How Attractive Are You to Potential Suitors?
A client our ours expressed that he was interested in building a new business in the healthcare sector. We agreed that to be successful, the company would need a strategic partner that has experience and capabilities in the healthcare space to complement the customer relationships the client has cultivated over the years.
We embarked on a series of initial discussions with potential partners. These were essentially sales pitches or beauty contests to showcase the capabilities of each partner.
What we found most interesting was how each potential partner approached the discussions. One organization rose above the others and in our opinion is in the best position to close the deal with our client. (The discussions are ongoing.) They stood out in three key areas:
- They understood the needs and concerns of the customer.
As fundamental as this is, it was surprising how each organization handled this differently. While any good businessperson understands that you need to understand and meet the needs of the customer, it was surprising how some of these experienced business leaders were so fundamentally off in this regard. One team came in with a lot of assumptions and asked few, if any, questions about our client’s business. Essentially, they assumed that the needs of their customers fit with their own goals and objectives. The best company, in our view, took time to understand the goals of the customer and, more importantly, was open to learning more during the process.
- They forged a deeply personal connection.
The best team took the time to research our client’s organization beforehand and made efforts to make a personal connection. They understood what was emotionally important to the customer, rather than just focusing on the business objectives. While these were substantial businesses, we were surprised at how many of the opinions that the prospective partners formed were driven by emotional connections with the various partners.
- They built the best strategic assets and capabilities (long before the meeting).
Many of the factors that gave one potential partner a clear edge were strategic decisions that were likely made months or years before the teams even came to the table to pitch their company. The biggest differences between various players were driven by previous acquisitions they made and capabilities they built. In short, the strategic, million-dollar decisions the board and CEOs have made put their companies in the game long before they began joint venture discussions with our client.
What are you doing now in order to close the deals that lie ahead? Share us your thoughts at firstname.lastname@example.org.
KARL STARK AND BILL STEWART | Columnist | Co-founders, Avondale
Karl Stark and Bill Stewart are managing directors and co-founders of Avondale, a strategic advisory firm focused on growing companies. Avondale, based in Chicago, is a high-growth company itself and is a two-time Inc. 500 honoree.