The Cleveland Browns management have become the laughing stock of the sports world by botching a trade with the Cincinnati Bengals for back-up quarterback AJ McCarron. It seems that the deal was agreed to with 5 minutes left before the trade deadline and the Browns failed to deliver notice to the NFL before the deadline.
Much has been written about the football ramifications of this blunder, about how inept the management of the Browns must be, and even about how a young backup quarterback goes on with his season, knowing he lost his shot to start over a paperwork snafu. But there are lessons to be learned here…and not just for NFL owners.
In commercial real estate, every deal is on the clock. We don’t always have the luxury of knowing the exact deadline as the Browns management did. Sometimes the time runs out on a deal, even on a deal that you thought was done. And the ramifications can be just as severe to your organization as those faced by Cleveland. So here are 5 CRE lessons from the Cleveland Browns:
- Time Kills Deals. It’s that simple. The longer a deal takes, the less likely it is to be completed. The world changes, values change, motivations change, new prospects enter the field and new options become available. Sometimes someone gets a funny feeling that this deal isn’t right. Maybe someone goes to a cocktail party and comes away with a whole new outlook on the deal. You can’t delay your decision – because the decision not to act is a decision in itself. This is not to say that you shouldn’t negotiate, but that it is important to maintain the proper pace to your negotiation and that letting time pass comes with a risk.
- You may not have as much time as you think. Deadlines in real estate mean nothing… and they mean everything. It is very important to be fully committed to the process. A fast response can win a deal, or create momentum in the pace of negotiations. Don’t ever let yourself believe that you hold all of the cards. All of the sudden, a new player comes on the scene and you’ve lost the deal, before the deadline that you thought you knew.
- Never underestimate the other guy’s ability to screw up the deal. The Bengals have to share a little of the blame. They reportedly delivered the signed document just 5 minutes before the deadline. Both sides of a transaction need to be focused on setting the other party up for success. Timely delivery of information and documents build a foundation for success. Anticipate all of the details that can derail your deal and work to address each of them. Regardless of blame, when the deal crashes, both parties are damaged.
- Don’t celebrate until its done. There are reports that the reason that the Browns missed the deadline is that they were too busy high-fiving each other. I have no way of knowing what really went on in Cleveland’s office , but I know there are a lot of real estate deals that go off the rails after the parties agree to terms. There will be plenty of time to celebrate after the ink is dry. Until then, FOCUS.
- When it blows up, have Plan B ready. You are going to lose one. Maybe more than one. Plan ahead. Keep your options alive and never burn a bridge that you may need later. Understand that your Plan B, C & D may not be available as time passes. Additionally, be sure to leave yourself enough time to pursue and execute Plan B. This is just one more reason to move deliberately throughout the process until the very end.
I can’t help but think about the loss in credibility that the Browns’ management team has experienced due to this situation. They have suffered immeasurable damage in the minds of their fans, players, and their peers around the NFL. The Browns will feel the ramifications financially, on the field and potentially in their ability to make future trades. Real estate transactions are not as publicly visible as pro sports trades, but I believe a failed transaction can have similar effects in your organization. Play to win.