28 Steps to a Strategic Alliance

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Figure out whom to contact first at potential partners. In approaching Federal Express, there was an obvious place for Owades to start: the company has district managers who handle different areas of the country; their job is to get new accounts and service them. That's where Owades began in February 1988.

Wend your way through the corporate structure. "Lynn Anderson, the district manager, was saying, 'Your idea is impossible -- but wait. Maybe if you call so-and-so in Memphis [the site of Fed Ex headquarters] . . . ' " explains Owades. "I'd call Memphis and ask people what their roles were, could they help me. I was respectful of busy people's time, so before the call, I made sure I could articulately say what the concept was and what I wanted from them. I'd write it out on paper.

"Every person I talked to gave me a little information. I'd ask, What are Fed Ex's goals with the catalog industry? Is the company currently in flowers? You don't always get answers, but you might. Very often it took half a dozen calls to get through to these people. I never expected them to call me back; they didn't know me."

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"At the center of Ruth's effectiveness," says Stanford lecturer Grousbeck, "is that she can sit down across the table and get you to do almost anything."

Owades's persuasiveness served her well in plowing through the Federal Express maze. She was referred to a consultant named Jay Walker, who was searching out catalog business for Federal Express. He hooked her up with Fed Ex marketing chief Richard Metzler and with Mike Glenn, now senior vice-president of catalog services. "It helped that she'd done a lot of homework," says Glenn. "Plus, we had just begun an initiative to get more involved in catalogs." Nevertheless, between February and April of 1988 there were infinite phone conversations, faxes, and letters. Finally there came a definitive conference call involving Owades, the bigwigs in Memphis, and the local Fed Ex rep. Setting aside details of pricing, systems, and timing, Federal Express confirmed that it was on board to help make Owades's idea work.

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Negotiate. The Federal Express negotiations were done without in-person visits. Owades agreed to take on legal liability for packages left without signatures, negotiated a volume-pricing schedule, and determined what size her company would need to reach within a year to keep everybody happy. Similar negotiations had to be made with the growers, who were being asked to prepare for unknown volumes of orders. "I can't say strongly enough that we were all figuring it out together," says Owades. "This wasn't something I rammed down their throats. I didn't know what the minimums would be, and neither did they. Everybody just knew that by the time the year ended, if we didn't reach certain volumes, no one would be very happy, most of all, us. It was a real experiment."

Impress potential investors. Owades put $150,000 of her own money into the company to show her commitment, and took a reduced salary. In addition, she went out on a limb: she sent potential investors flowers in boxes via Federal Express, the way they'd receive them if Calyx existed. It was a risk: if the flowers didn't arrive in good shape, she'd have blown her chances. The first business plans were sent out in May, and by June, 18 people had committed to the full $2 million Owades was seeking.

Train your partners' employees. "I took a sample box on a tour to the growers and showed them what to do and how to do it," says Owades. "Most were pretty small entities, with two or three people who'd be handling our business."

Solicit suggestions, especially from your partners in their areas of expertise. "From the very beginning I really enlisted the help of the growers. It seemed like the obvious thing to do, but it's also a good strategy because then people were invested in making things happen. I don't know that I thought about it that way, though; I just wasn't the expert. We solicited opinions from growers, Federal Express's packaging lab, and the box manufacturers, and we synthesized them."

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Summer ticked along. Owades continued working out details with Federal Express and lining up growers. Fran Wilson officially came on board in July. Working out of the same one-room office, the two women bought a computer, had software designed, got mailing lists, and negotiated for a larger space. They nailed down pricing with growers, agreeing to wholesale plus a surcharge to cover additional personnel costs.

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