The Hidden Value of Embedding With Your Strategic Partner

strategic partnershipIt usually takes a huge effort to get the attention of a big strategic partner and impress them enough to get a formal partnership. In fact, might have you read my articles titled “A Secret to Securing a Strategic Partnership with a Major Player” and “Get the Strategic Alliance Partner to Come After You” and they worked. Either way, congrats. Unfortunately, at that point you’re still only half way to fully exploiting the relationship. You might get some interesting press attention right after the announcement and your employees will certainly be proud of the accomplishment. But that doesn’t mean your revenue production will suddenly shift into a new gear. In this article I’ll explain how to significantly increase your leverage by embedding with your new strategic partner.

The Concept

Embedding essentially means having one of your employees work from one of your partner’s offices. Their headquarter building or campus is often ideal but sometimes another location is better, depending on the nature of the partnership and the key organization(s) involved on the partner’s side. The work schedule can be part-time or full-time, depending on the level of activity and the overall responsibilities held by the person you plan to embed. This employee will literally have a cubicle or desk at your partner’s office, just like some of their contractors and consultants.

Your embedded employee will participate in regular staff meetings and various other project-oriented meetings that specifically relate to your partnership. Outside of that, they will simply conduct their regular course of business from within the walls of your partner’s office.

The Bigger the Better

The bigger your partner is the better this embedding concept tends to work. Some of the reasons are outlined below:

  • Big companies are usually organized into product-oriented business units or divisions and they often know little about what’s going on elsewhere in their own company
  • Big companies spend so much time and energy focused on their internal projects and their traditional competitors that they easily lose sight of innovative advancements in their industry. This is especially is true with their lack of understanding of new startups and early stage entrants that haven’t yet reached $5M in revenue.
  • Employees of big companies run around all day between meetings and conference calls
  • Big companies have lots of contractors and consultants that work from their office, which means they are used to non-employees being amongst their ranks

Later in this article when I describe the value your embedded employee can bring to the partner, you’ll see better how these issues come into play.

The Value to You

Much of the value is probably already obvious to you. Your company’s ability to be influential and responsive to the partnership couldn’t possibly be better than working within the same cubicle farm as your counterparts from the partner. You will immediately know about good/bad news that affects you and you will get a keen sense for the overall value you are bringing the partner (or aren’t).

What is not as obvious until you experience it is that your embedded employee has an opportunity to become “just one of the guys/girls” in the office. It means they get invited to grab lunch or happy hour with your partner’s employees, they hear company rumors and upcoming announcements, and they become a familiar face with the partner’s executives. The overall benefit of these things often can’t be measured because it’s so huge.

  • What is the value of knowing your partner just launched a secret program that you might also be able to enhance with your offering?
  • What is the value of learning that a year ago your partner tried to develop what you have but the effort failed and they quietly shut it down?
  • What is the value of discovering that your partner is considering making a strategic acquisition in your market space?
  • What is the value of learning that your partner just started debating bringing on additional partners in your same product category?

You get the idea.

The Value to Your Partner

I’ve had two different experiences with a member of my business development team embedding with a strategic partner. In one instance the time on-site was part-time and in another it was full-time. But in both cases I was surprised how much value our embedded employee was able to provide to the partner. Of course, just being more responsive to the needs of the project is a benefit to the partner but that’s not what surprised me. I underestimated how our embedded employee could help with some of the “Bigger is Better” issues listed further above. For example:

  • Knowledge Gap Filler – I mentioned how big companies struggle to stay connected with what’s going on in other functions or product divisions of their own company and have low awareness of new innovation/entrants in their market. Your embedded employee can help fill those gaps. She should make a point to get to know the other relevant product divisions (maybe your partnership touches more than one anyway) and use the information gained to serve as an internal consultant of sorts. She can do the same for information about new innovation in the market.
  • Action Item Offloader – Your embedded employee will hopefully be busy but if she can be trusted to offload some of the action items of her partner counterparts, it not only helps your partner keep things moving on schedule but allows you to influence the outcome. Gaining this level of trust is huge.

Ready to Move In?

Not so fast, you have to earn the right to become embedded as I describe above.  You will probably have to take a crawl-walk-run approach.  Here is an example sequence of events to give you some ideas to try:

  1. In the beginning of the partnership, have as many in-person meetings as possible at the partner’s office.  That way, they get used to seeing you there.
  2. On a day when you’ve got a meeting scheduled, ask if you can come a little early or stay a little late to take an important conference call
  3. Find ways to get invited to grab lunch with your partner’s employees – in a casual, non-business sense, which might mean the company cafeteria.  Or maybe a happy hour after work.  In this, you’re trying to be perceived as just one of the guys/gals in the office.  So don’t force business conversations, just be natural.
  4. Increasingly ask if you can work from the partner’s office for a half-day or a day with some justified reason that includes other meetings you have with the partner.  This works especially well if you have to travel to another city to meet with your partner.  In fact, in that case you might be able to ask about working from their office for 2 days.
  5. You’ll know when the atmosphere is right to ask if you can get an assigned cubicle to call your own

Other Tidbits to Consider

  • Conflicts – If your company has other partnerships with direct competitors, you surely won’t be allowed to embed. That doesn’t mean you should pursue exclusive partnerships (see related article titled “Exclusivity – Run Away or Embrace?”).
  • Confidentiality – Be very careful with any confidential information your embedded employee learns. The quickest way to lose trust that can destroy your partnership is to leak confidential information or use it for purposes not intended by your partner. And believe me when I say that your embedded employee will hear all sorts of things that should not be shared publicly.
  • IT Security – Your embedded employee will almost certainly be required to adhere to your partner’s requirements for IT security, which could mean that monitoring software must get loaded onto their laptop or other similar measures for protecting the partner’s sensitive information and overall IT infrastructure.
  • Reverse Eavesdropping – Just as your embedded employee is able to hear discussions and debates amongst your partner’s employees, they will hear her phone conversations that aren’t taken from a private office or conference room.

Summary

Embedding with a strategic partner is a luxury that does not often happen. It must be earned based on trust, confidence and the mutual expectation of a very beneficial partnership. If you get the opportunity and are able to afford the resource, don’t accidentally screw it up.

Related Reading

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Author: Gordon Daugherty

Over the past 15 years Gordon has seen nearly 1,000 startup pitches, advised more than 200 entrepreneurs and been involved with raising over $45M in growth and venture capital. Throughout his 28 year career in high tech, serving twice as President and three times as CMO, Gordon has both an IPO and a $200M acquisition exit under his belt. Now his emphasis is purely focused on helping startups and early stage tech companies. Through his Shockwave Innovations advisory practice and as Managing Director for Austin’s Capital Factory startup accelerator, Gordon is an active angel investor, VC and startup advisor.

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