New Fortune report indicates the key factors in creating strong B2B relationships
Corporate culture is incredibly important in building business to business relationships, according to a report published by Fortune Knowledge group entitled 'Beyond the Brand – Why Decision Makers Buy Into Strong Cultures.'
In June 2015, Fortune Knowledge Group, in collaboration with gyro, a global advertising agency, set out to complete a worldwide survey seeking to know if corporate culture, or how a company is perceived by its corporate partners effects it business relationships.
The report surveyed 521 respondents who were directors or chief operating or chief marketing officers from around the world. All of the companies surveyed have annual revenues of $500m or more and 25 per cent have revenues of $1 to $10bn .The surveyed includes 40 per cent of respondents from the United States, 40 per cent from Europe and 20 per cent from Asia.
The findings stressed how important corporate culture is to maintaining good business relationships. In fact, up to 59 per cent of executives said that a corporate partner should 'stand for something' and defining what you stand for is key. A mission statement should be your guide, the survey found and a strong sense of purpose not only helps a company attract better quality employees but it enables employees to act more collaboratively. Sharing goals and being different are also highly valued and companies should also not be afraid of "being different,' the survey found.
"Companies make choices every minute about whom they deal with, and the best ones to work with are those you are aligned with in terms of values," noted John Stackhouse, senior vice-president in office of the chief executive at the Royal Bank of Canada in the survey.
In the age of big data, the report states that decision makers still rely on instinct or reputation or intangibles when forging a business relationship. The survey notes that 62 per cent of executives said "it is often necessary to rely on 'gut feelings' and that although data remains an important tool, it is the subjective factors and reputation that truly play the pivotal role.
Additionally, in a global economy there is still a great deal that is ingrained in the culture. Surprisingly, when it comes to ‘ emotions’, Americans are more swayed by personal feelings than Europeans, who tend to put less emphasis on whether a key business partner is widely admired, the report said. Sharing company values was less common in Asia Pacific companies than North American companies, the survey found.
There are some key ingredients to corporate culture that are universal, however, and the survey notes that 59 per cent of executives said that what a company stands for is much more important in choosing a partner than innovation or market domination.
Companies that abide by their mission statement, values, a narrative and founding ideas are more appealing to the majority of those surveyed.
Additionally, a strong sense of purpose helps a company attract better quality employees.
"If a company is not communicating its mission, then it will miss out on the next generation of rising stars, because the best people won't want to work there. People have to feel connected to the organization and feel there is a larger purpose overall. If you want to be passionate, they have to be aligned with the mission," said Kreg Weigand in the report who is currently vice-president of Internal Audit at Target.
Many of the respondents agreed that sharing company principles is good for business. Because the digital world demands transparency, social media can be an important tool for communication corporate culture the report states and 86 per cent of respondents agreed.
"Social media has a huge effect on corporate culture because it allows business to be human and sometimes even adds a bit of humor," noted Kate Healy, managing director, marketing at TD Ameritrade Institutional.
Finally, the report notes that because corporate ties can break, it is important to remember that lack of trust and internal policies are the major factors in relationships breaking down.
“We like to think of it as similar to a marriage; it’s all about mutual benefit and about being content with each other. As long as both partners see value in the relationship, it will continue, but you have to work to understand each other and communicate regularly. We immerse ourselves in the culture of our corporate partners,” noted Ashutosh Banerjee, chief marketing officer for Life Care Solutions at GE Healthcare in the report.
The report concludes that business decision makers buy into strong cultures. Establishing a strong culture and sharing it externally, will attract the kind of business partners who will remain loyal in years to come, the report concludes.