Columbus dealmakers tell what it takes to reach agreements that shape the region.
Ready for some bare-knuckles, brass-tacks advice from a few of Columbus' top dealmakers?
Be nice. Make friends. Do unto others as you would have them do unto you.
If the vaunted Columbus Way sounds more like All I Really Need to Know I Learned in Kindergarten than The Art of the Deal, well, that just seems to be the way we roll around here.
“New York is a lot more adversarial. Silicon Valley pretends not to be adversarial—they kind of wrap it around, you know, ‘we're kicked back Californians'—but it's pretty adversarial, too,” says Mark Kvamme, a California native and Silicon Valley venture capitalist who came to dealmaking in Ohio by way of invitation from Gov. John Kasich.
“Here there's a lot more empathy for a win-win situation.”
Some say it's an Ohio thing. Some say it's the entire Midwest. But Alex Shumate, the longtime Ohio State University trustee and attorney whose corporate clients are scattered across this region of the country, thinks it's more localized than that. People here come to the negotiating table looking for mutual benefit, he says.
But surely everyone can't play by Columbus' golden rules, right?
“There have been a couple outliers, but we figure them out pretty quickly,” says Jack Kessler, cofounder and chairman of the New Albany Company. “They catch on. Our way's easier. That's what's nice about it. What's wrong with being nice?”
It's About Relationships
Jane Grote Abell
Helped negotiate the sale of her family's pizza chain to McDonald's in 1999 for a reported $150 million and was the catalyst behind a repurchase of the company for what Forbes said was one-third that amount in 2003.
The art of the deal to Jane Grote Abell is the “heart of the deal.”
“It's about building relationships that will last a long time,” says the chairwoman of Donatos, who has accomplished a rare feat in business. She and her father, Jim Grote, who founded the Columbus-based pizza chain in 1963, negotiated both the sale and the repurchase of the family business within a span of four years.
The Grotes sold Donatos to McDonald's in 1999. They bought it back in late 2003. After a push to diversify its holdings, the fast-food chain was rethinking its strategy. Abell learned that McDonald's planned to either sell Donatos or shut it down.
Before going into how her family put together a deal McDonald's would accept, Abell describes a four-year interim that illustrates why McDonald's accepted.
“Our relationship with McDonald's allowed us to buy the company back,” she says.
But they also prepared. Abell offers four observations from the deals.
First visualize the desired outcome, she says. As negotiations continue, put yourself in the other party's shoes and think about whether you're offering a deal that you would accept.
When it comes to the details, she says, surround yourself with experts. Abell brought back Donatos' former chief financial officer and put together a team of lawyers, financial advisers, real estate specialists and others who helped her family remain objective about the deal.
But finally, Abell says, you have to seize the moment. Due diligence is obvious, so assuming that's all in place, be ready to act when the time is right.
“Deals can go stale,” she says. “You can't let it drag on too long, either.”
Although Donatos operates 157 restaurants, Abell and her father were up against the world's biggest restaurant corporation in McDonald's. The global giant has operations in 119 countries and revenue of $25 billion.
“I wasn't intimidated at all,” she says. “When you're so passionate about something and you can visualize the outcome, it's not intimidating. I knew it was the right thing to do.”
It's About Vision
As mayor of Columbus from 2000 to 2016, secured $7 billion in private investment, 45,000 new jobs and initiated redevelopment efforts Downtown, on the Near East Side, in Franklinton and the Hilltop, in Weinland Park and the University District, along Morse Road in Northland, and along Parsons Avenue and other areas of the South Side.
The Lincoln Theatre, once an ornate and active hub for black residents of a segregated Columbus, had been boarded up since the 1970s and stood nearly gutted since an aborted renovation effort in the 1990s.
But it still stood, and Michael Coleman saw its rebirth as key to revitalizing the Near East Side.
Lesson No. 1 in getting a deal done, the former mayor says: You have to have a vision. And Lesson No. 1.5: You need to get others to see it, too.
