Joint Business Plans: Achieving the Elusive Win-Win

By Vince, Principal at The Gap Partnership With over 30 years of commercial experience in the FMCG sector, Vince has held various commercial roles at Cadbury, Mondelez, and Aryzta Food Solutions before joining The Gap Partnership in 2017. He currently heads up operations and delivery of EMEA consulting services, specializing in strategic negotiation solutions across sales, procurement, and trade unions.

Joint business planning, annual planning, buy and sell plans: over time the name given to joint business planning, or JBP, has evolved. However, the process for negotiating annual agreements that are collaborative, reflect mutual benefits and mitigate risk through alignment, contracting, and assigning accountability is still an important process embraced by many businesses.

The process, if managed well, can aid focus and alignment through the upfront identification and prioritisation of goals. It can also help mitigate risk by assigning accountability and will enable a higher probability of a successful agreement through regular monitoring, reviewing, and inflight adjustments as or when required. In fact, a successful JBP represents the elusive corporate partnership goal: a win-win for both sides.

Where to start

How to begin the process is one of the key questions. Firstly, determine if a JBP is appropriate for both parties. Start by considering the benefits: is there enough business taking place? Is the scale of incremental opportunity significant enough? Then assess whether there is an adequate level of “will and skill”, or desire and capability, on both sides to invest the time in creating one.

Having determined that it is appropriate, joint business planning is intrinsically linked with the business planning cycle. However, the process can be most effective if it is ongoing and iterative. To fully realise the optimum value from the plan, the agreement should also be based on mutual value creation, with both parties actively contributing rather than simply executing off-the-shelf solutions. Staying abreast of business developments, market performance, and the creation of a dynamic agreement versus a static one will ensure that value does not erode over the length of the agreement.

Time spent upfront reflecting on the previous year, appraising what worked and what could be improved, and gathering cross-functional feedback from both parties and all stakeholders to gain a complete and comprehensive view is time well spent. Having taken this into account, the planning should also consider what has changed to inform the priorities for the year ahead and establish clear objectives.

Allowing adequate time to prepare in advance is critical when developing joint business plans. Value creation negotiations are typically more complex, requiring more variables and time to fully plan out all possible scenarios and ensure that value is optimised. Additionally, robust planning will support a more controlled, shorter, and smoother negotiation phase, thus enabling greater emphasis on the implementation of the agreement to maximise the value potential.

The Gap Partnership’s strategic decision-making tool, “The Pyramid,” provides an effective guide in navigating through many of the elements that are linked to building effective plans. It considers four aspects: the orientation of the negotiation, the approach to value, assessment of the balance of power, and the optimal strategies to adopt, enabling the negotiator to make conscious decisions for each.

Cooperative agreements and the requirement for trust

In a negotiation, there are two or more parties seeking to agree on the principles on which the business is conducted. As such, there can be differing needs and requirements, and therefore some level of conflict can exist.

Unless one party is seeking to address elements, reset, or significantly renegotiate the current terms, a cooperative plan is most developed with an approach that creates value for both parties. Assessing, fact-finding, and recognising the priorities of the other party can assist you in overcoming potential hurdles or areas of conflict.

To engage in a mutual JBP, a level of trust typically already exists or needs to be strengthened between the involved parties. The mindset and behaviours of the two parties should reflect this principle to realise the full benefit of the plan, adopting an open mind, considering the needs of both parties, managing the climate of the discussions, and using appropriate language. Rather than rejecting ideas, consider “Under what circumstances could I?”, building on ideas to progress discussions and ensure forward momentum is maintained.

Trust is precarious; hard to build but easy and quick to destroy. It can also be viewed at different levels. Firstly, there is a basic or explicit level of trust exemplified by doing the things you say you will do, sticking to the agreement, and delivering against your accountabilities: put simply, you can be relied upon to deliver against the contracted agreement. At the other end of the scale, there is implicit trust, more commonly associated with families and friends, where people may do things that are a personal sacrifice. To build trust in business, explicit trust forms the foundation, and where appropriate, doing something in the other party’s interest is one way in which a step change can be achieved.