Beyond Outsourcing: How Small Businesses And Large Companies Can Work Together To Create New Value
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Episode 110 Transcript:
This episode is brought to you by Business Advancement Incorporated − enabling successful leaders and companies to accelerate to their next level of growth. On the web at BusinessAdvance.com.
And now, here’s Pam and Scott.
Pam Harper: Thanks, Chris. I’m Pam Harper founding partner and CEO of Business Advancement Incorporated. Sitting right across from me, as always, is my business partner and husband Scott Harper. Hi, Scott.
Scott Harper: Hi Pam. Once again, it’s great to join you for another episode of Growth Igniters Radio with Pam Harper and Scott Harper. If this is your first time listening, our purpose is to spark new insights, inspiration and immediately useful ideas for visionary leaders to take themselves and their companies to the next level of success.
So Pam, what are we going to take on today?
Pam Harper: How small businesses and large companies can work together to create new value.
Scott Harper: All right…
Pam Harper: Now, those who know us may recall a study that we did nearly four years ago now, where we asked CEOs and senior executives in companies of all sizes about trends related to strategic alliances.
Those who responded predicted that these relationships would be even more important over the years. I love it when we go looking fast forward here, and it has come to pass.
Scott Harper: So our crystal ball is clear.
Pam Harper: That’s right. And there were a lot of other insights from this study that have even more relevance today.
Scott Harper: Right. And you can access the study report by going to the resources section on GrowthIgnitersRadio.com, Episode 110.
Pam Harper: So − one of the other big insights is that in a rapidly changing environment the path to staying relevant to customers lies in combining in all types of ways to create new value through products and services. Of course, these relationships are not always easy to sustain.
Scott Harper: That’s what our studies show.
Pam Harper: That’s right. So to keep the focus on providing value to customers, small businesses and large companies need to go beyond their differences and learn from each other in order to unlock the full potential of these relationships.
This focus on the customer and creating new value is why we are bringing back today’s guest, Jim Blasingame, author of the award-winning book The Age of the Customer, Prepare for the Moment of Relevance. He’s one of the world’s foremost experts on small business and entrepreneurship. He’s also the creator and host of weekday radio program The Small Business Advocate Show, which is on the air five days a week since 1997. I am very proud to be a member of Jim’s brain trust for over ten years. You can see Jim’s complete bio and listen to other conversations with him by going to growthignitersradio.com, episode 110 and scrolling down to resources.
So Jim, welcome back again to Growth Igniters Radio!
Jim Blasingame: Hi Pam, how are you doing?
Pam Harper: I’m doing great. So glad you’re able to join us again. This is such an important topic.
Jim Blasingame: Thank you for inviting me.
Pam Harper: Jim, we saw this insight about the importance of creating new value by having small companies and large companies working together. What do you see in 2017? You’re the small business advocate…
Jim Blasingame: If you don’t mind, let me go back a little ways. I’ve got quite a deep taproot in this area. I saw what we are talking about right now begin to germinate probably − oh, 25 to 30 years ago when companies started downsizing. Actually, they started downsizing in the 70’s, but they really did it quite a bit in the late 80’s and 90’s. So, what I saw was that these big companies were downsizing the people, but that didn’t mean they were downsizing the tasks that those people did.
Pam Harper: That’s true.
Jim Blasingame: So what it created was what we now call outsourcing. To a large degree, the people who got laid off went out and formed companies that came back to do the same job as a contractor. Right? So now we have the well-developed sector of outsourcing that we see.
So in the late 90’s when I started doing my radio show, I predicted three things that small business owners would have to become good at, above all other things in the twenty-first century. The first one was that they would have to learn how to leverage technology; they were going to have to focus everything on making sure that they were good at technology. Number two, they were going to have to good at networking. Then the third thing is they’d have to develop strategic alliances. The reason was, because I knew more and more big companies were going to be requiring more and more out of their smaller outsource partners. Now, those small companies might not have the resources to pony up for an RFP that might come their way. So they were going to have to learn how to not only outsource for their big customers but maybe align themselves with another company of their size. This would be someone who had capability that they didn’t have, but didn’t have the relationships. They would have to bring in strategic partners, strategic alliances to take advantage of those things. You can almost think about a strategic alliance as another way to capitalize your business. Does that make sense?
Pam Harper: Absolutely. So it sounds like what you’ve been doing is preparing small businesses to look at these kinds of different partnering relationships for quite a while. Now you’ve written this book, The Age of the Customer, and the focus is on the customer of course; it’s on creating new value.
