December 2004

Here it is — the end of the year…

Time for that annual review with your business partner in preparation for what you are going to do together next year. Time to sit down, evaluate, discuss and plan.

Some of the issues and questions that come to mind include: Are you prepared? Is your business partner prepared? What kind of meeting and discussion are you going to have? What will it be based on?

And during the year, how much time and effort have you and your company invested in this partner? How much time and effort have they invested in you? What were the results? Was it worth it? Should you continue or should there be changes made?

Over 90% of the business community dealing with business partners do not measure and evaluate their relationships with their business partners.

Maybe you aren’t ready to really evaluate all the issues of the past year. Even so, what can you do for the coming years to improve both the evaluation and the relationship?

As a manager, you may have heard that “if you can’t measure it, you can’t manage it” or some variation of this, and we agree. We would add, “If it’s worth doing, it’s worth measuring.”

How am I doing? How are you doing? How are we doing?

In almost every environment, people want to know how they are doing. And they want to know what they need to do to improve. They want to know now — and over the short, medium and long term.

If any formal evaluation is performed at all, it usually consists of looking at sales results and occasionally at tallying the transactional activities (like many CRM and PRM programs). Frequently, it is not a process, but a checking of numbers against pre-established targets or statistics that is performed at a fixed time. Rarely does it look at the soft side and qualitative side of the relationship and rarely is it a two-way assessment.

How can you turn this into a positive and productive experience with your business partners? The key to this essential management element is to make it an on-going, integrated and shared process with clear purpose, objectives and benefits. Let’s take a look at how you might structure your process for the future.

Purpose

To maintain the most effective business partner operations, it is necessary that you have definite ideas of your various partners' effectiveness — ideas derived as objectively as possible. The partner evaluation program exists for this purpose.

Benefits

This Evaluation Process serves to:

1. Reveal strengths and weaknesses of partner organizations — (this means everyone).
2. Show areas where you can be of help to your partners — (digging deeper, using all of your skills and assets to help your partners achieve success).
3. Demonstrate factors contributing to effective partner operations — finding out about what they do that works and sharing it with the rest of your partner community.

If business partner operations are below par, it is essential that you identify this position as early as possible and take the necessary steps to correct it. For weaker partners, you can apply the methods used in effective operations (like your more successful partners).

You must have enough control of the situation to prevent affairs from disintegrating to the point where you would consider termination. And you must be completely aware of your total relationship with your partner, of any problem that has existed, or the nature of it, before a question of termination arises.

Responsibility

Generally, it is the responsibility of the Business Partner Account Manager (BPAM) to see that evaluations are on-going, continuously reviewed and assessed (at least) annually with each Business Partner in his/her region.

Process and Procedure

1. The process is on-going and includes seven areas.

Communications: this is the ad hoc communication that you have with your partner — daily, weekly, etc. What you are assessing here is both the quantity and the quality of the exchange. And the actions required and the results obtained. Are these problems or problem resolutions? A simple measurement tip here is to keep a list of your partners and count the number of times they come to you with problems — without solutions.

Conflicts: what is the nature of your communications? Are they in the form of complaints — and which you can address, discuss and resolve or are they in the form of criticisms attacking the character of your company or you.

Reporting: this is the structured formal reporting, feedback, info exchange, updating, checks and balances, tuning, health check score cards and any other documents that your relationship requires. Here you measure for completeness, quality, timeliness (weekly, monthly, or quarterly as is appropriate to your business), results against forecast, rankings and ratings. It should be short and to the point and web-based.

Forecasting: best forecasts are rolling forecasts which are constantly updated to reflect market conditions. You evaluate for the timeliness, reality, year-to-date performance vs. targets and outside influences and SWOT. Again, this should be web based or at least on an Excel spread sheet.

Individual meetings: these are the scheduled and informal meetings that you have with your business partner typically with an agenda and minutes. You should be discussing what works, what doesn’t work, new initiatives, competitive activities and any other daily business. Here you can also refer to the above issues discussed in Communication and Conflict. Action items need to be determined and agreed, responsibilities assigned, metrics agreed and due dates set.

Group meetings: these are the regional, scheduled, formal meetings with several partners often done on a quarterly basis. The participants typically are the managers and owners (CEO, COO, CFO) of your business partners and your own top management team. The format is business and the agenda is pre-established to cover business issues, results, competition, success stories and new developments. Here you look at the conduct of your business partner’s management. Is it professional? Are they prepared? Are they team players? How do they interact with all the other participants?

Annual meetings – 3 parts: this is the individual meeting with both account management teams (your team that is involved with the management of the business partner and the business partner’s own team that deals with your organization). The purpose is to 1) review and evaluate the past and present business and relationship, including the regular reporting, meetings, and your partner’s evaluation of you; 2) build the joint business plan for next year; and 3) assign the roles, responsibilities, metrics, and due dates to ensure that the plan is carried out. This may be done in two or three parts depending on the strength of the relationship and partnership. It may last more than one day as well.

2. The forms and format to be used should be in an annex to the original contract, may be included in the sales policy, and should be on your website dedicated for the partner’s use and available in hard and soft copy. An original and a duplicate should be made. Distribution should be restricted and protected since this is confidential information.

3. If data requested is not available, a suitable note to this effect should be made in the space provided with an explanation.

4. At the time the evaluation form is completed, a business partner inventory should be made (products, people, and facilities). A copy of this inventory is attached or included in the report.

5. A copy of the evaluation, the inventory report and subsequently the joint business plan and roles and responsibilities should be retained in the office for use at that point or available on your website dedicated to the partner. The originals should be forwarded and available to the Distribution Channel and Partner Manager and Vice President of Sales and Marketing.

Finally, for a strong partnership, three elements need to be evaluated: the business partner and its organization which you do, your company which they do and the partnership which you both do separately and then together. You should be providing the basic format and initiative for these three as a channel leader.

Because you have selected the best partners you can, and they have selected you, it is in everyone’s self-interest to make the partnership work and achieve its objectives.

If you need help in creating and implementing your Business Partner Evaluation Process (the tools, the criteria, the buy-in, the follow-up), email MNSA with your requirements.

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