Dealing with Big Corporates
I have worked in and for big corporations including Exxon and Fujitsu for a significant part of my working life as a lawyer and have got to know how they work, what makes them tick and how to deal with them.
I have also been an owner manager of a business as a partner in two London law firms for seventeen years. So I understand what it is like to be running a law firm or say a small hi tech company that has a great product or service it wants to sell to a large corporate. It can be very difficult to build a relationship and to succeed.
The first thing to realise is that though they may have a huge brand name and a turnover of £10 billion or more and a work force of 20,000, big companies are essentially made up of people - and it is people you deal with not the corporation.
However those people and particularly the management will not necessarily behave in the same way as in a smaller start up. The motivations of the main board of directors answerable to shareholders may be more like owner managers, but there are lots of layers of management below them and their motivation may well be completely different. They may have a budget to spend or protect, a target of savings to meet or sales to make. If they are say part of the procurement team they may well be incentivised to reduce the company's spend. In other words they will be paid a salary and a bonus - and the bonus will relate to how much money they save. Always seek to understand how people are rewarded even in large businesses - it is a key to dealing with them successfully.
The next thing to work out is the structure and organisation of the business. All big multinational corporates will have to manage their business and have an organisational structure, but these will differ sometimes quite significantly. Some companies like IBM and Oracle have a very centrally controlled business with all major decisions made in their head office in the United States. They will have significant local affiliates but any key decisions about a major contract or changing their way of doing business will be made or at least endorsed at a central headquarters. Others will have more local autonomy to set up local practices and to make purchasing decisions at the local level with a much looser central control.
Large companies will also have their set standard ways of doing things and will be reluctant to part from this. If they have a standard contract they want their suppliers to use then this will probably have to be the starting point for any agreement with them. But if it needs changing to protect a smaller supplier or even to suit the deal you are trying to strike with them then do seek to introduce amendments. If they want to do business they will usually consider rational requests for change. However it may be that the person fronting the deal will have to seek agreement to any change from a legal or a commercial function, or worst still from some distant head office in another country. So patience really is a virtue in these circumstances. Big businesses are like oil tankers - they take a long time to change direction.
I have also been an owner manager of a business as a partner in two London law firms for seventeen years. So I understand what it is like to be running a law firm or say a small hi tech company that has a great product or service it wants to sell to a large corporate. It can be very difficult to build a relationship and to succeed.
The first thing to realise is that though they may have a huge brand name and a turnover of £10 billion or more and a work force of 20,000, big companies are essentially made up of people - and it is people you deal with not the corporation.
However those people and particularly the management will not necessarily behave in the same way as in a smaller start up. The motivations of the main board of directors answerable to shareholders may be more like owner managers, but there are lots of layers of management below them and their motivation may well be completely different. They may have a budget to spend or protect, a target of savings to meet or sales to make. If they are say part of the procurement team they may well be incentivised to reduce the company's spend. In other words they will be paid a salary and a bonus - and the bonus will relate to how much money they save. Always seek to understand how people are rewarded even in large businesses - it is a key to dealing with them successfully.
The next thing to work out is the structure and organisation of the business. All big multinational corporates will have to manage their business and have an organisational structure, but these will differ sometimes quite significantly. Some companies like IBM and Oracle have a very centrally controlled business with all major decisions made in their head office in the United States. They will have significant local affiliates but any key decisions about a major contract or changing their way of doing business will be made or at least endorsed at a central headquarters. Others will have more local autonomy to set up local practices and to make purchasing decisions at the local level with a much looser central control.
Large companies will also have their set standard ways of doing things and will be reluctant to part from this. If they have a standard contract they want their suppliers to use then this will probably have to be the starting point for any agreement with them. But if it needs changing to protect a smaller supplier or even to suit the deal you are trying to strike with them then do seek to introduce amendments. If they want to do business they will usually consider rational requests for change. However it may be that the person fronting the deal will have to seek agreement to any change from a legal or a commercial function, or worst still from some distant head office in another country. So patience really is a virtue in these circumstances. Big businesses are like oil tankers - they take a long time to change direction.
Other Sources
Here are some other views on how to deal with big companies.
1. See this Guardian Article on getting paid and making profit.
2. Read 3 Tips for Doing Deals with Big Companies from a publication called Entrepreneur.
3. I quite liked this practical advice on How to Negotiate with Big Corporates.
1. See this Guardian Article on getting paid and making profit.
2. Read 3 Tips for Doing Deals with Big Companies from a publication called Entrepreneur.
3. I quite liked this practical advice on How to Negotiate with Big Corporates.
Personal Examples
The "Standard Terms Conundrum". One of the givens with big companies is that they have all developed their own set of standard terms of contract and, having done so, seek to impose these on their suppliers and customers regardless of their suitability. I recall negotiating a software licence with an oil company which refused to adjust its standard terms which were designed for acquiring commodities. The solution here was to involve the oil company's legal advisers as they understood the difference between a product supply and a licence of intellectual property.
We can't change that it's our policy. I acted for a small UK client once doing a deal with a large US based software and services supplier. Their conditions were plainly wrong and did not work for the transaction concerned, but the local salesman, contract negotiator and indeed lawyer were powerless to alter terms dictated from headquarters in the USA. Eventually we managed to speak to a lawyer in head office who was responsible for the standard terms and explained the problem we had politely and respectfully (they would have spent many hours developing their standard conditions) in legal terms. They quickly recognised the problem and agreed suitable amendments. It's all about getting to speak to the right person and adopting the right attitude.
The Irresistible force meets the Immovable Object. Even big companies can get into difficulties in dealing with each other if they take an inflexible corporate approach. I recall working for Exxon negotiating a global agreement with Microsoft many years ago. Both sides wanted to use their standard terms and refused to budge. The issue got escalated to the highest level!
We can't change that it's our policy. I acted for a small UK client once doing a deal with a large US based software and services supplier. Their conditions were plainly wrong and did not work for the transaction concerned, but the local salesman, contract negotiator and indeed lawyer were powerless to alter terms dictated from headquarters in the USA. Eventually we managed to speak to a lawyer in head office who was responsible for the standard terms and explained the problem we had politely and respectfully (they would have spent many hours developing their standard conditions) in legal terms. They quickly recognised the problem and agreed suitable amendments. It's all about getting to speak to the right person and adopting the right attitude.
The Irresistible force meets the Immovable Object. Even big companies can get into difficulties in dealing with each other if they take an inflexible corporate approach. I recall working for Exxon negotiating a global agreement with Microsoft many years ago. Both sides wanted to use their standard terms and refused to budge. The issue got escalated to the highest level!
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1. Understand what motivates the corporation you are dealing with.
2. Have a unique proposition that will capture their attention. 3. Work out who the key individuals will be and what motivates them. |
