Thursday, July 15, 2010

Establishing and Strengthening Corporate Relationships

A colleague has asked me to address the most effective means of establishing and strengthening corporate relationships. A corporations view of giving is conditioned by profit-making imperatives including the discipline of calculating return before making an investment. In other words, corporations will not invest in open-ended processes; they will expect your institution to project specific, measurable outcomes in its gift proposals. If they believe those outcomes are consonant with their corporate objectives, they will contribute.

There are three major reasons that corporations support universities:

  1. To improve their recruitment efforts.
  2. To gain early access to research findings.
  3. To promote buying habits among young adults and move their product.

In the past few decades, the first has been the greatest impetus for corporate giving by a wide margin but it does wax and wane with job growth potential in that corporation’s particular sector of the economy. Science-based or technology-driven companies align with universities to get an early look at new knowledge but tend to affiliate with the disciplines and departments that they see as most germane to their product development rather than with an entire institution. Coca-Cola is an example of a company that supports universities but usually through contracts to secure exclusive pouring rights on various campuses with the assumption that such contracts will drive up student consumption which, in turn, will lead to long-term brand loyalty.

In the case of non-profits, corporations may give to strengthen their brand or soften their image. Many give from community funds to demonstrate corporate citizenship but those kinds of grants tend to be under six-figures and awarded to numerous organizations.

When instigating or broadening a relationship with a corporation, then, it is important to have a deep and detailed grasp of its business objectives and to be well prepared to show how the activities and aspirations of your institution align with them. The place to begin is with an institutional inventory of various points of interaction with that corporation including:

Are they employing our students as interns or co-ops? How many students do they recruit each year? What percentage of them are former interns or co-ops? How many of our graduates work for them? How many are in senior positions?

Do they have any consulting or research relationships with any members of our faculty?

Are they a vendor? What do we spend on their products or services each year?

Is there any crossover between the members of our boards?

Do they lease any of our conference space, athletic facilities or avail themselves of other campus services.

Are they corporate sponsors of our athletic department?

The more of this information you can gather, the better you make this case: “Our institutions are already aligned and interdependent in a variety of ways. It is our mutual interest, therefore, to cement this relationships and, wherever possible, make it more strategic and productive. Here are several ways. With an investment of x, you can expect the realize the following objectives...”

If you are effective in making this kind of case, your potential corporate partners will approach the gift agreement negotiation like a business deal. They may ask very specific questions about the degree of recognition you will provide including naming rights, publicity, events, and access to alumni and faculty. It is profoundly unwise to humor a potential business parter, to go along with their requests while not being sure if you can fulfill the terms or somehow hoping they may not be so demanding after they make a gift. Be prepared to negotiate in the style of the buyer, forthrightly and in considerable detail. Since campus and corporate cultures can be very different, make sure that all key campus stakeholders are comfortable with the arrangement before it is announced to the campus and the public. Many a potential corporate gift has come undone at the last minute when outspoken members of the faculty raise questions about the process or the prospect of infringement on academic privileges or academic freedom. These last minute blow ups are damaging to all involved and often lead not only to the withdrawal of the gift from the negation of the possibility of future partnerships.

If few or no connections exist between your institution and a corporate neighbor, one of the best ways to build toward a broader alliance is through the establishment of a student internship program. If your students acquit themselves well in these positions, the corporation is apt to expand the alliance and, as they do, become more inclined to hire interns into full time positions when they graduate. And the more students the corporation hires, the more it will come to see your institution as a preferred provider and seek to strengthen the relationship.

If you do succeed in developing corporate partnerships, your institution will have to accept, respect, and make long-term adjustments to business practices including the expectation of detailed analyses and performance reports about the program they have supported. In addition, most corporations will expect, and the best university corporate relations offices will provide, one-stop shopping. For instance, corporate executives will expect to make one call to one person at your institution and have him or her coordinate an extended agenda that will cut across various lines of internal authority including research reviews by the faculty and briefings from various academic administrators, lab or facility tours, and recruiting interviews with the most accomplished graduating students. In other words, don’t pursue strategic alliances with corporations without first establishing a centralized means of managing those relationships. The coordinator of a corporate relations office must have the authority and support of various campus claimants to forge a common agenda. Corporate executives will have little tolerance with layers of administration, highly decentralized decision-making, slow responses, and weak analyses.

Yes, there really are many examples highly productive strategic alliances between universities (and other non profits) and corporations. When executed correctly these alliances can be highly complementary and bring out the best in both cultures. When done naively, they can lead to no end of misunderstanding and friction.

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