Negotiating a networked business.

Networked business jigsawLast week I wrote that extreme competition is one of the two big trends in business to business (B2B) relationships. This week, as promised, I’m explaining what I mean by the other trend: extreme collaboration.

There’s an increasing trend, especially among small businesses, not to grow by hiring more people, but to partner with a wide range of other businesses, agencies and freelancers, gaining access to those skills in a much more flexible way. And that trend is giving rise to new type of business model: the networked business, which in turn, needs a new paradigm for B2B negotiations. Genuine networked businesses differ from traditional, bi-lateral relationships in four important ways, each of which has implications for the way you negotiate.

Business can come into the network at many different points: the copywriter might engage the web designer, or it could be the other way around; work flows in both directions across each of the relationships. Keep competition within the network to a minimum: playing-off a stable of PR experts to get a slightly better price is naive, if it turns out that one of them holds the keys to your next big project.

Opportunities come thick and fast but half of them might not even get off the ground. Speed, flexibility and trust are critical in scoping projects and pulling together proposals. Negotiating a new basis for every project simply isn’t feasible so use flexible frameworks. For example “all pre-sale work is done for free, and everyone involved in the sale takes an equal share of the first 30% of the price”

Creativity should be a strength, because of the diverse nature of a network, but you can only leverage that strength if you meet, engage and openly discuss ideas, not just 1:1, but as groups. You don’t need a framework agreement, but you do have to have a deep trust, that ideas that emerge in, and after a session, truly belong to the group.

Marketing the others in your network has to become a constant “state of mind”. Each member needs to freely and actively promote and refer others from the network, it expands the net for new business and reinforces the trust and reciprocity that’s at its very heart.

Which of your relationships should be part of a genuine network?