Do you recall your first business development meeting with a corporate CEO?
You were over-prepared. Your head was full of facts and figures. Your expectations were unrealistically high, and you probably were unaware of the mistakes you made that hurt your cause. That’s my guess, anyway, based on personal experience.
I started my career working for a private civic organization comprised of 100 business leaders making positive changes throughout the region. For nearly ten years, we worked to develop private and public partnerships. When I changed jobs, I thought I was more than equipped to negotiate deals with the “C-suite” (CEOs, COOs, CFOs, etc.). The truth is it would take me many more years to feel comfortable in that space.
What follows are insights from my economic development journey.
Myth 1: “I Know How to Sell”
I have directed business development teams in four states. In each, I scrutinized results to understand why some people were just better at meeting with C-suite prospects than others. In one state, I decided to conduct a personality assessment of all 200+ employees and our business-ambassador partners to pinpoint the skills known to be needed for good sales meetings.
There are basically four. It is true what they say about first impressions: you need to be able to break the ice and make people feel comfortable at the start of the meeting. Next, a good salesperson knows how to ask the right questions and introduce information without making the other person uncomfortable. Third, it is critical to be able to step back, to see patterns, judge character, read nonverbal cues, and know how to guide the conversation to the right place. Finally, one needs to know how to close, be clear about next steps, and diligently follow up after the meeting is over.
I was able to determine which of my staff and ambassadors possessed each of the above skillsets and to what degree. Surprise! Some people buried deep in the organization scored highest in some areas. With this in hand, I formed business teams with the right mix of skills, conducted training, and scheduled prospecting calls. Yes, some egos were bruised, but when it generated immediate results, esprit de corps skyrocketed.
On the first mission with our newly trained delegation, we met with the full C-suite of executives of a Fortune 100 company. The company had manufacturing operations in 26 states, but none in our state. When we learned that there was long-standing anti-union bias for conducting business there, we were able to have an honest conversation with the C-suite that raised and resolved these issues. The company explored their unthinkable scenario and moved forward with construction of its most advanced manufacturing facility in our state.
No one person, not even the Governor, could have made that possible, but a carefully selected team did.
Myth 2: “I Must Tell to Sell”
The economic development professional welcomes any opportunity to promote the competitive advantages of doing business in the community they represent. Most are talkative and possess an excess of confidence. Add to this a healthy amount of enthusiasm. What could possibly go wrong?
The seasoned economic developer is aware of when they are coming on too strong. They know the hard sell approach is always counterproductive.
Successful conversations with those in the C-suite require active listening and careful questioning. If you respond well to this approach, then you have a shot at building a trusted relationship upon which deals can be made.
You Are Not Listening If You
Myth 3: “We are Just Talking Business, Right?”
Regardless of who calls for the meeting, there will always be two issues vying for attention on the agenda: information and influence. The sooner you identify what they are, the more at ease you will be in navigating the dynamics of the meeting.
The information that the corporate executive of a larger company seeks from you is validation of what s/he is hearing from their own people—and it often has nothing to do with your economic development objectives. The information you need most is more straight forward but equally as elusive: you simply want to know if the business is in position to grow and what it will take for that business to invest its resources in your community.
Influence is what each partner in the dance can do for the other. The CEO knows that you will never get what you want (commitment to invest) without their consent. With every word you speak, the CEO is calculating what use you might be to the company in the future.
The larger the company, the more sophisticated they will be in understanding who and what stands in the way of growth. The smaller or more local the firm, the greater your influence becomes, perhaps help to secure changes to zoning, timely approval of permits, support for land acquisition, or improved public infrastructure.
I have participated in many meetings between governors and CEOs of multinational corporations, both stateside and on overseas missions. A second language is always interspersed in jovial code. It has to do with inside-baseball politics and banter surrounding personalities that appear to be complicating change for the better.
At this level, the bartering of information and influence is more direct. The in-state issues are usually identified in advance. The sticking point that brings the governor and CEO together typically hinges on pesky regulatory issues, policy, or pending legislative matters that represent real money. The influence of one or the other (governor or CEO) is needed to break logjams that stymies what is usually seen by both as opportunities for growth and profitability. An invisible tally sheet of who owes who is memorized. This is the nature of politics. The party who takes more than they give will not be invited back to the dance.
Myth 4: “Incentives Matter”
Incentives sometimes matter, but not always, and never as much as expected. Dozens of far more important factors, both qualitative and quantitative, are considered before a community makes the short list of locations to do business. Attention to incentives usually comes later, and often as icing on the cake to defray costs to establish operations.
Unless the question is posed directly of you, my advice is not to lead with talk of financial incentives. Most CEOs cannot be bothered with such matters. They leave it for lobbyists, tax accountants, and others to worry about.
Focus instead on figuring out the company’s strategic game plan. Years ago, I was in Paris to meet with the COO of a company that had just been awarded a major contract from the U.S. federal government and was in expansion mode. I actively listened to this gentleman wax poetic about his company. He was enjoying himself and it seemed obvious to me that he had no plans to play along with the economic development pitches that he was hearing from others like me who paid him homage.
Toward the end of our time together, I pulled out a detailed competitive benchmarking analysis I had commissioned. Instead of sharing the full report, I turned to a couple pages that laid out the return on investment for expanding his U.S. facility at its current location versus benefits if the company relocated to the state I represented.
A good poker player does not show his hand, but by going silent, he did. Once I was out on the street and walking away, his assistant ran out of the building, stopped me, and asked for a copy of the analysis. I told her I would gladly provide it at a second meeting. Several more meetings took place before the company decided to relocate to our state. They thrived at the new location and employed nearly 1,000 workers.
Know what matters before you agree to meet.
Myth 5: “I Need This One”
When the hunt is on, it can be hard to pass up a sure thing.
I recall a weekly deals committee meeting where my VP of business development presented his case for providing financial incentives to a fast-growing cyber security company in the most prosperous county in the state. He argued that it was a no-brainer, that the ROI calculations showed that the State would recoup its investment within two years.
I had just two questions.
First, how many other hot cyber security firms were there in the state (hundreds) and would we set precedent such that each could expect similar treatment? This firm flunked the most basic hurdle of economic development: the “but for” test. But for our assistance, would they choose not to locate in the state? The answer was that they would do so anyway. My VP was not obliged to offer financial help but did so because that is what he said economic developers do. (Truth is, without it, he thought his group might not get credit.)
My second question was how well it scored against our established Principles for Investment. We established a dozen or so principles for what we hoped to achieve with our technical and financial support. They went beyond ROI and included needs and benefits to the community, fairness and equity standards, impact to the environment, ability to measurably diversify the economy, and so forth.
As a committee, we would refer to the principles when deadlocked and rank the project against each measure on a 1-10 scale. The exercise demonstrated groupthink and pressure to announce victory runs afoul of common sense. Without principles, you have problems. We rejected that too-good-to-be-true deal. (In an earlier piece for The Navigator titled “Economic Development as a Force for Good,” I wrote “but for” logic is being replaced with “who for?”)
As economic developers, we need to practice active listening, accept the help of others, and be open to challenging our beliefs and habits of trade. We need to develop principles that serve as guard rails and be prepared to go in a different direction if the road is not leading us to the right place. Effective CEOs do this regularly to sustain their own personal growth and that of their businesses. If you can become proficient in this kind of language, you will have better meetings and succeed.