“I start out with the vision. ‘Here's the vision. Can you buy into this vision?' ” says Coleman, who served as mayor from 2000 to 2016. “You can't get to the end if you don't know what the end is.”
Coleman made, brokered and signed off on countless deals during his years in office. He left City Hall as the longest-tenured mayor in Columbus history, and “there wasn't much I wasn't involved in.”
There were buildings and bridges. Businesses came to town or were persuaded not to leave. Columbus and nine other local governments reached agreement to protect the environmentally sensitive Big Darby Creek in western Franklin County. There were development and redevelopment projects Downtown, in Northland, on the South Side and in Franklinton.
The Lincoln Theatre was special for the city's first black mayor, not just because of its place in history, but also because of its potential place in the future of the Near East Side.
Coleman convinced Franklin County commissioners to contribute $4 million to the renovation, and the city spent
$6 million. He also secured more than a dozen corporate donors, from Bob Evans Farms to Honda, to chip in as well.
The theater reopened in May 2009 with a week of performances by dancer Maurice Hines, opera singer Denyce Graves, blues vocalist Bobby “Blue” Bland and the Harlem Gospel Choir.
After getting others to buy in, Coleman says, you start talking specifics.
“Everyone has to give a little. Everyone has to take a little,” Coleman says. Whether it was funding, staff, sweat equity or political capital, he adds, “I always put skin in the game.”
And while he advises keeping your eyes on the prize, he doesn't advise keeping score along the way.
“It's not a basketball game or a football game,” Coleman says. “You're not adversaries. Adversaries rarely make deals.”
It's About Compromise
Led the creation of Columbus 2020, an 11-county regional economic development agency that has a goal of attracting $8 billion in capital investment, creating 150,000 new jobs and raising personal per capita income by 30 percent by the end of the decade.
“I'm never afraid to use the word ‘win,'” says Alex Fischer, whose elite group of about 50 local business executives weighs in on regional economic issues.
It's just that Fischer, whose favorite class at Harvard Law School was called “Getting to Yes,” doesn't exactly define “win” as a one-person verb.
“I think when you win, both parties need to be meeting their objectives,” he says. “Put yourself in the other's shoes. Help the other party win, too. Know what's important to them.”
Getting to Yes is also the title of a book that expounds on the notion of principled negotiation, a concept in which both parties seek mutual gains wherever possible and resolve their conflicts based on fair standards instead of a contest of wills. First published in 1981, it has sold 12 million copies, been published in 34 languages and calls itself the world's best-selling book on negotiation.
“I think one of the downsides of negotiations is when you view it as a competition,” Fischer says.
Fischer says the best negotiators have high EQs, or emotional intelligence: empathy, self-awareness, the ability to manage their emotions, motivation and people skills.
Staying calm never hurts, either.
As an executive for Battelle from 2002 to 2009, Fischer worked with Chinese officials for more than a year laying the foundation for a new venture. He went to China to finish things up on a deal that was hundreds of pages long.
“It looked like we were wrapping things up, and on the other side of the table was the biggest eruption of emotions,” he recalls.
A Chinese-American cultural adviser told him to stay calm and not react, even as the Chinese stormed out in grand fashion.
You never know what little thing might happen that causes a deal to go sideways, Fischer says. In this case, Fischer literally never knew.
As inexplicably as the group stormed out, its members eventually returned.
“Their lead guy reached his hand across the table and said, ‘We have a deal.'”
It's About Fit
Shepherded more than 75 hospital mergers, corporate affiliations and creations of local networks in 40 years as a healthcare lawyer.
How many mergers of Ohio hospitals and health systems has Mike Gire been involved in? He's not bragging when he says “virtually all of them.”
In 1977, Gire became the first lawyer at Bricker & Eckler to specialize in healthcare. He was part of the Riverside Methodist Hospital's creation of U.S. Health—now OhioHealth—in 1984. He helped bring Grant Medical Center and Doctors Hospital into the system, as well as Grady Memorial Hospital in Delaware, Hardin Memorial Hospital in Kenton, and hospitals in Marion, Mansfield and Athens.
