Mega Deal Secrets: How to Find and Close the Biggest Deal of Your Career

To that Unknowable Essence that some call God, Whose servant I strive to be.

To Didar, Silas, and Nuria, my family who make life worth living.

To my parents, Kathy and Dan, who pointed me in the right direction.

Contents

Introduction

The Impossible Deal

Chapter 1

The Mega Deal Premise

Chapter 2

The First Executive Meeting

Chapter 3

The Proof of Concept Study

Chapter 4

The Second Executive Meeting

Chapter 5

Building Stakeholder Buy-In

Chapter 6

The Final Showdown with Procurement

Epilogue

Life as a Mega Dealer

Acknowledgments

Copyright

Introduction

The Impossible Deal

A Mega Deal is a business transaction with the potential to change the fortunes of a company and impact the lives of many people. It’s the kind of deal Robert Iger had in mind when he stepped into the conference room for his first board meeting as CEO of the Walt Disney Company in September 2005. The company was in a tailspin after fending off a hostile takeover attempt from Comcast, removing longtime CEO Michael Eisner from his post by force, and receiving harsh public criticism from Roy Disney, who referred to the selection process that put Iger into the executive role as a sham.

It was a cool California evening, and anticipation hung in the air as Iger took his place for the first time at the head of the long conference table and faced down the ten men and women who made up Disney’s board of directors—a few of whom had opposed his appointment to the bitter end.

Generally, a CEO’s first board meeting isn’t the time to propose a radical and risky new deal. In this situation Iger was supposed to give a rah-rah-go-get-’em motivational speech, show some financial projection graphs with lines trending sharply upward in the near future, and finish off with a bit of we’re-all-in-this-together corporate talk. Then he was supposed to end the meeting early and spend the rest of the evening shaking hands, smiling, exchanging pleasantries, and trying to inspire confidence that he had everything under control.

Except Bob Iger had something very different in mind.

As you all know, he said, jumping right into it, Disney Animation is a real mess. He described a scene he’d witnessed a few weeks earlier, when he’d flown to China for the opening of Hong Kong Disneyland. As part of the opening ceremonies, the park put on a massive parade, and Iger watched as a long series of floats marched down Main Street. First came characters from all of Disney’s most iconic films, like Snow White and the Seven Dwarfs, Cinderella, and Peter Pan. Then there were some big characters from Disney’s hits of the 1980s and early ’90s, like The Little Mermaid, Beauty and the Beast, Aladdin, and The Lion King. Finally, there were more recent characters from the films they had done with Pixar: Toy Story, Finding Nemo, and Monsters, Inc.

Do you guys notice anything about this parade? Bob asked the board members. They shook their heads. Nothing stood out to them about the floats. There are barely any Disney characters from the last ten years, Iger concluded.

By pointing out this detail, Bob must have quietly set off silent explosions in the heads of all the board members. There was instant recognition of a massive problem. And a sense of dread and threat that can make the most powerful businesspeople squirm in their seats. Thoughts like How could we have missed that? were likely zipping around their neural networks, kicking off hits of adrenaline, preparing fight-or-flight responses.

This was a masterful display of revealing an insight, a major theme of this book and a skill every seller intent on closing Mega Deals needs in her toolbox.

He then displayed a list of recent Disney films: The Hunchback of Notre Dame, Hercules, Mulan, Tarzan, Fantasia 2000, The Emperor’s New Groove, Atlantis, Lilo & Stitch, Treasure Planet, Brother Bear, and Home on the Range. Some received mild box office success, but none were hailed by critics. Worse, Disney had spent over a billion dollars making and marketing these films, yet their animation department had lost nearly $400 million during the previous ten years. The board knew things were bad, but the numbers had never been presented to them in black and white like this.

Then Iger flipped to the next slide, which displayed market research he’d been conducting. Disney’s prime demographic is mothers with children under the age of twelve, so Iger had surveyed a large group of these moms from across the country and asked them to rate which movie studio produced films that were good for their family. The results were clear. Pixar was beating Disney. Mothers loved Pixar films, while they viewed Disney as over the hill and irrelevant.

This can’t be about the past, Iger said, sensing tempers starting to rise in the room. He didn’t want to point fingers or cast blame, he wanted to move forward. There’s nothing we can do about the bad creative decisions that were made and disappointing films that were released. But there’s a lot we can do to change the future, and we need to start now.

Then Iger used a phrase he would return to repeatedly during the coming months.

As Disney Animation goes, so goes the company, he said. I feel enormous pressure to figure this out. The drum is already beating for me to solve this problem.

Iger was laying down the gauntlet, raising the stakes around the importance of fixing Disney’s animated-film problem and casting it as his number one issue to address to lead the entire company forward. In so doing, he made it a Core Imperative—the highest priority of the senior management team to be addressed immediately during the current fiscal year.

