insistence on squeezing your rivals dry. Most people go into discussions with a dozen points, of which maybe three are absolutely non-negotiable. The trick is to work out what your rivals' are and to stick to your own. And never, ever overpay.

Walk away from a deal rather than be drawn into paying over the odds.'

Which must be easier said than done. After all the work that has gone into preparing for a deal (Granada executives were researching Forte for a year before Allen and Robinson officially pounced) the emotional investment is surely enormous. The temptation must be to hold out for the prize no matter what the cost.

'And you must resist it,' he says. 'Walking away from a deal is the best weapon you have. You must be prepared to do it and your rivals must know you are prepared to do it. If you walk away, yes you might suffer from a bad press for a couple of days portraying you as a failure, but that is nothing compared to the damage you will bring to your company by paying over the odds.'

Allen adds, incidentally, that he is 'hopeless' at behaving like this in his private dealings.

'I am constantly paying over the odds for something because I have become emotionally attached. Like my house; I have no idea whether I got a good deal on that or not. But in business, you must never regard the deal as a trophy.'

While accepting that emotion might be damaging, surely it would be inhuman not to be excited, however, as the deal nears its conclusion, as all the pieces fall into place and the momentum becomes inevitable. Did Allen not feel the adrenaline rush of the hunter as he closed in on the stricken beast that was the old Forte group? Is the actual moment when he realised the prize was his not etched on his memory? After all, it was he who talked about the killing ground.

'Of course I get a great buzz out of business. When you're winning it's great,' he says. 'I remember my favourite deal was at Compass when we won the contract to cater for BT. It was the biggest catering contract in Britain, and when we went to initial meetings, BT said that there were five criteria that a successful bidder must meet. And at the time we fulfilled none of them. And that moment came to mind as we completed the deal: we had won against the odds, but I always knew we could deliver. Part of the pleasure of securing a deal is knowing that it is do-able. It is, after all, only the start.'

And ultimately, Charles Allen believes, confidence - in yourself, in your team, in the validity of your case - is the dealmaker's greatest weapon.

'I think as I have gained more experience, I have become very, very instinctive in the way I act,' he says. 'This is the biggest lesson I've learned: the longer I am in business, the more confidence I have in following my gut feeling.'

But what of his most recent negotiations in the mobile phone shop? What did his gut feeling tell him there? Did he finally convince the salesman to provide him with the machine he wanted?

'Nah,' he says, clearly still offended by the memory. 'I got so frustrated I walked out of the shop.'

Which is what you call the ultimate hands-free mobile.

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