“I view my role more as a border collie than a pit bull,” he says. “Everyone is trying to accomplish a common purpose. It's, ‘How do we get there?'”
Gire insists that money isn't the biggest driver of deals in the healthcare industry, but that doesn't mean the issues are all easy to work through. Cultures and missions vary among secular, religious and academic institutions. Faith-based providers must adhere to religious teachings on everything from raffles to reproductive services. Especially in smaller towns, hospitals arouse strong feelings.
“I've seen about everything I think that can happen,” says Gire, including physical altercation. After a town meeting once in Marion, Gire had heard enough from a local doctor who opposed a deal among local hospitals. He's happy to debate the issues and address people's concerns, he says, but the discussion that night had moved beyond productive. Gire began walking away when the doctor grabbed his tie and jerked him back. The next day, a colleague sent him an assortment of clip-on ties for future public forums.
The deal Gire recalls most fondly wasn't his biggest. In 1995, he helped hash out what he looks back on as a “fabulously successful” agreement between the Ohio State University Medical Center and Grant to create MedFlight, a medical transport provider that ended a costly duplication of services in central Ohio.
And then there's what Gire calls a “trainwreck” of a deal that shows what happens when cultures collide.
In 1994, five Cincinnati hospitals and health systems—Christ Hospital, University Hospital, Jewish Hospital, Fort Hamilton Hospital and St. Luke Hospital—came together to form what they called the Health Alliance.
“They came together, but I don't think they ever had a communal vision,” Gire says. “That one blew apart, ended up in all kinds of litigation. It took several years to unravel it.”
It's About Integrity
Partnered with L Brands founder and Chairman Les Wexner to turn New Albany from a sleepy village of about 400 residents into a suburban city of almost 10,000 with one of the highest per-capita incomes in Ohio.
One-half of the partnership that put New Albany on the map—literally—doesn't use the word “deal” to describe the machinations that reinvented the suburb in the late 1980s.
“It was a secret,” Jack Kessler says about the early development plan, a 50-50 partnership with Les Wexner that grew out of the L Brands founder's desire to build a place out in the country. They'd drive around in Wexner's Range Rover on Sundays scouting potential locations. Gahanna was an early possibility.
“Les called me up one day and said, ‘You know, Gahanna is really a nice community, but we can't change it. New Albany has no image. We can make it what we want it to be.”
They began using a number of unconnected real estate brokers to buy land in and around New Albany, then a village of just about 400 residents best known as an outside-the-Outerbelt speed trap.
On a now-framed and faded 1980s Franklin County roadmap, the grand plan unfolded. Wexner used a red pencil to draw boundaries for Easton Town Center, the retail development he would announce in 1996 and open in 1999. And near the not-yet-built Easton, he shaded in an even bigger area where New Albany would take its future shape.
Kessler and Wexner were secretive, Kessler says, but they weren't sneaky. They offered a premium over the appraised value of each parcel they bought anonymously. They offered cash, a quick closing and demanded no contingencies.
They operated, Kessler says, the way he thinks all deals should go down.
“We did it with dignity. We were honest and fair. But we had a lot of fun doing it.”
Kessler's definition of a good deal is one that's fair to everyone involved. And he operates by a strict code: Your word is your bond. You don't get ahead by stepping on others. You were here yesterday, you're here today, and you'll be here tomorrow; so you better behave.
He speaks well of competitors in the real-estate development world and has given the same advice often to Columbnus newcomers: Don't badmouth others in town, because the person you're talking to is probably either related to—or friends with—the person you're talking about.
“We all know each other. We're friendly with each other. We're competitors, but it's a nice competition,” he says. “If I say something to Ron Pizzuti or Don Casto, they accept it. That's unusual. That's certainly not done in Donald's Trump's world.”
He laughs and offers what might be another good piece of advice. “But keep politics out of it, right?”
It's About Communication
Founded digital marketing pioneer Resource Interactive in 1981 and landed Apple as her first client. She sold Resource/Ammirati—a 300-person company with offices in Columbus, New York and Chicago—to IBM in 2016.
