Strategy is what you are NOT doing. Various examples of this statement have been touted by Steve Jobs and many other leaders. The question is, how do you do it? I don’t just mean the act of saying no. I also mean, how do you make the decision that leads up to the rejection of an idea or proposal?
In the business of venture capital, we spend most of our day saying no. There is an art to saying no. You can express empathy and connection with an entrepreneur whilst saying no. A no can sometimes be perceived as arrogance, but I believe that most investors harbour a lot of empathy for the entrepreneurial journey, and the struggles, difficulties, and sleepless nights it entails. This doesn’t mean they are good at saying no. So on an individual level, saying no is as difficult as it can be on company strategy level. Let us look at the individual level first.
Where do people go wrong when they say no?
1. They make an excuse that doesn’t make sense in justifying the no.
2. They feel bad, so the no comes across as crass or aggressive.
3. They feel bad, but the explanation for the no is so long-winded and complicated that the recipient ends up thinking it was actually a yes. In essence, they “undo” the no with their explanation.
4. They don’t say anything, i.e., they go dark. This can be perceived as cowardice or arrogance, or worse, can imply irrelevance.
5. They mean to say no, but end up saying yes.
Some of the points above will make you smile and see how nonsensical some of this is, but I bet many of you have been in most or all of these situations when saying no. The problem is that your emphatic side will want to say yes to most things. Most people do not like conflicts. Most people know how bad the rejection can feel from the recipient’s side. Which can lead to any of the behaviours listed above, and the accompanying unintended consequences.
Another way to get to the no is to think through the consequences of the yes. What is the precedent created by a yes? Will you find yourself in a worse situation due to the yes? My younger son drives me crazy at times — he is so persistent!! When there is something he wants, he just cannot let go. I know that saying yes is, at times, poor pedagogy by a parent, but he manages to wear me down with his insistence. Not always, but sometimes. So, I end up rewarding him with a yes, which leads to a potentially even worse spiral of more insistence. And on it goes from there. If you have a problem with saying no, think of it like going to the dentist. Once it is over, it actually can feel better. It is the act of expressing the rejection to the other party that is hard.
Saying no is also cultural. For example, it can get somewhat complicated for outsiders in Asia. When I worked in Singapore and South East Asia, I was always taught by the more senior people that there are many ways to say no, such as “Yes, however …” or “Yes, but …” or “Yes, let me get back to you ….” We were in the sales part of our organisation and had to treat these situations with a high degree of finesse. We were selling infrastructure contracts worth potentially hundreds of millions of dollars. In Asia, the inherent rejection of the no is generally perceived as a loss of face for the receiving party, thus leading to a strong urge to say yes, but to qualify the yes somehow, such that the recipient can understand from the qualification that it is actually a no. When not managed well, this can get you into a lot of trouble, either because you lose a very large contract, or you end up over committing…there is no easy way out…
So how does the “no” affect your strategy? Imagine that you are a founder who has painstakingly build a decent business, toiling over several years to get it off the ground. Suddenly, a very large, very successful global technology company calls you. One of the FAANGs or one of the BATs. This happened 6 months ago with one of the entrepreneurs I have backed. This was a potentially company-making deal. In his mind, he knew this could be a massive boost to his business. But he also knew that it had some perils in terms of legal requirements. On the one hand, a huge opportunity, on the other, a very large risk. After consulting with the board and thinking hard about it, he turned the request down! I was immensely proud that this founder had the capacity and wherewithal to turn the deal down, mainly due to horrible IP clauses in the contract proposal. But I was also worried that we had let a potentially company-making deal slip away.
Six months later this FAANG came back! They claimed that the IP clauses were not that important and they would like to embark on a collaboration. The excitement in the voice of the founder was irrepressible; he was justifiably very proud and excited at the same time. It was one of those huge learning moments where he saw that you can actually say no. Even to the biggest companies on the planet. How do you decide? In theory, the “what you are NOT doing is your strategy” concept is simple, but in practice it is super hard. You don’t always get a second chance when you say no. Maybe, if you don’t get a second chance, it was the right decision not to engage in the first place. Maybe not. There is no way of knowing. For this founder, I hope that this collaboration will be the beginning of a long and fruitful relationship with the FAANG in question.
In another situation a few years ago, another entrepreneur we had backed spent 9 months contemplating entering China with a service. He painstakingly researched the market, talking with as many people as he could. He visited China 3–4 times. He had the engineers build a product, which they soft-launched in China. They did in-depth market studies. They started creating a user base to understand the particular dynamics of Chinese consumers and distribution in China. After many months of diligent work, he turned around to the board and said, “No” — “No, I am not going to China at this time.” Again, I felt a huge respect for this founder, and told him that I was proud of his decision. To have the courage to do this after so much effort and investment was remarkable. China has not come back to him (surprise, surprise!), but we learned a lot, and one day we may launch a service in China. He went on to concentrate on many other important things, and his no was the right answer at the time.
Lastly, if you needed further encouragement to say no, individually or on a strategy level, you can take heed from the old master, Warren Buffet, who said: “The difference between successful people and very successful people is that very successful people say no to almost everything.”
So go on, say it! Say NO.
