The beginning of a beautiful relationship: a strategic partnership.
Some time ago, a long-standing client had just landed in the States. We had been working intensively to get ready for a series of meetings between his company — a sophisticated textiles manufacturer — and a multi-billion dollar-international conglomerate. The day before the first meeting, Trendlines' managing director, Todd Dollinger, received an e-mail from the client, who was seeking some last minute advice. Todd recently rediscovered his response to the client. Excerpts of his response are reprinted here.
It's about Relationships
Your most important goal is to build a relationship that can last through the decades or, at least, one decade. You may find yourself under a great deal of pressure from the potential partner or from your own team to make a deal now. A quick deal that does not work for everyone in the long run will not work for you, even in the short run. Follow your instincts and move at your own pace, not at their pace. A critical part of building this relationship is listening and responding respectfully.
It's about Attitude
Attitude — yours and theirs — is everything. See what you can do to make your potential partner feel this is a "win-win" relationship, not just one that allows you to win at their expense. If you appear confrontational or overly guarded, they will be suspicious and concerned.
The Roles You Play
When it's time to argue, let others do it. Be the good guy, the problem solver, the one who "plays nice." Remember, they know you as the decision maker, and this weakens your position in a negotiating session. In negotiations between a decision maker and a non-decision maker, the non-decision maker is more powerful. They can always say that their CEO or board said no to something they agreed to. If you are negotiating, they will look to you for decisions.
Take Note
The potential partner's great industry knowledge is both a strength and a threat. This is one of the reasons that the partnership should operate "at arm's length" from both parties. From day one, make it a point to hire independent, highly knowledgeable, experienced managers. In the same way, the manufacturing contract must be "at arm's length." The partner should have the right to manufacture only if "all other things are equal."
You want your product everywhere. This means that prices must be low enough to create a barrier to market entry for your competitors, but not so low as to prevent you from achieving your profit goals.
The first years of the partnership — before significant sales and before profits — are the years of the greatest strain. You must do all that you can to prepare for this.
Hands across the Ocean
One issue about Americans in negotiations: It is unlikely that they will lie about anything; however, they may choose their words carefully or may not be straightforward or forthcoming in their answers. If you are told something that you don't believe or don't like, ask broad, open questions in a friendly tone. This type of questioning often brings surprising responses. If something is unclear, request clarification. They don't want to lie — their answers will lead you closer to the truth. This is especially important when numbers are discussed. Ask them how they derived their numbers and if they "feel good" about those numbers.
Remember this: Strategic partnerships often fail due to culture clashes (even between two companies from the same country in the same industry).
To Meeting You Go
You are only a few hours from the start of several days worth of meetings. You know they have billions of dollars at their disposal and that you have, well, in a word: less. Their financial resources may be larger than yours and they know the market in a way that it can only be known from many, many years of experience. But you are not unarmed. You have advanced technology, a key product and a remarkable organization. They need you. You need them. This is why you will have a great alliance.
Some time ago, a long-standing client had just landed in the States. We had been working intensively to get ready for a series of meetings between his company — a sophisticated textiles manufacturer — and a multi-billion dollar-international conglomerate. The day before the first meeting, Trendlines' managing director, Todd Dollinger, received an e-mail from the client, who was seeking some last minute advice. Todd recently rediscovered his response to the client. Excerpts of his response are reprinted here.
You are only a few hours from the start of several days worth of meetings. You know they have billions of dollars at their disposal and that you have, well, in a word: less. Their financial resources may be larger than yours and they know the market in a way that it can only be known from many, many years of experience. But you are not unarmed. You have advanced technology, a key product and a remarkable organization. They need you. You need them. This is why you will have a great alliance.