Nancy Kramer has nothing against lawyers. When she was seeking a buyer for Resource/Ammirati, she knew they were looking out for her.
But occasionally throughout the process, as different issues arose that had the potential to hamper a deal, she realized that she and her counterparts on the other side of the discussion weren't discussing matters directly.
On one such occasion, Kramer and officials from IBM, which bought her firm in January 2016, were hung up on what she refers to as a misunderstanding. She needed IBM to understand the issue because it was important to her business and its clients. Eventually, she came up with a metaphor that helped everyone see things clearly.
Kramer's conclusion: “I think there's a place for lawyers. You need that as part of the process. But there are different times that I think it's best for the two parties to talk directly as opposed to talking through lawyers.”
Not that Kramer went rogue. Global business consultants, advertising holding companies and a private equity firm competed with IBM in pursuit of her company. She worked with a New York investment banker. Among the items on her scorecard for potential partnerships were a worldwide presence that would offer good opportunities for her employees and access to cutting-edge technology that would benefit her clients.
When she decided she needed to do the talking, Kramer says, she role-played the discussion with her team.
“I wasn't going in as a loose cannon to blow up anything,” she says. “It was just, what's the right dynamic in this particular point in the process?”
In IBM, Kramer found the global and technological reach she was looking for. The century-old technology company has shed much of its hardware business and now focuses overwhelmingly on services. It also expressed the commitment she sought to Columbus-based operations.
“There were people who offered us more money. I felt as though it was the right culture fit,” she says. “To this day they say, ‘We want to become more like you. We don't want you to become more like us.'”
It's About Timing
Hammered out more than 1,000 concert deals in more than 17 years as head of Columbus-based theater manager CAPA and earlier as manager of northeastern Ohio's Blossom Music Center.
Doug Kridler, president and CEO of the Columbus Foundation, chuckles at the idea of win-win dealmaking, because he has encountered a few people who were more than willing to do unto others whatever it takes.
Before the opening of Nationwide Arena in 2000, as the head of CAPA, Kridler wanted badly to put together the deal to bring in its much-anticipated opening-night act. He had the chops to do it, too. He counts about 1,000 concert deals—with everyone from Bob Dylan to Alicia Keys—on his resume.
“This was about the need to act fast and seize your opportunity,” Kridler recalls.
Country music stars Faith Hill and Tim McGraw were launching a nationwide tour in 2000, their first as a married couple. Kridler was negotiating for the tour's only two-night booking when he got wind that rival SFX Entertainment, a Los Angeles-based concert promoter, offered four shows in New York that would have squeezed out the Columbus booking. SFX owned 120 venues at the time and was producing 7,000 concerts a year.
He booked a flight to Nashville, where he offered $1 million to lock in Hill and McGraw for Columbus.
“You have to move quickly. You have to move decisively. You have to ring the bell,” Kridler says. “The idea of a million-dollar offer, I knew it had to ring the bell.”
The next afternoon, the agent for Hill and McGraw called back. SFX threatened to back out of every deal it had with the performers if the company didn't get a cut of the Columbus deal. “For the next 45 minutes, it was all-out battle. These guys were big and powerful.”
But 24 hours later, all was settled. Kridler offered a bigger piece of the booking to the singers, and their agency offered a cut to SFX. Kridler scored points with the manager for Hill and McGraw, who also represented other performers. The agency saved face with SFX, and SFX never knew it was Kridler who made the offer.
So no, the Columbus Way isn't everyone else's way.
“In the entertainment business—whoa,” Kridler says. “You've not met a good negotiator until you've spent time with people from Hollywood and Broadway.”
It's About Going for It
Invested early in YouTube, LinkedIn and other tech companies and started Funny or Die after his son came up with the idea. He moved to Ohio to head Gov. John Kasich's economic development efforts and now is a partner in Drive Capital, which he cofounded to invest in Midwest startups.
We're not just nicer and more empathetic in Ohio, according to Mark Kvamme, whose dealmaking as a venture capitalist was focused on the US coasts until he decided to call Columbus home.
