David and Goliath – how the SME can play fair with the Giants
Posted by Rachel Flower / May 7th, 2016 / No responses
So these past few weeks we’ve been sitting alongside some of our favourite clients supporting them in meaty negotiations. (This is our idea of fun, btw.) As you know, here at Serenwood we specialise in working with SMEs and budding entrepreneurs, but we all came from a background of “Big Law” and big corporates so we’ve sat on both sides of the negotiation fence.
Picture the scene.
I’m sitting in this huge, intimidating conference room – all glass windows and orchids in vases. Just little old me on my side of a large shiny table.
On the other side, there are 6 unsmiling, corporate faces looking at me – none particularly friendly – and my smiles and attempts at banter are met with stony silence. So instead, I turn to sifting through the weighty contract docs. I’ve made a bit of a mess of pouring my drink so I’m trying not to drip coffee everywhere (and resisting eating all the free biscuits). I’m trying to look calm and collected, but I’ve got a long day of contract negotiations ahead of me and I’m filing through my internal brain compartments making sure I know the outcomes and key objectives I want to achieve for my client. Who btw, last minute, had to dash elsewhere, hence my solitary chair at the boardroom table.
No, it’s not a bad dream. This happened this week and actually, of course, it happens quite regularly and if you’re an SME venturing into the scary world of deal-making this will likely become a frequent occurence. The prospect of face-to-face contract negotiations with a large corporate is rarely anyone’s idea of a fun day out (Except ours that is – sad, but true). Especially when the stakes can be high, ready for your big break or the deal which can uplevel your business.
The huge challenge is that lots of SMEs and owner-managers feel like they are on the back foot from the outset. Before they’ve even started with the contract negotiations – the glass elevator, the shiny shoes, the Awards on the walls, the army of support staff serving tea and delivering post. Facing across from 10 people on the negotiation table and a couple of big shot lawyers charging £350 per hour with their armoury of legal-nuggets to screw you over.
Breaking News.
Listen up, because this is important. You DON’T NEED the small army and expensive lawyers to get through contract negotiations. What you do need is confidence, a positive approach and a plan. You need to know your stuff, be clear on the outcome you want to achieve, and be ready to walk if the game isn’t panning out how you need it to.
Let’s consider David V Goliath head-to-head contract negotiations. Did you know that Goliath has more issues than you think? Size isn’t everything.
Firstly, and this is apparently true, Goliath can’t see. He’s practically blind. In the biblical story, Goliath calls out to David in order to fight him. Lack of vision is not unusual for a large corporate too. With complex internal structures and reporting lines, there is often a disconnect between the commercial guys, procurement teams and the lawyers. They may be sitting on the same side of the table in the negotiation meeting, but they rarely have a full understanding of the complete deal from start to finish.
This is where you have advantage number one. You understand everything about your business, from ordering and delivery through to commercial pricing and supply-chain. So that’s 1 – nil to David.
Secondly, David is not a foolish, lowly shepherd. He is, in fact, a clever chap with a plan. Goliath turns up all kitted out for battle with his glittering armour, sword, spears and all sorts. David rocks up with a slingshot and a simple plan. He’s spent years protecting his sheep and he’s single-handedly looked death in the eye many times. So whilst Goliath is weighed down with all his gear, David is nimble and (who would have known it) he’s a skilled marksman. In other words, David focuses on what he CAN do, not what he can’t do, or what he doesn’t have.
That’s advantage number two and a powerful message to you SMEs. Don’t lose sight of your brilliance and don’t be fooled by negotiation tactics which are aimed at making you feel powerless, replaceable or just plain silly. The fact is that a large corporate has chosen to procure your goods and services. This should give you all the confidence you need as you enter your negotiations. They see value in having you on board – otherwise you wouldn’t have been invited into the glass elevator. And if you are still feeling just a little bit overwhelmed, then perhaps try a Superhero pose just before you enter the meeting room. Works for me every time. [Except when I get spotted doing it and have to pretend I’ve strained my back. ahem.]
Finally, and let’s be clear here, contract negotiations should not be a battle – it’s not about fighting one another, it’s about getting to know each other and finding out how you are going to work together. Collaboration is vital if you are going to build a strong and trusting relationship with your customers and suppliers. Unfortunately, I have been in negotiations where the other party is arrogant and even condescending to the smaller supplier. They do so at their peril in an age where small, innovative companies are bringing best of class innovation to the market; SMEs are doing all the clever stuff that Goliath simply can’t! David is not a clueless underdog – Goliath shouldn’t underestimate this.
Advantage number three – you are in control of your own decision making, and you can choose to walk anytime you want. No Big Bosses telling you “do that deal or else!” You decide if you want to work with those Giant Dudes, and if your intuition is telling you NO then pick up your stuff and get walking.
GO FOR IT
So now you are primed and ready for contract negotiations, feeling confident with or without a small army around you. Go for it. Enjoy the coffee and the biscuits. Have some fun showing off your business, your talents and your offering.
If you’re still looking for a bit of expert help (and moral support), then come and speak to us at www.serenwood.co.uk. We’re a friendly bunch of lawyer-types who don’t cost the earth and we just love to sit side-by-side with our clients in key negotiations. We can help you throughout the process, making sure you have a firm plan and strategy before you enter negotiations. We will join you in the pre-meeting Superhero pose and we will even pour the coffee (badly). Ultimately, we love to face up to Goliath heavy-weights – it’s what we do. Brilliantly.
P.S. If you enjoyed this blogpost, you can grab a copy of our free “Speedy Contract Review Checklist” here and get added to our newsletter mailing list for more free resources and tips in the future. We’re on a mission to help you get-savvy!