Jim Blasingame: Right.
Pam Harper: In the changing world, how do you see these relationships needing to evolve to create that new value that customers are expecting? It has changed so substantially.
Jim Blasingame: There are a couple of things that are happening in parallel universes. Number one, I don’t know if you have noticed this or not − Pam I think you and I have talked about it on my show before, and that is how things have changed since 2008. What companies were willing to do, and how much larger companies were willing to really be good partners changed a lot after 2008. That’s one thing you have to realize. I say 2008, and I mean there obviously the recession and the financial crisis, which are kind of two different things they just happened at the same time.
Companies have really changed the way they look at relationships. I guess my advice first would be, don’t be naive about the relationship with your big customers. If you are a small business, you probably need to realize − and again this might be a little controversial, but I think it is tough love − you are going to have to realize you may be their partner − but the way you think about being a partner, they won’t think of it that way. Does that make sense?
Pam Harper: Absolutely. We saw that. In fact, that was one of the big findings of our study; you could have two people sitting across from each other in a room calling the relationship the same thing, and they have totally different definitions internally of what that means, how they are set up. I think “you are my strategic partner,” and you are thinking “I’m going to tell you what to do and you’re going to do it”. You know, that creates a real problem.
Jim Blasingame: And “if this doesn’t work out I’ll jack you up and run another one under you.”
Pam Harper: That’s right.
Jim Blasingame: You can’t be naive about that. Of course, we still want their business. I still have memories of prior to 2008 when my customers weren’t like that. But things are different now. The other thing that I think people need to realize is − in my opinion − if you are trying to create a strategic alliance you’re more likely going to create it with, as I said earlier, with somebody who’ll help you serve a bigger customer. The big company is going to be your customer, but they may see you, if you do a good job, they may see you as a strategic alliance rather than a vendor if you do your job right. One thing you can do that will absolutely keep you in their view as a strategic alliance, more than just a vendor, is if everything you do helps them to help their customers.
Pam Harper: That’s right.
Jim Blasingame: If you can do that, that’s how you’re viewed − whether you’ve got two or three other strategic alliances helping you or not − that’s how you are viewed by them as a strategic alliance. It will help you avoid being replaced by a competitor because a competitor’s probably not going to come in like that. They’re going to come in thinking “I can save these guys money.” If your track record is that your helping them help their customers by doing things that they’re not good at, by being relevant to a customer’s sector that they’re trying to reach that’s your forte − that’s what you’ve got to do. Look all the way through your big customer to their customer. Talk to them about that customer and then deliver on that. That’s how that big company will think of you as a strategic alliance.
Scott Harper: So adopting a strategic mindset is going to make you a better strategic partner. Makes sense.
Jim Blasingame: That’s exactly right.
Pam Harper: And that’s what we are going to talk about in the next segment. We’re going to take a quick break right now, and when we come back we’ll talk more with Jim Blasingame, the small business advocate, about how we can create even stronger relationships with our partners. Stay with us…
Scott Harper: You are with us on Growth Igniters Radio with Pam Harper and Scott Harper, brought to you by Business Advancement Incorporated. We focus on enabling visionary leaders to dramatically increase momentum for game-changing results, and we’re on the web at BusinessAdvance.com.
Pam Harper: Does this topic resonate with you? Check out related episodes to expand your perspectives and take away immediately useful ideas. Go to GrowthIgnitersRadio.com, episode 110, and scroll down to resources.
Scott Harper: And while you are there, sign up for our weekly alert of upcoming episodes so you will always be up to date.
Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper − that’s me − and Scott Harper. Today Scott and I are talking with Jim Blasingame, author of The Age of the Customer, and host of The Small Business Advocate Show, about increasing the quality of partnering between small and large businesses to create even more value for everybody involved. Jim, how can people find out more about you, your book, and The Small Business Advocate?
Jim Blasingame: Thank you Pam, and again I want to congratulate you and Scott on a great job you are doing on your show.
Pam Harper: Thank you.
Jim Blasingame: I want you to know that I watched you guys as you formed this and put this together, and now you’ve been on a couple, three years I think. I’m really proud of what you guys have created, and how you have stuck with it. Sustaining what you do is the key to whether you’ve got quality people or quality ideas, and you guys have. I just want to first congratulate you on that and all the great work you’re doing.