He says we're also a lot more honest.
“There's more, for lack of a better term, ‘factual honesty,'” he says before explaining the concept to a native Ohioan who didn't know there was any other kind. In the East, Kvamme says, people deliberately hide potentially troublesome details during negotiations. In the West, he adds, they might not hide information, but they don't volunteer it, either.
“In California, they'll say, ‘You didn't tell me about this.' ‘Well, you didn't ask the question,'” Kvamme says before adding the disclaimer about painting with too broad a brush. “After a deal in New York, they'll say, ‘You didn't tell me about that.' ‘Of course I wouldn't tell you about that. That'd mean the deal would be worse for me.' ”
Since the California native transplanted his life and career to Ohio, he has noticed a tendency among entrepreneurs in these parts to volunteer, well, just about everything. They don't want the other party to get into something that might not be successful for them, he speculates.
He considers it a good quality. But the straightforwardness, coupled with what he calls “the nonpromotional nature” of Ohio entrepreneurs and dealmakers, leaves money on the table in many cases. It's about 10 percent of a deal, he says, although he calls that amount “on the margins.”
Dealmaking is in Kvamme's blood—and in his history. His father founded National Semiconductor and was an executive at Apple. At home, he set prices for his children's chores; those that were least popular paid the most.
“I had to sit down and negotiate with my brothers on what I was going to do and how much I was going to get paid, and we'd trade and we'd barter and all kinds of stuff,” Kvamme says.
He sees dealmakers maturing here, in part because of the $1.1 billion sale of health-technology company CoverMyMeds to drug wholesaler McKesson. Ohio was abuzz over much smaller deals in the past, he says.
“That's the great thing about CoverMyMeds,” Kvamme says. “They could have sold that company; they had offers at $100 or $150 million, whatever the number was. When they got the (investment) money from Francisco Partners, tens of millions of dollars, they were able to step on the gas and really blow the thing out to where McKesson could come in and offer them this massive price.”
“You start seeing that sort of momentum in the area, that's going to be very advantageous for entrepreneurs to lean forward and not sell too quickly. … You have this much bigger mentality on the West Coast that we're going for it, we're going to change the world.”
It's About Trust
Has taken part in searches for four Ohio State University presidents—and led the search committees for two—while serving as an OSU trustee for 20 of the last 28 years.
On the 20th floor of the Huntington Center, deals get done in one of four conference rooms at the Columbus office of Squire Patton Boggs. There's a room—with an appropriately long table to match—that seats 40. There's another room for 20 and a room for 10.
“You and I are sitting in the four,” Alex Shumate says from his seat at a small, round table that seems built for coffee breaks rather than business deals.
Shumate is the managing partner in Columbus and advises corporate clients throughout the Midwest on regulatory and legislative matters. He has been on boards of directors for, among other companies, Smucker's, Wrigley and The Limited, but he's best known here at home as one of the longest-serving trustees at Ohio State University. He has been on the board for 20 of the last 28 years and has taken part in the search for four of the last five OSU presidents.
His observation from decades of dealmaking: They come together easily when people sit down seeking mutual benefit. “You have to be focused on the notion that you're a dealmaker,” Shumate says. “There are dealbreakers and dealmakers. I fashion myself a dealmaker.”
No matter which conference room gets used at Squire Patton Boggs, Shumate says there are always a lot more people involved who aren't at the table. They're doing prep work, research, analysis and other tasks. Still, he adds: “You can have too many lawyers and accountants in the room.”
Shumate calls dealmaking more of an art than a science. “There are people who have that X-factor who are good at making deals,” he says. “Trust is a key component. You've got to trust me if there's going to be a deal.”
His lesson from OSU presidential searches is to set a goal and go for it. Trustees haven't waited for resumes and cover letters when hiring new leaders at Ohio State, he says.
“We identify who we want and we go after them,” he says. “In today's world, the person you want is very successful and happy where they are. … You know what you want, I know what I want, and you come to this place that's a meeting of the minds.”
Bob Vitale is associate editor.