Business Services Industry

Significant other - corporate partnering

Entrepreneur, April, 1996 by Janean Chun

Teaming up with big business increase your chances of success.

Time warner did it with the Turner Broadcasting System. Capital Cities/ABC did it with Disney; Westinghouse and CBS followed suit. Dow Jones did it with ITT, and Microsoft did it with DreamWorks. But the real force behind the partnering trend is occurring on a more obscure level.

"Most of the press you see is about the big behemoths partnering with each other, but the largest actual volume of partnering is between [larger and smaller companies]," says Curt Sahakian, an attorney, business strategist and author of Corporate Partnering: A How-to Handbook (The Corporate Partnering Institute).

According to a recent Coopers & Lybrand study, 51 percent of the fastest-growing U.S. businesses used external teaming; companies that collaborated with outside corporate partners launched 23 percent more new products over the past two years than those that relied solely on internal resources.

Small businesses have always been slightly infatuated with big business's power or, more specifically, with the dowry a conglomerate can bring to a marriage. But until recently, this admiration had gone largely unrequited. Sahakian sees that mind-set changing, as big businesses become, quite frankly, desperate.

"Big companies have a customer base they can sell more product to, but they don't have that product," Sahakian explains. "[Companies] that are lucky enough to be in the right place at the right time with a growing opportunity know they have a window of time. If they don't exploit an opportunity quickly, someone else will." In that situation, small business suddenly starts looking less like a frog and more like Prince Charming.

"Whenever there's change, you have to adapt to it, and small organizations are inherently better at responding to change," Sahakian says. "As cycle times drop, [big businesses] have no choice but to partner [with small ones]. In fact, I don't think there is a large company out there that isn't partnering."

But before you let it go to your head, Sahakian warns there are many major issues to address before you can cement the relationship. "Determine what you've got, what your weaknesses are, what you need, and who has what you need," he says.

With big corporations offering money, distribution, entrance to markets and years of wisdom, it may be tempting to focus on what's in it for you. However, as in any relationship, perhaps the attitude that works best for each partner is one of selflessness. "Before you approach a partner, you must first make sure you have something they need," says Sahakian, who suggests networking with financial analysts and setting up workshops on the Internet as ways to define those demands. "If you understand the burning needs someone has and know you can satisfy them, you're halfway there."