By Norbert Rau, Raucon

How often have you received an interesting business opportunity offer from a person or company totally unknown to you, and how often did you think that it would be easier to assess the offer if you would know the person? 

This is exactly what happens when the subject of an offer is a low definition item. Contrary to a high definition item, e.g.digital camera or laptop which is within everybody‘s grasp, a low definition item such as a license deal is not immediately understood, needs explanation and communication.

When a low definition item, e.g. a business opportunity, is offered by an unknown person, the recipient‘s need for explanation is only surpassed by the doubts about the sender:

• Who is that person? Qualified? Reliable? Trustworthy? What can I expect from this person? What will my colleagues say if I mention that person‘s name?
• Will that company be an adequate partner for us? What about their reputation, their technical and scientific skills, their economic standing?
• What is in for me if I champion this offer within my company? Will a collaboration with this company or this person be efficient, smooth, enjoyable? Or will it be inefficient, stressful, frustrating?

The answers to these questions can only be found face-to-face, not long distance.

A decade ago, when internet and e-mailing were already ubiquitous, when teleporting and videoconferencing were being introduced on a broad basis, and when smart phones and other tools were on the horizon, it seemed that personal interaction and, therefore, business travel would become a lot rarer. Dozens of online IP and technology exchange sites were created, but the fluidity that they were originally anticipated to bring to the licensing process was just not happening. And airline travel increased as fast as online communication increased!

Some time ago I heard an interview with a top executive of a well known air line. When he was asked how the internet had affected business travels, he answered: “The number of business travels has increased much more than we expected. We believe that the internet facilitates and accelerates contacting, but it does not replace physical connection, hence there is more travel now.”

In a recent Business Week article (January 28) the investment banking chief of Credit Suisse is cited with the words: “…in a global world you have to spend time with your clients and show commitment when it comes to joint ventures, mergers, and alliances. The key is thoughtful travel – travel when necessary.”

All this only describes the obvious fact, it does not explain the deeper reason for it. The reason is that collaboration and partnering requires mutual trust. Collaboration is trust business. But trust is not present among strangers. Strangers do not share valuable knowledge. Strangers are not committed. And the persons involved remain strangers when online contact is not followed by face-to-face meetings.

In one of his last books, Management Challenges for the 21st Century (1999), the late Peter Drucker explained this in his unsurpassed style: “Long distance information does not replace face-to-face relationships. It makes them actually more important. It makes it more important for people to know what to expect from one another. It makes it more important for people to know how the other person actually behaves. It makes it more important to have trust in one another.”

And it is not only about meeting people face-to-face to discuss actual business opportunities. It is also about meeting new people who might one day prove useful. To build up trust before a business opportunity turns up is an excellent time-saver later on. And a time-to-market issue.

In this regard I always wonder why a small number of EuroPLX Meeting participants does not stay at the conference hotel, but elsewhere. They trade off the numerous opportunities to meet old contacts and new people in the elevator, in the lounge, during breakfast, in the gym, or at the bar. Because they, or their accounting department, want to save 50 or 100 Euros in accommodation expenses (less 20-40 Euros for the taxi) by booking in cheaper hotels.

That is an expensive trade-off, indeed. Controllers, pay attention!

For more details about Raucon’s face to face partnering meetings, visit the EuroPLX website.