He explained that he saw three possible ways to proceed. First, they could keep the current team in place, but this didn’t seem likely to work. Second, they could try to bring in new blood, but he’d been searching for six months and had been unable to find the right people.

Or, he said, we could buy Pixar.

The room erupted into chaos at this suggestion. Everyone was suddenly talking over each other. Pixar was valued at $6 billion, someone pointed out. Steve Jobs personally owned half the company’s stock, said someone else, and there’s no way he would ever sell to Disney. The financials would never work out, came a third voice.

Some board members were firmly against the idea of buying Pixar, but enough were intrigued that Iger was given tentative approval to talk to Steve Jobs and Pixar’s leaders, John Lasseter and Ed Catmull, about whether they might consider selling.

The next day, Iger got Jobs on the phone and asked if he could visit in a few days to discuss a crazy idea. The two men had gotten to know each other while negotiating a deal to include Disney content on Apple’s new iPod Video, which was due to be released in a week.

Tell me now, Jobs said. Iger remembered he was talking to a man who loved crazy ideas.

After putting himself on the line in front of the board, Iger was under pressure to come through. Sitting in his car after arriving home on a warm evening, he broke into a sweat as he mustered up the nerve to make his ask. Would Jobs be offended at what he was about to propose?

I’ve been thinking about our respective futures, Iger said. What do you think about the idea of Disney buying Pixar?

For the longest time, Jobs didn’t say anything. Iger winced, ready for him to erupt in anger or laugh at the arrogance of this suggestion. But that’s not what happened.

You know, Jobs said, finally, that’s not the craziest idea in the world.

Two weeks later the men met in Apple’s boardroom to discuss the possibility further. Jobs was pacing up and down in front of the massive twenty-five-foot whiteboard, which took up an entire wall. He wrote pros on one side and cons on the other. Then he started jotting down one con after another:

•Disney’s culture will destroy Pixar.

•Fixing Disney Animation will take too long.

•There’s too much ill will and the healing will take years.

•Wall Street will hate it.

•Your board will never let you do it.

•Pixar will reject Disney as an owner, like a body rejects a donated organ.

•DISTRACTION WILL KILL PIXAR’S CREATIVITY.

The list went on, and soon Jobs had filled an entire side of the whiteboard with cons. Then he threw the marker to Iger, who struggled to come up with pros:

•Disney will be saved by Pixar and we’ll all live happily ever after.

•Your team will have a much larger canvas to paint on.

•Turning Animation around will change the perception of Disney and shift our fortunes.

He couldn’t think of anything else. After two hours of whiteboarding the cons vastly outnumbered the pros, and Iger was feeling dejected.

It was a nice idea, he said meekly, but I don’t see how we do this.

That’s when he learned a huge lesson from one of the most visionary thinkers of all time.

A few solid pros are more powerful than dozens of cons, Jobs said, thoughtful. So what should we do next?

In the months that followed, Iger toured Pixar and met with the company’s leaders, John Lasseter and Ed Catmull, to talk about what an acquisition might look like. Jobs said he wouldn’t consider any offer until both of them agreed. Iger assured the two men that he didn’t want to change anything about the way they worked. The deal would greatly expand their sphere of influence, placing them at the head of Disney Animation in addition to continuing to run Pixar. Their email addresses would remain Pixar. The signs in front of their headquarters would still read Pixar. They could keep all of their traditions and wacky rituals, like the beer blasts they held every month. Lasseter and Catmull liked the idea and gave Steve Jobs the go-ahead to enter talks with Disney about how the deal might work.

When he and his CFO, Tom Staggs, sat down with Jobs to discuss the financials, Bob Iger knew the typical approach would be to play it cool and not let on how badly he wanted this deal. The idea in this type of high-stakes negotiation is generally to avoid giving the other side any extra leverage they can use against you. If Jobs knew how excited Iger was about acquiring Pixar, he might play hardball.

But Iger took a different approach.

I’ll be straight with you, he said, as soon as they sat down. This is something I feel we have to do. Iger’s goal wasn’t to get the best price possible. He just wanted the deal to be fair for both sides. He was convinced the partnership would create a massive amount of value going forward for all involved if they could just arrive at an agreement. Also, he knew Jobs couldn’t ask for anything too outrageous because Disney’s board would never approve it.

Jobs agreed the deal was important. He seemed to appreciate Iger’s honesty.

The number they arrived at was $7.4 billion. It seemed fair to Iger—albeit on the expensive side of fair.

But the deal wasn’t done yet. Iger still had to convince Disney’s board of directors to sign off. He knew there was strong opposition to this deal, and to his appointment as CEO. The acquisition would involve issuing new shares of stock and diluting every current shareholder’s stake in Disney. Steve Jobs would immediately become the largest shareholder and would gain a seat on the board.

