Strategy for Strategig Partnerships

Recommendations

This research is for anyone with partners they would like to deepen their understanding and relationship with. A strategic partnership is not something that is done easily, however is can be very rewarding to understand your partner better and grow the business together.

Based on the Nuffield trip, prioritize the relationship with your business partner/customer. See to it that the goals and objectives of both your businesses align. The objectives and goals of your partner should be detrimental to your business processes. That works the other way too. If you do, you will become a vital part of their business to achieving their goals. Reach a big Decision Making Unit, that can really help you understand their goals and objectives as well as the other way around.

In the future it could be wise to deepen strategic partnership models on how growth with your preferred strategic partner works. Most of the work from Martin is suited for this, also consultancy firms like Deloitte can answer a lot of questions.

 

 

The context

The poultry sector in the Netherlands has grown and changed considerably since its inception after the Second World War. The poultry farms in the Netherlands looked something like this at the time; 50 – 100 chickens, all for eggs and then used for meat. Between 1950 and 1960 there were 200,000 of these farms. Like any other industry in the world, poultry farms began to industrialize and grow on a larger scale. So much that in 2020 the average company has around 90,000 broiler chickens and there are only a few hundred companies left. A complete overhaul of the sector.

That's how 'adding value' worked at the time. Just add more chickens. But in the late 1990s something changed. There was a small shift towards more animal welfare. Fueled by NGOs and the Ministry of Agriculture, together with a processing plant and a retailer, they found a new way to add value; through animal welfare. Thus the new era of poultry farming was born. Over the next twenty years, perhaps forty new concepts for poultry farming were developed. They all add a little or a lot more value to chickens. For a long time, scale was the only way to add value, followed by animal welfare, and by 2024 there will be an abundance of choices. Ranging from animal welfare, cost price, environmental emissions, CO₂, food waste and healthcare. Nowadays there are many social challenges and therefore ways to distinguish a product from the crowd. But how do you know which path to follow and what to invest in? There is little worse than investing (or not investing) in something that does not add return and value and therefore costs you money. It brings you back to the transition we all have to make. At the Oranjehoen farm we invested a few times in new concepts, only to realize a few years later that we were no longer relevant to our customers and had to do something big or start something new again. The question I started working on was; how do I add the right relevant value for our partners and customers. All this to make sure we wouldn’t do the wrong thing, invest in wrong place and become irrelevant to our partner, or maybe just as bad, become replaceable for someone who did invest in the right things. The hope of a nuffield studytour would be at the very end of it there would be a solution to how keep being wanted or needed by your partner.

Creating the Nuffield topic

At the Contemporary Scholar Conference (CSC) in Norfolk, UK, the research topic was somewhat refined. It became clear that the question is not how to add value, because that is already happening on a large scale and successfully on the farm. The question was how, after the initial added value had been established, we could build a long-term relationship with the partners and how we could improve together.

Findings

The answer is simple, implementation is difficult.
The answer lies in a partnership, a strategic partnership to be precise.
That is probably most easily explained by this metaphor.

A strategic partnership is like a marriage. It takes forever to find the right partner, and you have to let go of all other temptations and work hard to make this relationship as successful as possible.

Also; if it works it’s the greatest thing in the world. If it doesn’t work its probably best to end it as quickly as possible.

The theory behind a strategic partnership and therefor the right partner is quite simple; try to be equal, share common goals, communicate often and at all levels. These are some of the most important aspects. The theory chapter places a lot of emphasis on creating the same values and how to make them strategic.
 

It’s not always success that teaches the most

Companies we can learn a lot from: Smithfield Market in London, a high-quality wholesale market with added value. Has been around for over 800 years. And that won't be possible in the next five years. Because it will be the new home for the Museum of London. The poultry market stopped on August 31, 2023, the other meat will stop in 5 years. A good example of a (group of) companies that do not know how to find the right added value for their customers and are becoming outdated. They are no longer (strategically) needed by the people of London and will therefore be dismissed. They failed to find added value and are now competing on low price.

Other more positive examples are: Rob Caldecott with Aubrey Allen, Paul Kelly – Kelly Bronze, Pieter Winter with Lays Chips, John Kirk Patrick – Tesco, Packington Farms, Rob Baan – Koppert Cress and Noble Foods with Happy eggs.

