The U.S. economy faces an unprecedented period of uncertainty. Everything from inflation, increasing costs to produce goods, shortage of skilled workers, the great resignation, surging demand, container shortages, port bottlenecks, shipping price increases, military conflict in Ukraine, trade imbalances and skyrocketing energy prices are roiling our economy. The level of economic complexity and constant change makes it nearly impossible for any individual company to innovate and thrive. We are subject to global interconnectedness, interdependence and interrelatedness. Contractors should move from an individual company approach to a strategic partnership approach.
Lifelong friendships and rich enduring marriages and relationships are the highest social expressions of our natural relational inclinations. Strategic partnerships are expressions of the same relational dynamic in business. Both are hard to get right, but when we do, they are among the most reliable and influential resources we have at our disposal. Because partnerships are an ideal expression of our nature, it seems common sense that we would pursue them in business. We should be pursuing them where they can be formed most naturally and in areas that are most likely to be mutually beneficial.
In 1993, Barnes & Noble. teamed up with Starbucks Coffee “to provide a consistent, quality cup of coffee for readers to enjoy while perusing the latest best-sellers.” Today, nearly every Barnes & Noble bookstore has a Starbucks café either conjoined or inside the store. The partnership has been a boon not only to both companies’ retail operations, but also to the pleasure of their shared customers. And while it may be a case of correlation rather than causation, it is interesting to note that Barnes & Noble is the last big box chain bookstore standing.
In 1994, Starbucks and PepsiCo joined forces to create the North American Coffee Partnership (NACP). Two years later they launched the now iconic bottled Frappuccino, and with it the ready-to-drink (RTD) coffee category in the beverage industry. Over the past 25 years, the combination of Starbucks’ coffee expertise with PepsiCo’s vast sales and distribution network has both expanded and dominated the RTD coffee and energy drink sectors. NACP continues to innovate and grow.
Supply chains continue to plague industries and the overall U.S. economy. Companies are trying to address challenges and build solutions on their own, and solutions are not readily available. Applying a strategic partner approach can lead to more innovative thinking and a move away from “just in time” approaches to thinking that incorporates “just in case.” A broader approach, one that links collaboration and innovation among industries is a more likely way forward. Industries incorporate the collective wisdom, insights and even the scale necessary to build more practical and durable solutions. Approach it from this perspective, industries can build their structural frameworks. They would be comprised of their own supply chains, study points of failure and build precompetitive strategies that help deliver durable and resilient supply chains. These strategies are centered around logistics concerns and macro policy issues that must be addressed. This is not as far-fetched as it seems like innovative approaches similar to this are being implemented. CNBC reported that American Eagle has developed a new strategy to compete with Amazon: reinventing their supply chain strategy through a proposed “frenemy network” of vertical logistics.
Strategic partnerships between industries and their trade associations are also proving to be invaluable. Trade associations are building onto their roles as industry advocates, and they are ready to help industries overcome ongoing challenges.
They can be positioned as strategic business units, serve as neutral integrators and collect information on points of failure throughout the supply chain. From there, they develop policy solutions, implement advocacy strategies, shape a favorable business environment and deliver road maps leading to resilient supply chains.
These strategic partnerships between industries and their trade associations already help deliver unified advocacy strategies and convey outcome-focused messages to government officials. For example, the frozen food industry has built their own strategic partnerships with their trade association. The American Frozen Food Institute is a strategic business unit for the industry, they build robust ecosystems, effectively engage aspects of their supply chains, and they are changing the game.
The American Frozen Food Institute and its board of directors are advancing strategies to build upon a strong foundation & continue its double digit growth. Leveraging a strategic partnership between two major industry organizations, AFFI and FMI—the Food Industry Association, which represents food retailers (grocery companies, a key component of the industry supply chain), is called the Power of Frozen. Through this partnership they reset the conversation around the frozen food category through in-depth market research, collecting retail sales data—overlaying that with consumer trends and identifying opportunities for both retailers’ and manufacturers’ strategies to expand the frozen food industry. They utilize that information effectively in dealing with both the business media and with consumer media to share the benefits and business of frozen. This initiative allowed them to articulate how those benefits are translating into sales. AFFI is led by Alison Bodor, president & CEO.
These types of partnerships also exist in the Uncrewed systems Community and Association for Uncrewed Vehicles Association, Asphalt Pavement Industry and the National Asphalt Pavement Association, the Baking Industry and the American Bakers Association, and the Recreational Boating Industry and the National Marine Manufacturers Association.
Restoring U.S. global competitiveness cannot be achieved through a siloed approach, it must include a “rising tide that lifts all boats” strategy through industry and trade association strategic partnerships. These partnerships can leverage collective resources and innovation that can shape a far more favorable business environment for all companies throughout their supply chains. For executives who do not yet engage with your trade associations, know that you are missing a key opportunity at a pivotal moment. The stakes are high, and the opportunities are far greater if you engage right away. As global and domestic challenges intensify, strategic partner relationships represent your pathway to optimize U.S. competitiveness. Contact board members who serve on the trade association board and launch conversations with your organization’s CEO about how your industry can engage with them to build your own strategic partnership.
In the movie Without Limits, runner Steve Prefontaine debates the importance of his strategy to win races with his coach, Bill Bowerman: “When you set the pace, you control the race.” Strategic partnerships between industries and trade associations set the pace by helping shape the external business environment and position industries for growth. The road to restoring U.S. global competitiveness can be achieved through these partnerships. They are something to shout from the highest mountaintops. They are worthy of immediate exploration, and over time they should be implemented or expanded for your industry and trade association.
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