The big meeting took place in January 2006 in Los Angeles. Instead of attempting to pitch the deal and convince his skeptical listeners on his own, Iger decided to bring Steve Jobs, John Lasseter, and Ed Catmull along with him to do most of the talking.

What is so interesting in this part of the story is that Bob Iger, the senior-most executive at Disney, brought in specific individuals to engage with and win over his board. Key individuals whose personal brands, market stature, experience, and vision made them exceptionally credible to deliver the intended message. They were each at least peers with the audience of Disney board members, if not singular experts, particularly on the topics they were there to address.

By leveraging Jobs, Lasseter, and Catmull to do the most important part of the pitch, not himself, Bob Iger was practicing the fine art of what I call Executive Whispering—the craft of choreographing interactions between senior executives and experts from your company and your customers. Much more to come on Executive Whispering later in the book.

*    *    *

John Lasseter spoke excitedly about his deep love for Disney, where he’d worked for years before being let go because the company didn’t see a future in computerized animation. He said it would be a dream come true to return and help lead the animation team at Disney. Ed Catmull launched into an enthusiastic and highly technical talk about the future of animation and the amazing things that could be achieved from a technological standpoint with the two companies working together.

Finally, Steve Jobs took the floor. He stepped back to discuss the big picture and explained why he felt Disney had been struggling over the past ten years. He said he knew Pixar could help turn things around. He talked about the need for big companies to be bold, take risks, and pursue crazy ideas. It was a speech only Steve Jobs could pull off. And he nailed it. When he finished, the energy in the room had shifted.

The future of the company is right here, right now, said Iger, addressing the board one final time before they voted on the deal. It’s in your hands.

Then he repeated a line he’d used during his very first board meeting as CEO, back in September. With everything that had happened since then it felt like ages ago.

As Disney Animation goes, Iger said, "so goes the company. It was true in 1937 with Snow White and the Seven Dwarfs, and in 1994 with The Lion King, and it’s no less true right now. When Animation soars, Disney soars. We have to do this. Our path to the future starts right here, tonight."

The deal was approved.

Just as Iger had predicted, the Pixar acquisition was a monumental turning point for the company. Over the coming years, Ratatouille, Wall-E, Up, Toy Story 3, Brave, Inside Out, and Coco would all win Academy Awards for Best Animated Feature Film. The Disney-Pixar partnership created massive value all around and changed the fate of the company, exactly as Iger envisioned it would.

The acquisition of Pixar was a Mega Deal in every sense.

But Iger wasn’t done yet. He went on to negotiate a string of other impressive Mega Deals during the next decade, including the purchase of Lucasfilm and the Star Wars franchise, as well as the acquisition of Marvel Entertainment, which brought a vast collection of beloved comic book characters under the Disney umbrella. All of these Mega Deals proved incredibly profitable, enhanced the Disney brand, and resulted in an avalanche of popular films that were adored by fans and critics alike all over the world.

Behemoth business transactions like those led by Bob Iger are certainly Mega Deals, but so are thousands of large deals that close every year, spearheaded by elite enterprise sellers. In its essence, a Mega Deal is simply an uncommonly large deal that has an outsize impact on all stakeholders who are party to the transaction.

And you don’t have to be the CEO of a Fortune 500 company to close a Mega Deal. Enterprise sellers in any industry or niche can close these kinds of deals when they learn to approach the sales process in a radically different way.

I know this because I lived it. Through trial and error and ultimately through having a couple of great mentors, I learned the craft of closing very large deals. I have been fortunate enough to close over $160 million in software as a service (SaaS) and services revenue in an eight-year stretch of my career as an individual contributor account executive. Most of that revenue came through deals of $50 million and up.

Now I lead a coaching community dedicated to enabling Mega Deal practitioners. Through my work I coach or come into contact with sellers who close extraordinary deals, each with their own amazing story.

Joseph Paranteau, a friend of mine and the author of Billion Dollar Sales Secrets, learned this Mega Deal lesson for himself when his small software company was in the running for a contract to build a new website for American Airlines: aa.com. After months of pitches and requests for proposal (RFPs), he was stuck. The customer told him flat-out they preferred his company for their creativity and design skills, but they worried about security. There was a competing software company that had a much stronger reputation for technical architecture, a critical aspect of the proposed website.

Instead of trying to destroy his competitor, Paranteau took a different approach. Just like Bob Iger, he decided to partner with the other software company and work together on the website. The collaboration was approved and the deal ended up reaching $350 million—more than enough to go around. It was a turning point for his company and allowed his small team to shape the future of airline digital engagement and e-commerce and the way millions of people book air travel.

Anita Absey is another individual who embodies the Mega Deal mindset. In 2018, Absey was brought on as the first Chief Revenue Officer at Voxy, an e-learning company that provides institutions with adaptive instruction in English. She scaled up Voxy’s sales team and spearheaded their international expansion by closing several large partnership agreements.