Pam Harper: Thank you.
Jim Blasingame: My website is thesmallbusinessadvocate.com, or you can go to jimblasingame.com; that will get you to all the things that I do that, where all the free stuff is, including the great interviews I have done with Pam Harper over the years. Also if you want to find out more about my book The Age of the Customer, you can go to ageofthecustomer.com; there’s a lot of free stuff on both of those sites. You can buy the book from me; you can buy it from Amazon. If you want to work a little harder, there are a whole lot of articles on my main website that are from the book. You can get a whole lot of the book for free just by going and looking around there. Whatever it takes to make you have the maximum opportunity to be successful. That’s one of the things the three of us have in common.
Pam Harper: That’s right. It’s a great resource, Jim. So let’s get back to our conversation.
You talk with a lot of small businesses − a lot of small companies. They tell you a lot of things. What do they tell you that they wish would happen differently or better in their relationships with larger companies, where everybody is seeing it as working together to create something with new value for the customers?
Jim Blasingame: I did some research on this not too long ago. Pam, you may have actually participated in it; I don’t remember. I asked people who were in the profile of small business that you are talking about, “Tell me about your relationship with your big business customers”. We asked them a lot of things. The general consensus was that big companies − and I think we said this earlier − they want you to be their partner, but they don’t necessarily want to be your partner. It’s not that they mean to be that way; it’s just the way they are. They are so big, the way they do things, everything has to have a committee or two, and people change.
I would say one of the main things that’s disheartening to a lot of leaders of small companies, especially along the lines of your specific point about the long term relationship, is the people they connect to in large companies keep changing. Now, the larger the company the worse it is; the smaller the company, maybe not so much. When I remember back in the day, you might work with the same purchasing agent or the same person in charge of a certain area of a company − you might work with them for 20 or 30 years.
Scott Harper: Yep.
Jim Blasingame: Now, they change so fast. Or if the person you have been working with doesn’t leave the company, they keep moving things around. Are you guys seeing that? That’s one of the most frustrating parts that I am hearing from my folks. Once you establish a working relationship, six months, a year later you have to do it all over again.
Pam Harper: It does happen that way. In fact, one thing to think about is that we have companies of every size of their growth journey listening. So there are people who are listing to you saying this right now, going “Huh, this is a very interesting thing.” They are thinking, “We work really well with our small businesses that we’re collaborating with; we’re creating new value together.” Here you are saying that the people that you talk to regularly − the small businesses − are saying, “Uh uh, doesn’t work that way”.
Jim Blasingame: Well you know, I just think that the big companies aren’t doing it to you on purpose when they behave in a way that sort of creates problems for you. The small company is not going to complain probably, they are going to adjust. They are going to suck up their frustration and all that sort of thing. The big companies are not doing it on purpose necessarily; it is sort of the nature of the beast… A while back I was actually considering creating an award to be given to big companies for their performance with small vendors.
Scott Harper: Okay
Jim Blasingame: Come up with some criteria. Because I think they just don’t realize what they’re doing… It varies anywhere from being inconvenient to bullying. Again, I said earlier − I might be a little controversial, but I have been bullied by big companies, and from bullying all the way down to just not realizing that you are so big you could roll over me. Does that make sense?
Scott Harper: Yeah, it does. So you have this all too common lopsided relationship. It seems, though, that this dynamic is a disservice not just to the smaller partner, but to the larger company and the larger company’s customers as well.
Jim Blasingame: They’re not getting what they can get.
Scott Harper: Yeah.
Jim Blasingame: Because what I have seen is a lot of money gets spent on a project that the people, internally in the big company, work on and the small partner brought in works on, but the project gets killed ever before it gets finished because something upstream changes. And it kind of demoralizes everybody. So, I don’t know how to fix that, but if I could say one thing to big companies − and I do business with them just like you guys do; I love them; I still want their business − if I could say something to them right now I would say, “Find a way to become a little more in-tune with how your interaction with your small companies is affecting them. Especially if you want to get more for your money out of them. You want to get better performance. Because if they are always worried, so to speak, about how the relationship is going to roll out, then you’re not going to get the most performance out of them.”
Pam Harper: I agree.
Scott Harper: The responsibility for full value falls on both parties.
Pam Harper: That was interesting too, in that study that we did, one of the strongest themes was this need for mutuality. We looked at both the small companies and the large companies. You know what was really fascinating is both of them said, “We need mutuality.” So there is a need to learn from each other, and that’s why we really wanted to talk to you today.
