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Essential Factors to Consider Before Pursuing Strategic Alliances with Large Corporations

You must be committed to benchmarking and finding out what the best companies in the globe do in their supply chain before venturing into a Strategic Alliance.  You also must determine if your target organization’s supply chain or purchasing department is involved in strategic planning so that they can get the maximum benefit of understanding what they buy, how they buy it, where they buy, and that they are buying it at better than competitive levels.

Many companies as recently as 5 -10 years ago set goals of purchasing 3% of their annual goods and services budget from  minority-owned businesses, and 2.5% for women-owned businesses. We lately have seen numbers as high as 11-15% for both.  States like California USA have set goals as high as 50% for their public utilities of which large corporations such as AT&T and PG&E are included.

Women-owned business participation in corporate contracting is advancing at a much faster rate than minority participation. Women initially were included in the minority owned business designation as the designation was all inclusive of business underserved in the corporate supply chain.  Some suppliers however felt that they clearly were women-owned businesses but not minority owned.  The addition of women-owned business was thus quickly put forward to address this issue.  It is  common that a company can be both certified as a woman and a minority-owned business and thereby gain additional options when pursing contracting opportunities.

I was tasked as a corporate buyer to see if I could find minority and women-owned businesses that I thought could participate in the way the corporation for whom I worked did business. Unfortunately, I found that generally minority and women business owners, as well as non-minority business owners, failed to do the three things you absolutely have to do when you pursue corporate  business. I got to the point that within ten-to-twenty seconds into a conversation I knew whether a supplier was ready to do business.

I knew what the needs of my company were, and I knew the type of suppliers that we were going to need: the level of sophistication they had to bring to the table; and the level of performance they were going to need in order to be successful. As well, what were the critical things that were going to determine their success or failure?

Now I want you to think about this: why in the world, as a buyer for a company, would I bring in a supplier that I didn't think could be successful. Why would I do that?

As a buyer, I wasn’t trying to make minority participation numbers for the sake of making numbers. That's not what we did in corporate procurement. When we brought people in, we brought them in with the expectation that they would be able to perform at the same and preferably higher level than any other supplier. It didn't matter whether it was a minority, a woman-owned business or other. We offered a helping hand program to create more opportunities for companies previously underserved and under-utilized in the corporate supply chain.  We did not have a hand out or mandated program.  If your company recieved an opportunity to come do business with us, the expectation was that you would meet and exceed expectations.

No buyer in their right mind knowingly brings in  a supplier that cannot meet expectations. When I would go out to networking events, mixers, trade shows, etc. I already knew what it was going to take to be successful within our buying organization. Why? Because I was already dealing with successful suppliers who currently had the business. Clearly if I thought somebody was better than the folks that were already contracted with us,  I could give them an opportunity.

If I saw a supplier that was bringing something unique that we could get value from, then that was an opportunity. If an existing supplier wasn't performing well, and that's another conversation in and of itself, it was time for me to swap them out and  go to the marketto see what was out there and to see what we could do to advance the cause.  Sometimes it's easier to rehabilitate the current supplier and work with them and bring them along, but depending on what it was I was buying, it oftentimes just made sense to go to the market and see if I could find new suppliers. Consequently, I was always in the market to bring in new companies. Big companies are always in the market to bring people in that can make a difference.

So when you hear stuff like “they're not serious about doing business with folks like us; there aren't any real opportunities; big boys got it locked down”, etc. - that's not true. What's true is you have to up your game to get the business - and so that leads me to the title. If you want to get better at landing corporate contracts, ask yourself these three questions. Number one: do I have a solution that a corporation would say is valuable to them? I didn't say, am I offering a solution that's valuable? I'm saying, am I offering a solution that they say is valuable? It's kind of like getting a gift for your significant other, and understanding the difference between a gift and a present.

A present is what you present to someone as something that you want them to  have. A gift, however, is something they want to receive.  If it's something they want to receive, then it has value for them more often than not. When I talked to people, they came up and they made a presentation they wanted to present to me: “Hey, I offer janitorial services; Hey, I have a staffing company; Hey, we offer this widget, etc”.

I'm thinking, I have, 30 janitorial companies. I have 15 staffing companies. There was nothing about their presentation that was of value to me as a buyer. Not at all. The conversation didn't even register with me. I was like, okay, this is a “me too”. This is not somebody that has differentiated themselves or their company.  Therefore, there’s no further action required on my part.  I hoped that they said or did something to differentiate themselves but more often not.  Having even done basic homework on my company and our priorities would have been a great start.

The second question to ask yourself: do you sell your products and services the way your target corporate client buys it? I can't tell you how many times suppliers wouldn't do the homework to find out how we bought. More often than not, they told me what they sold and invariably they would only offer a piece of a solution. Many of them didn't quite understand why offering a piece of a solution was a problem for us.

Here is a question you have to ask yourself: Do I have a solution that my customer, a corporate client - would say they value, and am I offering my product and service the way they buy it - not am I selling it the way I want to sell it? Am I offering it the way they buy it; the way they go to market to get it? And number three, the third question you need to ask yourself: am I really and truly ready for an opportunity if they give it to me?

Now this one is a bonafide killer condition. There've been a lot of people who have convinced buyers (and I've been burned by this one) that they can do  task ”X” and task ”Y”, but when they get the contract  they fail, and that is costly for a customer.

It's embarrassing for me as the person that brought them in and it's even worse for you the supplier because it almost means that there's only a slim chance you're going to get a do over. You don't get a second chance to make a first impression. If you made it that far and you actually got the opportunity and you weren't prepared to exceed expectations and hit a home run, then your name is going to be mud so fast, it won't be funny. And it's going to be mud within the company and it's going to be mud trying to go to other companies within the industry, so you absolutely have to be ready when the opportunity comes. 

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