Congratulations! You have made it to the last installment of my nine-part series on the Pathway to Your Success. This series has talked about a number of different things. It's been about helping you to discover the small business growth opportunity with the biggest companies in the world. I have discussed corporate contracts versus government contracts; how to use corporate contracts for legacy business growth; what large companies buy; why the time is now for small business owners to get into this game; and financing your business so that you can really play to win. I have also covered the mindset for success.
topic and the final part of this series is “The Corporate Opportunity: How to Get Into
I was talking to someone with whom I'm working closely and we were thinking back about our childhood. Do you remember when you were a teenager how you just knew everything -- you were on top of the world? Sometimes it was difficult listening to your parents because you felt like, “Oh, mom, Oh dad, you're so out of touch. You're so old school”. It was difficult to listen to them because you just had a full head of steam, you knew what you wanted to do, and you were just ready to get out there and go. As you've now gotten older, you're kind of realizing maybe your parents weren’t quite as dumb as you thought they were.
Maybe they knew some things. Now you understand what they were telling you. Now it makes a lot of sense.
Well, getting into this game is very similar. You've heard me say on a number of occasions, “create what you haven't yet imagined by discovering what you don't know”, especially through the supply chain organization. There's a specific set of rules. There are things you have to do; there are specific qualities that big companies are looking for. There are things that they expect you to have.
I'm going to
tell you right now that, in spite of these requirements, corporate contracting
is easy. Let me say it again. Corporate contracting is easy. It really is. It
is harder to sell to individuals than it is to corporations. If you're trying
to sell to a B-to-C (business to consumer), or business-to-small-business,
that's perhaps one of the most difficult sales you're ever going to make. But
selling to corporate is not difficult. You just have to be able to check all
You may not know what all the boxes are, and you may not know exactly what it means to check a specific box. And then of course, once you have all the boxes checked and you get in, you think “Oh my goodness, I had no idea what I was signing up for. I'm not even sure I can make money at this”. Those three things have been issues where people before you got in, stumbled, and made it difficult for everyone that has come after them. So yes, you are battling a preconceived notion that A) you may not be able to succeed and B) that the odds are stacked against you. However, the good news is if you actually discover what you don't know, you can create what you haven't yet imagined and you can successfully navigate into this space and do extremely well. So with that as a backdrop, with regard to how to get into this game, I'm going to give you three simple things. (Think of me as someone who knows the game, knows what it takes and is sharing some wise advice. I’m dropping dimes, giving you wisdom, sharing information and news you can use.)
thing is you have to offer value that your client says is valuable to them.
Now, this one's a little tricky because typically what happens is we go in and
we say we have the world's greatest this, that and the other. We have a
proprietary this, that and the other which has this kind of impact, offers this
type of savings.
But that's just you talking to the client. That is not you listening to what they have to say. Let me say that again. That is not you listening, or you gaining an understanding of how the client determines value. The way you determine it may not be the way they determine it. So, you don't have value until the client says you have value.
for sports analogies, but here in the US we have this game called basketball.
And like most sports, there is a referee or an umpire - somebody that makes
sure that the rules are equally applied against and for the opposing teams. Anytime
that one of the rules is violated, there is such a thing as a foul, and a foul
is usually based on a referee or an umpire seeing something that didn't look
right or that was against the rules. One of the best players, named Bill Russell, coined a great phrase. He said,
“if the ref didn't see it, you didn't get fouled”. What I want you to take away
from that is if the customer doesn't say it has value, then it doesn't have
value. It doesn't matter what you think about it. The customer has to say it
has value. That's the number one thing you have to get right to get into this
Number two, you have to offer products and services the way your customer buys them. Now that one's a pretty substantial challenge because oftentimes you may not know how your customer buys them, which means you're going to have to ask, “Hey, look, how do you actually go about procuring this particular product”? “Do you buy a standalone or do you buy it as a bundle? Do you buy it aggregate with other different products or services? You have to ask these questions, then you will know what you need to do in order to pitch it to them and create minimum disruption to their current system.