There were things to learn from each successful company visited during the study tour;

Rob Caldecott with his own chicken processing facility and his partnership with Aubrey Allen showed that once you find the right partner, it is crucial to work on the relationship. When asked why Aubrey Allen wanted to work with Caldecott's chickens and not someone else's, they replied: because the relationship is so good, Caldecott is always open to us if we come up with something new. Regardless of his own personal interest he would put theirs first. Whether its groups coming to visit or other things Caldecott would help them reach their goals.

Aubrey Allen, in turn, was a supplier to the King of Great Britain for a long time and managed to do so with the highest standards. They tried to inspire their customers with new ways to be the best butcher/chef. An example of this is the tail of a chicken, a piece that is usually given away. But known to the French as a delicacy. They asked 50 cents for a piece. Helping both customers create something special and realize 50 cents of added value, improving whole chicken margins.

Kelly Bronze was a great example of storytelling and vertical integration of the company. The strategic partnership is with consumers, not companies. However, he invests a lot in brand awareness. He does this by inviting as many food critics as possible and bringing them to the farm. This is certainly something special to see, especially for someone from the city. He then organizes a cooking show and party for them to enjoy and write about. He has a dedicated photographer to take pictures, so he decides how that appears in the media and then puts it out consistently. The other part he does is he controls the quality of the supply chain by having everything on his farm. Hatchery, rearing, finishing, processing, packaging etc.

Pieter Winter consults with his partner in a timely manner, invests in machines and sets common goals for the near future. They say yes to almost everything they want, showcasing what they want and how that affects the operation.

John Kirk Patrick just showed the willingness of retailers and companies to partner with a farm. Spoke about all the developments they were working on in the field of sustainability, food waste, welfare and pricing.

Rob Baan from Koppert Cress: During the Global Focus Program that we had to organize, we visited Koppert Cress, among other things, he explained in detail how he skips every chain in the supply chain (because they are not the partners he focuses on) and goes directly to the restaurant chefs, who create the demand that then drives it through the supply chain to his company. Instead of having to sell it to the distributors, the distributors demand it from him. He uses smart social media tools, but above all organizes many photo shoots with free products and the best equipment in the world, free for chefs.

Noble Foods, Marketing Manager, provided great insights into innovation and marketing with their key partners. How they come up with new ideas, new product features and build brand awareness.

Strategy development

It quickly became clear that to be a good strategic partner for the customer, you must align their strategy with yours. Their objectives in the strategy should not be achievable without you. That is why it is essential to know what your own strategy is and how it fits in with the desired strategic partner.

During one of the Net Positive dinners we spoke with a partner and senior strategy consultant at Deloitte about what strategy is, how to develop it and how to link it to the right strategic partner. The theory was added during an in-depth interview/strategy session. We have further explored Roger Martin and A. Lafley's theory in the book “Play to Win”.

The theory comes down to five points, which support each other to guarantee the right strategy.

An answer to each of these questions ensures that the strategy becomes clear. If this then overlaps with the customers, it becomes clear to them what you stand for and the step towards strategic partnerships is smaller. This is worked out in the full report but also found in some of the books mentioned below:

Roger R Martin – Playing to Win

Jim Collins, ‘Great by choice’

Jim Collins other works

Simon Sinek, ‘Start with why’

How we implemented the findings at home:

Know what your partner's goals and objectives are, an example.

For example; with our main partner the objectives are; no food waste, low CO2 food print and great taste. The latter is difficult to change. But in the first two we tried to fire as many bullets as possible. Joining networks of companies that are all trying to innovate in that area. Then found out with the network what works and what doesn't, and then go to our main partner with a somewhat small solution that we can implement and run on a larger scale.

The food waste example:

1. It was already part of our value, we gave discarded products to the chickens. That is a key point of attention of our company.
2. The realization that the partner also has this as an important focus point made it easier to have this
3. We had a conversation about what we could do together
4. We have joined networks that want to combat food waste
5. Thought of solutions with the network, fired some small bullets that didn’t work.
6. Then when we found something that did work, made a plan, started small and aimed big.
7. Now finding a way for the vegetables and fruit leftover at the partners plant and distributing it amongst food shelters and feeding the excess to the chickens.

Simple but difficult to execute, foodwaste aligned with our own values, reducing the foodwaste for the partner was a significant part of their objectives. With our project we helped them, aligned the goals and communicated as equals.

Strategic partnership models explained: During an interview with one of the strategy partners at Deloitte it became clear what we need to do to be the best partner. Strategy is still something we personally need to look at and will do so in the near future.