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Look Beyond a Step Up or Back

Like P&G and other leaders, you too need to look beyond your immediate customers and suppliers, because new ideas, innovative capabilities and opportunities actually increase the further you reach beyond where you are in the value chain.

 

How many companies do this?

 

Some have been doing it for quite a while. About 10 years ago, I worked with Sainsbury in the UK on a project centered on how the company could develop an understanding of supplier profitability and ultimately improve relationships with partners.

 

Sainsbury had a very interesting department within Marketing and Product Development called “Search and Reapply.” Its head had what might be considered a “dream job”: Twice a year, she got to fly about 10 people somewhere in the world and spend about two weeks on site, looking for new ideas, new approaches, new products, new partnership opportunities.

 

At the time of my Sainsbury project, Starbucks had no stores in Europe, though they were testing a few in the UK. The

Search and Reapply team was planning a trip to Japan. I happen to live in Seattle, and the head of the group suggested that, on the way back from Tokyo, they stop off there.

 

Knowing Starbucks’s COO at the time, I arranged for the Sainsbury group to meet him –– and out of that meeting came the first Starbucks stores to open inside Sainsbury supermarkets.

 

It was the first of many. Today as then, the best partnerships answer the question: How can we take what is unique in a marketplace, and do something different with a trading partner?

State of Strategic Partnering 2009

Where are we now, at the start of 2009? What are companies thinking about value-enhancing partnerships?

 

Recently, The Economist published a study targeted to the CEO, CFO and other C-level executives. Sponsored by SAP, it was based on responses from 516 companies worldwide, and suggests what companies are thinking about in terms of strategic partnering, or “enhanced business relationships.”

 

Respondents were permitted to give multiple answers. The accompanying Chart 1, “With Which Types of Entities Has Your Company Formed Enhanced Business Relationships?”, shows that 62 percent said they were working with their customers and 55 percent were working with their suppliers or vendors. But a full 28 percent were also working with competitors or peers, 27 percent with educational institutions, and 21 percent with government.