I tried to sell something to a large company once and I hadn't done my homework to understand how they purchased it. The person to whom I was talking was honest enough to say, “Hey, I can't buy it the way you're selling it because we don't buy like that. We buy what you're offering as part of a total solution that has five, six, seven, eight or more components tied to it. So, if you can figure out how to put all of that together, then we can resume this conversation”. I learned quite a bit from that experience, but it was evident that I hadn't done my homework, so I more or less wasted someone's time.
The third thing is you have to be what they call “contract ready”. You have to be ready to do business. The fortune 500 or the global 500 largest companies in the world really aren't looking to do supplier development like they did five years ago, 15 years ago, 25 years ago. At that time they really didn't have as many sophisticated buyers. Innovation came in different waves and they were able to ride innovation for a good long time before competitors caught up. In today's business climate, those luxuries do not exist any longer. Innovation is coming so quickly that corporations constantly have to look for the next source and they really don't have time to do supplier development. So, they need for you to be ready to do business on day one.
They're really not mentoring, they're not guiding, they're not taking on development projects. That minimizes opportunities for you to work with them directly. They may want you to work with what they call a prime contractor or a first-tier supplier. Those are companies that can probably take on that development work. This may be a fantastic business model for you: to actually go not after the fortune 500 or the global 500, but their tier-one or their prime suppliers, their prime contractors. That might be faster for you to get in and get the support you need, the book of revenue you're looking for, and help you build sufficient capacity so that you can move forward. Depending on what you're offering, that may be the best place for you to build because you can grow a pretty substantial business selling to the prime or to the sub or to the tier-one or tier-two suppliers to the big boys.
Do not take it as defeat that you couldn't sell to the fortune 500 directly. Take it as an accomplishment that you got into the supply chain and you actually found a better home for your product. You may be able to offer it at much lower cost because the prime and the tier-one already have the procedures in place that are necessary to manage the detailed requirements of working with a large company. So, all you have to do is provide your product or service. You don't have to deal with all of the requirements of working with the big companies directly. Part of that is being handled for you. The cost of it is being shouldered by someone with whom you are working. All you have to do is deliver your product and/or service and call it a day. That may be a perfect place for you.
The other issue you have with being contract ready for today and tomorrow -- whether you deal with the fortune 500, the global 500 or the prime or the tier-one – is all of them expect you to be ready to do business not only today but tomorrow.
worked for Shell Oil, human resources personnel came into my office one day and
they were having a conversation about the two different hiring strategies they
had. They had a strategy for what they
called support staff versus staff. Staff oftentimes went into management.
Support staff was excluded from management. Support staff was hourly, and staff
was salaried. I don't know if it's still true today, but with support staff,
the expectation was that you would come in, you would perform what you were
instructed to, you would trade hours for dollars, and you'd go home. And that
was it. They did quite a bit of screening to get the right caliber of people,
but they felt like there were a lot of people that could do that work, so they
had processes in place so that - if they needed to replace people - they could
do it quite easily. With salaried or staff people however, the strategy was
they weren't hiring you for the job that you got when you entered the company.
They were hiring you for the job three, four, five promotions down the road.
That's kind of fascinating when you think about that. Imagine if you're hiring someone not just to fill the immediate job, but you're looking at them for the potential of what they could do for you in the second, third, fourth, fifth job as you promote them through your organization or move them around. Well, that concept is precisely the thing that corporations are looking for in their suppliers. It's not only can you do what they need today, it's that you are really valuable and important if you can actually help them with the business of tomorrow. You want to be in a position of not only helping them with the business of today, but definitely the business of tomorrow, which means you've got to have a whole host of things in place.
You have to have the capacity so that if the client makes an acquisition or merger, you can ride with them -- you can expand the capabilities of your business. If they decide to open a new facility, you can expand the capabilities of your business. If they take on more staff, or have a huge increase in hiring, then you can expand your product or service to accommodate more employees. This gives corporations a lot of continuity and business certainty which, if you've been paying attention to this series at all, is the thread that runs through all nine blogs.