As a business intermediary, I am sometimes asked by clients if artificial intelligence (AI) can replace the role an intermediary plays. Good question. I have always embraces technology when it helps transactions run smoother. AI is no exception. AI tools are great at many tasks in the sale of a senior care operation: online research, email communications, summarize complex white papers, and analyze data and presenting it in convenient formats. Selling a senior care operations is complex involves many tools. Some things AI is good at. And some humans are better at. Here are 7 things that AI cannot do or currently are struggling when asked to do:
Negotiate between the parties. Transactions are driven by individuals' interests. Each party holds compelling reasons for what they want. Negotiations involve bargaining power and risk-taking. A human is better suited to balance this competing interests.
Advocate on behalf of a client. AI presents logical recommendations based on data. Advocacy involves understanding the underlying needs of your client and promoting that interest. Strong advocacy is essential in the selling process. While the situations and facts may changes (e.g., additional discoveries during the due diligence process), an intermediary must address this new information from the lens of her client.
Empathy. The sale of a senior care operation is usually not logical. It's emotional. While an AI analysis may determine that a certain sale price is "fair," humans close deal when there is a meeting of the minds. Perhaps the seller is willing to take a lower price because she is burned out. Or, the seller wants a high prices because of substantial investments she recently made in the organization's reputation. While the market may not currently value these items, an empathetic intermediary can gauge price and factor in these intangible issues.
Ethical Judgment. AI currently has no mechanism to distinguish good behavior from bad behavior. A good intermediary can determine if a party is operating in good faith. Clients rely upon their intermediaries to vet the other party on (a) their familiarity with the industry, (b) their ability to close the transaction, and (c) whether the other party is easy to work with.
Troubleshoot Last Minute Issues. Few transactions are smooth. AI has difficulty managing unknown issues and last minute problems. Most last minute issues require negotiation, empathy, and risk balancing. Seasoned intermediaries are good at issue-spotting and offering workable solutions.
Use Soft Skills. AI lacks critical thinking, interpersonal skills, and teamwork. Good intermediaries gather multiple data points, balance the interests of both parties, and recommend options for the parties to consider. Implementing these options sometimes required hand-holding and empathy.
Create Novel Solutions. Few transactions end where they started. As the parties work through the due diligence process, some issues arise that require novel solutions. For example, should the transaction convert from an asset sale to a stock sale because a critical contract would get cancelled if the operation is sold? Should a stock sale convert to an asset sale because during the due diligence process several contingent liabilities may later arise due to previous actions by the seller? A good intermediary will spot issues, alert the parties, and facilitate novel solutions.
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