Understanding the Motivations of Big Company Operating Managers

And the Secret to Working With Each Type

This is the third in a three-part series on strategic investors and startups.

A strategic investment in your startup means you now have a new co-founder. Business is all about relationships, and you are now in a new relationship.

Every strategic deal has an operating manager who is the big company champion for the investment. He made the decision to invest, and he is accountable to his boss for the investment.

You wanted his money and market, and he wants an innovative product to grow his revenue and make him more competitive. This is the basis for the relationship. Or so it seems.

Why is this guy really doing this deal with you? Here’s what you’ll encounter.

Wants a Puppy

This operating manager likes the idea of being an entrepreneur. Mind you, he isn’t one and never will be, but he wants to think he is. While he needs the big company security, he wants to dabble.

This person shows his motivation early. He loves to brainstorm on the product. He loves casting his vision and ideas but is focused on product and light on the market. He enjoys dropping by to just talk. He seems to have more time than you do.

Remember that his job is to provide distribution and customers. So it is your job to redirect him and keep him focused.

Wants a Show Dog

This operating manager is working to satisfy his boss. The big companies are being advised by their highly paid management consultants to seek innovation by partnering with startups. Because of this, working with startups could be considered trendy to some managers.

These managers are motivated to work with your startup so they can include you in their strategy document. They will invest their money, but their heart isn’t in it.

You can identify this manager because he seems distant. He will lack any direct involvement. He will delegate the new partnership to a direct report who lacks passion for the idea.

You now must build a relationship with your new co-founder by building a relationship with his direct report. Not possible.

Manage the direct report to build your company. If he follows your lead, great. If not, move on. Do what you know is right for your company.

Wants a Hunting Dog

This is the best co-founder of the all the operating managers. He knows what he is good at and respects you for what you are good at. He is crystal clear on why he invested and will do all he can to succeed.

His goal is a successful pilot. He understands this means gaining the cooperation of his salesforce and customer base with the ultimate goal being broad market acceptance.

The startup and the operating manager have different definitions of success. You may be thinking ten customers using the product. He may be thinking one hundred.

Relationship Building is Critical

The operating manager works for a multi-billion dollar company with an established brand and a reputation he must protect. Your job is to help him achieve this.

Make getting to know your big company operating manager a high priority.

If you are in it for him, you can be sure he is in it for you. You are a part of the family, not just an investment. When this happens, you can be sure you will build your startup together.

Be sure you understand who you’re working with and what you are trying to accomplish together.

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4 thoughts on “Understanding the Motivations of Big Company Operating Managers

  1. Charlie,

    Like all your posts this one is interesting and well written, and after many years in the corporate world I’d add one more kind of manager — the one who bought a toy for his kid.

    The marketing head of an operating division sees a strategic advantage (usually marketing or technology but sometimes just because of the brainpower) they can gain by adding your company and makes the case to the divisional or corporate financial people, who agree to let him buy the new “toy”.

    The acquired company now as two missions: To keep the operating executive who advocated the purchase happy with the new plaything, and to make sure that the financial goals of the more senior people are met. These are not always congruent goals and I’ve known of acquired CEO’s who overlooked one of those two missions and who were punished for the oversight.

    The moral is that the acquisition is not an end point for your company, and if you want to preserve the ongoing jobs of your employees and the integrity of your business you cannot overlook the corporate dynamics that brought you into the fold in the first place.

    Steve

    • Thanks for the comment. You are right. I think this explains to the Startup CEO that he may never be clear of the politics in the big company or the motivation of the operating manager. Strategic relationships are complex.

  2. Charlie,
    Good series. Is there a way to determine the the motivation or “archetype” of the manager before pen hits paper? Or are you saying here that the manager will show his hand well before it is too late?

    Chris

    • I think you will find the big company manager will show his hand long before you sign the deal.

      I find that startups are so excited to do a deal with strategic investors, or they have to do the deal because they absolutely need the cash to live, that they look past the manager. But after the deal is signed they are “stuck” in what might be a bad marriage. This would be poison.

      You can size up the manager in a couple of ways. One: Determine what motivates the person based on their behavior. Two: Match the behavior to what he says in conversations to really zero in on his motivation.

      Hope this helps. Thanks for commenting.