Elected by a corporation
The CEO’s of small companies are always proud if they receive an order or proposition for cooperation from a large company for development or R&D purposes.
However when a large corporation addresses to or asks a small company for researching or developing a specific solution, this is not because the large company can’t develop it or misses the capacity to develop it, but merely to avoid internal problems such as:
- Writing the business plan for the new development
- Getting the budget approved
- Avoiding internal politics
- Wasting time over a long procedure to get a new development started
- High research or development costs that needs to be justified
Benefit for the corporation
The small company can probably research into or even deliver the required solution much faster at a lower cost without all the hassle of the hierarchical organization of the large corporation. Moreover the large company could get the research or development done at a very low price by teasing with the carrot of possible large orders and a long time cooperation.
Although the perception of the CEO of the small company is that they have been elected for their quality or professionalism of work but actually it is just to avoid any problems or major delays for the research or development of the new solution.
Contract – agreement required
Hence the CEO of smaller companies should think twice and negotiate a contract or agreement with the larger corporation in order to really be able to reap the benefits from the research or development done for the large corporation. Moreover the efforts should be paid for – and not given away for free. If the solution is crucial to the corporation and proves to be successful, it is likely the corporation will go over to an acquisition.
Has any cooperation with a large company brought you any benefits?