John Browne once said that BP should stand for relationships of mutual advantage, characterized by humility. What a profound statement of a company and its values! Wherever we turn in business, success is about relationships.
I use this phrase over and over again in trying to build partnerships. Sometimes I use it aloud in a meeting, sometimes I just keep it in my head. When I stick to it rigorously I succeed, and when I forget it, in the rush or arrogance to get things done the way I want them done, failure follows.
It is easiest to have a "relationship of mutual advantage, characterized by humility" with a peer company. If BP works on something with DuPont, there is mutual respect -- both companies speak the same business talk and have similar ideas of what is important, and the relationship has a good chance of flowing smoothly.
But when a giant company interacts with a small one, everything can become skewed. Mutual advantage often becomes taking advantage. Staff feel that learning is one directional and don't open themselves up to real two-way interaction. What should be a relationship seeks a different level, and becomes purchaser-vendor. The driver becomes price not value. And price is important, but it is not the same thing as seeking mutual advantage.
Even more difficult is big company-venture capitalist relationship. Here there is arrogance present in abundance -- or as some would put it, too much testosterone in the room to have a relationship. And what a pity, because there is so much learning possible on both sides. Big companies take time to understand markets, to analyze country risk. They see supply chains in a very integrated way. Big companies have access to large amounts of capital at lower cost, and are (or should be) skilled at managing the deployment of that capital.
Venture capitalists are good at other things. They analyze situations using very limited resources. They make decisions quickly. They nurture, yet they are very goal-focused. One might think that venture capitalists work on ideas when they are at an early stage and big companies only when they are mature. Not true, actually. What we find is that big companies are often starting out ideas in their research programs, but lacking the skills (or patience) to bring these ideas through to where they can make a material impact on the corporation. It is this gap that the venture community fills very well. A real relationship between VC and a big corporation can result in a lot of learning and a lot of value. But it rarely happens.
Another difficult area for relationships is between companies and universities. In most cases (and this represents hundreds of millions of dollars of spending each year, largely wasted) neither the company nor the university is thinking of it as a relationship. The company may be thinking grant, help for old friends, charity or cheap labor. The university may be thinking a new source of funding, getting out from under government processes for research money, patents and royalties from applied research. But if one really works at a relationship between company and university so much more is possible.
So how do we make it work? As with the relationships in our personal lives, by investing time. Talking and listening, and then doing it some more. Always thinking about what I am going to give my partner in this relationship that will make him want to give me more. Mutual advantage. Always recognizing that I am doing this because I can learn a lot. Characterized by humility.
When we set up the BP-Princeton relationship, which subsequently also involved Ford, we spent a lot of time talking with the Princeton faculty about the idea that this would be a relationship, not a grant with a report to us once a year. And they talked to us about their needs, and we tried to listen to this as well. But it was only after the contracts had been signed, that we all sat down for three days to work together on what we would actually do, how we saw the technical problems, and what our processes would be. At the end of those three days Princeton professor, Rob Socolow said, "Now I finally know what you were talking about when you said all that stuff about relationships."
About Leadership is a series of 52 columns on corporate leadership -- essential skills, leading teams, managing your career, the strategic and business practices to make a company and its leader distinctive from competitors. These columns will be of interest to people leading small and medium sized companies today, many of whom have not had much formal training in management skills and techniques; for the many people in big companies who aspire to senior management; and for anyone who thinks: Give me a hint, how can I do this better?