Jim Blasingame: One thing real quickly − the problem with the big companies, again is not that they are doing anything on purpose, they aren’t mad at anybody, anything like that. But prior to 2008, you were probably dealing with the person who, if there needed to be an adjustment − somebody needed to make a difference and adjust to the little company − you were dealing with that person. Now, after 2008 you’re less likely to get with the ultimate controller of your project. You’re dealing with somebody who’s been given the responsibility, but not the authority.
That’s another thing: if I could recommend to big companies, try to put that authority down closer to the relationship so that if the little company says, you know, “we could use a little bit of help here” the person that they are dealing with could actually make that happen. Does that make sense?
Pam Harper: Jim, you are so right. We’re going to talk more about this, but first, we’re going to take a quick break. So stay tuned, and when we come back we’ll talk more with Jim Blasingame, the Small Business Advocate, about how we can create even more effective relationships with our partners.
Scott Harper: This is Growth Igniters Radio with Pam Harper and Scott Harper. Brought to you by Business Advancement Incorporated − on the web at BusinessAdvance.com.
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Scott Harper: Our questionnaire will help you find out where to begin to focus your energy and resources so that what should be happening, really is happening is faster and more effectively.
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Scott Harper: So don’t miss out − go today to GrowthIgnitersRadio.com and select episode 110. Scroll down to resources and click the link download Five Questions to Ask When You Need to Move Even Faster.
Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper and Scott Harper. Over the last two segments Scott and I have been talking to Jim Blasingame, author of The Age of the Customer, and host of The Small Business Advocate Show about increasing the value of small company – large company partnering.
Jim tell us again how people can find out more about you and your book and the radio show.
Jim Blasingame: Thanks, Pam and thanks Scott. Folks, after you’ve gotten all the genius out of Pam and Scott’s resources, come to me at smallbusinessadvocate.com. You can find more about my book at ageofthecustomer.com. And Pam, hopefully in a few months I’ll be able to talk about my fourth book coming out; it’s on ethics. I won’t tell you any more about that; I’ll give you a little teaser.
Pam Harper: Okay. Well, we’ll have to talk more about that. So, let’s go back to our conversation.
This is the part of Growth Igniters where we talk about the immediately actionable ideas. People finish listening and they say okay now what am I going to do? You were spot on when you were talking about the idea in the last segment about the need for authority in partnering relationships to be with − Especially in the large company but in the small company too − with the people who actually have that accountability for strategy and culture as well.
Scott Harper: Yeah. A more strategic approach to the whole thing.
Pam Harper: Is there something else you would recommend with a regard to that?
Jim Blasingame: Well, the first thing I would do, is I would say, “okay what do we offer our customers?” Whether it’s to seek alliances or whatever. This is good for all your businesses. “What do I offer my customers right now and what does it do for them?” Of course we’re talking business to business here. Some of what I do might not be, to say, deliver a wrench that someone can pick up and use. It might be an idea; it might be some content; it might be something that serves as the nexus between a big customer and a sector that they’re trying to reach, and you are good at that. So the first thing I would do is say, “Okay, when we deliver our nugget of value to them, first is it relevant to them?” Not of competitive advantage, because as you know, Pam and Scott, I believe today people are looking for relevance first and competitive second. So the first thing is, are we relevant to them? Because if we are relevant to them − we’ve looked at that, and we know we are relevant to them − that means that price is not going to be the first thing they look at.
Scott Harper: Okay
Jim Blasingame: Color, selection is not going to be the first thing they look at. The more we can be in their relevant sweet spot, the less likely we are to be beaten by a competitor. Because we’ve wheedled our way into their hearts by being more relevant. That’s something that’s hard for a competitor to compete against you on, because you are in there in that business under specifications that are deeper than an RFP.
Pam Harper: That’s definitely true Jim. If it’s not outsourcing if, let’s say that there is no RFP but in fact there is a discovery that we could create a new product or service jointly for a customer, that it’s relevant − we are in that space. You mentioned how important it is to make sure that the people at the top or whoever it is making the decisions about strategy, of both partners are participating in the relationship. Is there anything else that you think would be important then, in creating that more valuable relationship?
