It’s Time for Joint Business Planning 2.0

Author: 
Ric Noreen

Over the last decade, joint business planning (JBP) between trading partners has been all the rage. Largely enabled by increasingly sophisticated category management powered by POS data availability, most B2B and B2C sales forces employ some form of these JBPs with their largest customers. While advancing trading relationships for many, there are still some common practices that prevent the plans from being true game changers:

  • Collaborative, they are not. More times than not, the “joint” plan is prepared by the supplier and presented to the customer to approve or modify. Because they are written from the supplier’s point of view, they favor their growth priorities and discount what the retailer or distributor’s strategies are for the category.
  • Not shopper or end-user centric. The plans tend to be product and activity focused, rather than derived from the needs of their mutual customers.
  • Short term in nature. Typically one year in duration, these JBPs are actually Annual Operating Plans (AOP) in disguise. Often weighted down by “rates and dates” this detail is critical for joint execution, but inhibits longer term big ideas from taking root.

So, imagine a plan freed from the shackles of minute metrics, activity calendars, sku-level detail and unilateral priorities. Rather, envision a plan that answers the question:
“What would a growth plan look like if we were one integrated company?”

The answer is JBP2.0 and here’s what it looks like:

A disciplined, facilitated process that’s equally shared, collaboratively developed and mutually invested. Yes, you’re planning in the same room!

Insights, and more importantly their implications, are the bedrock of the plan with points of intersections across the trading partners being built into sustained growth platforms.

They have a three- to four-year planning horizon. Year one functions as your detailed AOP, but also contains develop activities related to longer term growth platforms. The balance of the plan creates a continuous arc of business building activities.

The Process Framework

It all begins with insight and data collection and analysis, first independently, then collaboratively. Deep dives into consumer, category, competitive insights, followed by rigorous polishing by each partner will produce their contribution to the joint work session. In addition, each team prepares an overview of their company’s overall growth strategies and priorities for the category.The joint work session is where the magic happens.

Both trading partners devote one to two days to create the plan together. The planning team should be comprised of cross-functional subject matter experts/owners from the respective companies. This facilitated session begins with insight share-outs by each organized by topic, with points of intersection noted and implications drawn together. These implications form the basis of the strategic growth platforms.

A recent work session between retailer and supplier identified common insights and priorities around e-commerce; multi-cultural consumers; supply chain efficiency and in-store experiences as shared priorities and eventually evolved into joint growth platforms.

The Plan Blueprint

During the latter stages of the work session, insight implications will evolve into four to five growth platforms. These platforms typically fall into three basic categories:

  • Growth Infrastructure - Foundational platforms are defined here such as data-sharing, joint market research, supply chain efficiency and increased sales effectiveness. Most require cross-functional collaboration.Market
  • Market Development - Simply, these platforms are designed to create incremental demand. Optimized assortment, shelving innovation, integrated shopper marketing, digital development and targeted CRM are frequently seen.Innovation - These platforms emphasize collaborative development of products, packaging and merchandising solutions. They have longer development timetables, greater complexity and require co-investment and commitment but also have significant returns.
  • Innovation - These platforms emphasize collaborative development of products, packaging and merchandising solutions. They have longer development timetables, greater complexity and require co-investment and commitment but also have significant returns.

These growth platforms are “evergreen” over the life of the plan. Initiatives on each platform will be planned, commercialized, and launched each year, but the platforms remain constant. The nature of the plan is continuous with annual reviews recapping the current year, making timing or execution adjustments where indicated and, adding a new year to the planning horizon.

Operationalizing JBP 2.0

The key to sustaining commitment and execution of the plan is strong governance. Because functional representatives were a part of the work session, enterprise-to-enterprise connectivity should be fostered. At the top, the plan needs co-owners from each side. Each platform will also require co-owners as well. At the initiative level, single-side ownership of works best depending on the nature of the initiative, but teams will be formed to plan and execute.

To garner and maintain support for the plan, every top-to-top’s agenda should revolve around presenting the status of the plan and specific requests for resources or prioritization.

One-page plans should be created for each initiative, complete with team members, resource requirements, and development milestones and timetables. These plans should be reviewed quarterly and adjusted as needed. From a broader perspective, the timing of initiatives should be finessed to meter the market impact and manage executional capacities of both parties.

A Relationship Transformed

Collaboratively building a long-range JBP will transform a relationship between trading partners. It will establish the supplier as the clear-cut category leader and the retailer or distributor as most favored in the channel. Growth will be accelerated because strategic platforms will be developed and activated with initiatives not feasible for either partner to pursue individually. Growth will be sustained, as a parade of initiatives march across the plan’s horizon, replenished each year for each platform. And importantly, profitability will be enhanced as costs are shared across partners.

Indeed, two companies, one plan.

Ric Noreen is managing partner of Waypoint Strategic Solutions, a boutique consultancy that helps clients worldwide design and implement channel-driven growth strategies.