“In my view, ‘no’ is just the beginning of the negotiation journey. Questions such as, ‘Why not? What would it require? Under what circumstance would you?’ will open up the possibilities.”
– Violaine Galland
Whether you’ve had to talk down a landlord on a rental price or volley for a higher salary at work, we’ve all had to negotiate at one point or another. Or, at the very least, we know somebody with impressive dealmaking skills. There’s a finesse to negotiation, so much so, in fact, that it could be called an art form.
Professional negotiator Violaine Galland knows what it takes to harness that “X-factor” that makes a great negotiator. “Dealmaking is a mixture of science, art and confidence,” she says.
And Galland would know – negotiating since the age of 20, the Switzerland native ended up selling her New York-based company 10 years after she started it for a substantial profit – a move she says was the biggest negotiation of her life.
“I was unprepared and emotional letting go of my baby, and it almost broke the deal,” she recalls.
Galland went on to work on Wall Street in financial technology for 15 years, becoming an executive who negotiated multi-million dollar deals in a male-dominated industry. It was there that she gained the invaluable deal-making advice she passionately shares today.
“The soft skills of a good negotiator and the side conversations helped me navigate the interest of each stakeholder,” Galland says. “Being firm on commercial terms while pleasant at the table was my winning formula – it differentiated me from others at the table.”
Galland calls this approach having “an iron fist with a velvet glove.”
But you don’t have to negotiate on Wall Street to make good deals. “Every single conversation should be treated, in essence, as a negotiation,” Galland says. “Like, ‘Honey, sushi or Italian tonight? Bali or Barcelona for the holidays?’ No matter what you choose to do in life, you will have to navigate conflict.”
The print industry is facing conflict head-on. That tired question – “Is print dead?” – is enough to make any printer pull out shield and armor. Should print companies give in to digital’s current dominance? Should they be endlessly innovating? Should they be seeking acquisition?
In many cases, print companies aren’t sure. Many began as family businesses and feel emotional about changing or selling the company.
As Galland referenced in the negotiation of her company, having a personal tie made it more difficult to achieve a favorable result during the sale. The same sentiment should be applied to printers looking to take that next step.
Al Reijmer, a partner with acquisitions and merger firm New Direction Partners (NDP), has been in the printing business since he was 12, so he gets it. “I know a lot of printers nationwide, and they are all challenged with many of the same things now because of the effects of the economy in the industry,” he says. “They ask themselves, what’s our strategy now?”
NDP’s primary focus is the print, packaging and label industry, where they represent sellers about 70 percent of the time and strategic buyers for the remaining 30 percent. All of the company’s partners are from the print industry. The company helps printers transition, which could be either selling, acquiring or merging with another company, or finding strategic buyers. Reijmer says growth by acquisition has been “very successful and has helped to provide additional sustainability to the industry.”
Because print professionals are not in the business of dealmaking, they turn to NDP. Founding partner Jim Russell says that one of the biggest challenges in his field is dealing with either “unsophisticated” buyers or sellers – those who are not well-versed in the process of negotiation.
Unfamiliarity with the process can lead to unattainable expectations on either side of the table. If a client has unrealistic expectations of the value of their business, Russell’s team has to be direct with them.
Similarly, fired or let-go employees seek the help of Galland, who endured the same fate when the stock market crashed in 2008 and she was let go from her Wall Street job.
Galland now is Senior Consultant at Scotwork LTD Negotiation, a negotiation training and consultancy group. She also helps individuals and companies on the side with career-related negotiations.
So, what is the key to successful dealmaking? Russell believes it’s understanding the non-negotiable terms of both parties involved, while Galland says you must hold your ground.
“Part of the art of getting a deal done is having empathy and really understanding what the key issues are from both sides of the table,” Russell says. “Generally, we’re always representing one side or the other, usually it’s the seller, but we still have to understand what the key issues are for the buyer and what the dealmakers or deal-breakers are for them.”
“The best advice is to not be defeated by the word ‘no’ countless times,” Galland says. “I have seen people give up on projects, promotions, dreams and career changes because someone told them ‘no.’ We tend to capitulate when we hear this word. Instead, I advise to look beyond the ‘no’ and think, ‘How can I turn this no into a yes or maybe?’”
Galland believes “no” is just the beginning of the negotiation process. Questions such as, “Why not? What would it require? Under what circumstances would you?” will open up the possibilities.
Additionally, Galland agrees with Russell’s point that you must understand the other side’s needs. “I would say that a collaborative attitude while being firm on terms has worked well,” she says. “Also, be generous. Give in order to get. Negotiation is about trading, giving items of low cost to you but high value to the other side, and vice-versa. Think of what the other side values, and trade it for your asks.”
Rolling with the changes
Of course, because of the shifts in the printing industry over the last 10 to 15 years, Russell says the types of deals being made reflect that shift.
There are a couple different types of deals printers looking to sell must consider. One of them is called a “tuck-in,” where a smaller print company gets “tucked” into a bigger one, and many employees typically get lost in the process.
Another focuses on the seller’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which Russell says is a more common way of valuing a successful company. This type of deal has become prevalent again, as the economy and the profitability of printers has improved in recent years.
Additionally, two factors changing the way deals are made in the print industry revolve around the way the buyers and sellers are evolving. Russell says there are many more private equity buyers in the industry, which is good for larger sellers because they have money and are sophisticated buyers.
Russell also says there are fewer and fewer traditional commercial printers that produce only offset print today. “Many have now expanded to wide-format, digital, packaging, fulfillment, and even sign-making companies,” he says. “Many of the traditional commercial printers are transitioning getting into those product lines to help augment the declining print sales.”
But without the right skills or help to do so, print companies looking to sell or merge will have a hard time in negotiations. Galland offers four tips to help guide a successful negotiation:
No. 1 – Prepare
Even if you’re a seasoned negotiator, don’t skip the preparation step. The pressure is so high at the negotiation table that only a well-prepared negotiator can handle the curveballs the other side will throw at you.
No. 2 –Test Your Assumption
It’s easy to skip basic questions and assume the other side’s motives, priorities, interests or constraints. Even when you know the industry inside-out, or know the client well, there is power in testing your assumptions. Good, open-ended questions can help you understand hidden agendas. You may be surprised at their responses.
No. 3 – Power Balance
Even in an industry where we consult and train both procurement and sales teams. It is astonishing to note that, often, both sides feel they have less power. We often underestimate our own power, even worse, we negotiate with ourselves. Silence the little (cruel) voice in your head, because it can unconsciously show in your language and body language.
No. 4 – Information Sharing
Don’t hold your cards too close to your chest. Too many negotiations fall apart because of a lack of disclosure or because people say too much. Think carefully about what you want to share, but don’t automatically stay secretive. Finally, if you have bad news, say it early, say it clearly, and say it calmly. People often avoid difficult conversations because they are unpleasant. Negotiations can get derailed because people are embarrassed to deliver bad news early on.
Finessing negotiations in the modern age of printing and other industries can be difficult if you’re not accustomed to the tricks of the trade. But once you understand some of the core values to making a successful deal, you’ll be able to better navigate all of life’s difficult conversations.
Because whether you want to go to Bali for the holidays, sell your business for a profit or talk somebody down on a car price, you’re going to need a good argument.