Jim Blasingame: Well, and I know I sound like a broken record, but let me just say this. Everything − and this applies to almost everything that we do, everything that you are supposed to do tomorrow, or a week from now, or a year from now, everything − is inside of a customer’s head, a prospect’s head. Your customers, your big business customers, your strategic alliances or your outsource customers or whatever you want to call them − they have their own prospects; they have customers. I would do everything I could do to find out what is inside of their heads. Because whatever their expectations are, that’s what they are looking to your customer for, and your customer might not even know that.
Scott Harper: Yeah.
Jim Blasingame: See this is again back to the relevance. If you want a silver bullet that will wind up turning into a fish hook into that customer that will never let go, it’s finding out what your customer’s customer wants, expects, from them that they might not know about. Or if they know about it, they’re not able to deliver it as elegantly to that sector as you can. You fill that gap. Notice I haven’t said one thing about price, or product, or color or delivery. In my opinion, that’s the level of the sweet spot. That’s what the special sauce is that will allow you to get in there. I don’t have a turn a dial here, turn a dial there, I really think, because it is different for everybody.
Scott Harper: Sure.
Jim Blasingame: I think the problem people are having right now is they’re missing how to put the special sauce together.
Scott Harper: Right. So what you are talking about is really − as you say − getting inside the head of the partner, and that requires the willingness of both parties, both sides, to do that. To have that kind of a conversation that gets to be more than transactional requires a cultural fit. They have to be willing to do that. So how can a company get a feeling for whether they are actually going to be a good fit for a potential partner? Because possibly if they’re not, it’s better to pass that by and try to find something else.
Jim Blasingame: Oh yeah. No, I agree with that. But you may not know that. But one thing about the cultural thing is the best customers I ever had were the grumpiest ones in the beginning.
Scott Harper: Okay…
Jim Blasingame: I found a way to make them happy by doing what I said earlier. They really didn’t want to be grumpy, it’s just that nobody was giving them the special sauce. I think you can change the relationship of your culture. You may start out with a company that doesn’t have a perfect culture, but I think you can change that because if you can go to that customer, that prospect, that bigger company you want to do business with − if you can go to them and say “let me ask you a question, how are you taking care of your customers when they ask you for this or that?” You should already know the answer, because you are probably going to see a furrowed brow or your going to say “well you know, it’s funny you say that we’ve been wondering about that ourselves”. Then you say “what if I told you I have some ideas?”. See what I mean? In other words preempt the RFP. You write your own specs.
Pam Harper: That’s right. So what you are really talking about Jim, what I hear, is the importance of trust. Developing that trust. Is that right?
Jim Blasingame: Wow. Pam, it’s the foundation of everything. If you don’t remember anything else that we’ve said today folks, remember this: trust is not just the right thing to do it’s a businesses best practice.
Pam Harper: Absolutely.
Jim Blasingame: Because if I can trust you, Pam and Scott, that means I don’t have to worry about whether we are going to get our job done. I can drop my keels and go to work.
Pam Harper: Trust makes it much faster also, to come up with the right thing to do. To figure out how we can work together collectively and be in the best interest of our mutual customers. So that the best things can happen.
So Jim, do you have some final thoughts that you can share with us on creating new value − small company and large company together?
Jim Blasingame: Well one thing about it is − if you are a small company, and a big company is entertaining doing business with you − there’s only one reason, otherwise they don’t need you. What can you do that they can’t do? What is the core competency that you have that they don’t have? You’ve got to remember that. So don’t necessarily try to be bigger, because they’ve got bigger, they’ve already got that, they can call those people. Find out what it is, what is the sweet spot, what is the special sauce that you can deliver? That the only reason why they would consider you and value that, and promote that, develop that. Find a more elegant way to deliver that, and if you do that, you will have customers that you can’t run off.
Pam Harper: Good thoughts. Jim as always, it’s a pleasure to have you on. We look forward to our next conversation.
Jim Blasingame: I’ve enjoyed it. Thank you for inviting me. I always have fun with you guys. Keep up the good work.
Scott Harper: Thanks, Jim, and thanks to you out there for listening to Growth Igniters Radio with Pam Harper and Scott Harper. To check out resources related to today’s conversation, share on social media, read Jim’s bio and the episode transcript or open a conversation with us, go to GrowthIgnitersRadio.com and select episode 110.
Jim Blasingame: Until next time, this is Pam Harper…
Scott Harper: And Scott Harper…
Jim Blasingame: Wishing you continued success. Leaving you with this question to discuss:
Scott Harper: What new conversations do we need to start inside and outside our company so that we can get even more value from all of our partnering relationships?