The value of the QBR

Is the QBR dead?

There has been a lot of discussion in the press in recent months about the Quarterly Business Review, or QBR; how its time has passed, how it is now an outdated process. The claim is made that senior leaders have no wish to engage with their suppliers and that the relationship should be left to the procurement teams.

We do not believe this is correct. If the QBR process is not working for you, we need to look at your relationship model with your client and what you are looking to get from it.

In the daily relationship with your key clients, you will have multiple interactions between your team and theirs. A high proportion of this will be daily activities such as order taking, pricing, service and technical questions, requests for technical support and incremental new business opportunities.

This should deliver solid performance and positive feedback from your clients, particularly if they are getting the answers that they are looking for.

What this does not provide is an invested conversation on what your mutual strategic goals are and how you are progressing toward them. As a strategic supplier you and your client will have committed assets, people, or funds towards advancing your mutual goals. When it comes to the next contract renewal, your ability to roll over a new contract is going to be based on your success in delivering against the current contract (service, commercials etc.) and whether you have become an essential partner to your client. If your contract renewal strategy is based purely on being the lowest cost or most consistent provider, you will still find yourself going head-to-head with your competitors for the next contract.

Strategic partnerships with clients

Let’s look at a high level what being a strategic partner to your client means.

A strategic partnership is an agreement, formal or otherwise, for two companies to support each other to help both organizations succeed, by sharing resources, knowledge and leveraging assets to achieve their goals.

A supplier/customer relationship is often not referred to as a strategic partnership in a formal sense, but the principles remain. Perhaps you are facing the same technology challenges, or have shared sustainability targets, or you are both looking to grow in a new segment or geography.

This is not going to progress effectively through a day-to-day sales & purchasing relationship. To advance a strategic agenda there needs to be an opportunity in the relationship to get the senior leadership together. This is the foundation of a strong QBR.

The purpose of a QBR

The key purpose of a QBR is to

 (1) Align resource allocation for you and your client towards the key initiatives that matter. Specifically, people, capital funds, or strategic direction initiatives such as sustainability.

 (2) Pulse check if that resource allocation is successful, and does it require any course correction or expansion.

 (3) Provides an opportunity to share what your team have delivered, and what value has been brought to the client since the last senior discussion.

This third point should be treated with care, we will come back to it shortly.

There is common sense here, a senior session looking at the key drivers for the business and adjusting the course/direction/resources if needed.

 So why are some claiming it is dead?

Because the purpose of a QBR has become diluted and too relaxed. It has morphed into another round of reviews of the same pages and the same topics, in the hope that one or more of the senior leadership might show up.

The thinking goes something like this:

“… The CEO might be there, so we better make sure we have all our info up there on our slides”. Then, to make it worse; “let’s bring the entire team along to show them we are serious”

If the CEO does join the discussion and be faced with a multitude of people and a large deck of slides, they will likely reach for their phone and send a text to the CPO sitting next to them asking ‘you already know this stuff, why are they repeating it here’.

The session may close very politely, lunch or dinner will be declined due to pressures of the day and the CEO will depart, leaving you in the room with your regular daily contacts who are left to escort you from the venue.

Come the next QBR three or six month later you are sitting across from the sourcing manager who will politely inform you “the CEO is busy but show it to me and I can forward it to them later”

And there is the danger. With poor attention to the process and content a QBR quickly becomes a sales pitch with reduced senior commitment from your client.

This is why some will claim that the QBR is dead. Because they have lost sight of the purpose, the benefits, and the process. In this situation, when the commercial team arrives at the client’s location, waiting in the foyer armed with multiple laptops, charts, slides, too many people, it is no wonder the CEO will look to find a better use of their time.

Why can’t we get with the senior leaders at our customers

If the senior leadership of your client does not want to get together with you for a regular review, most likely the reason is one of these:

 ⁃               Your messaging is too long winded, too many slides and words

⁃               The QBR is repeating messages and comes across as a sales pitch

⁃               The attending team is not at the right level of seniority

⁃               They do not see you as a strategic partner

The fact is, if you are not able to get a regular session with the senior team at your client, whether it is called a QBR or not, likely one or more of your competitors is at that table and having those discussions. Why? Because they have figured out the importance and the approach needed to deliver it.

A successful QBR format

Here are our golden rules for a successful QBR:

 ⁃              Focus on key strategic deliverables and the progress against those agreed goals.

⁃               Limit the slide pack to no more than 6 - 8 slides for a 60 - 80 minute review.

⁃               Restrict your attendees to two or three, and never more than the client has present.

⁃               Ensure the attendees are at a senior level, close to that of the client.

⁃               Stay away from day-to-day topics but be well prepared with the data if asked.

If it is a one-hour session you need six charts/slides max. That’s it. Seriously. Avoid bringing any pages they might have seen before, or their team might have forwarded to them as preparation.

You do not need the entire team. This is a senior session with two to three people, ideally two. A key speaker and their wingman who can support with detail if needed. It’s OK if the wingman is the account manager as support but not the lead for the discussion. Your attendees need to be your clearest communicators, do not use this for building experience for a novice employee unless you have full confidence in them for this level of discussion.

CEO’s and VPs are very unlikely to want to hear the sales pitch, they pay good money for their CPO’s and procurement teams to handle that.

If you have read our blog post on relationship mapping, there is going to be a link between the state of your relationship map and whether you can get strategic high-level discussions initiated with your clients.

The slide deck

Let’s look at the slide deck, those 6-8 pages.  

 ⁃               One page showing the state of the nation - how business is going between you, and a summary of your own corporate performance if relevant.

⁃               One page summarizing the headline key initiatives that you are agreed to focus on together, likely this page will remain relatively unchanged from one QBR to the next.

⁃               Two to three pages showing the status updates of the strategic initiatives, being transparent about what is going well and what is not.

⁃               One page capturing any key roadblocks faced by your joint teams to overcome.

⁃               One page capturing what your team has done for the client in the last three months. This one is a sales page, so make sure it’s new and make sure it’s one page only, you will not get away with more than this one.

Each slide should show high level performance vs plan and be a backdrop for questions and the discussion. Keep the fancy graphics, marketing tag lines and exclamation marks off these pages. This is not a sales pitch remember. Clean and simple formats. If you must have multiple blocks keep it to four blocks max. Ideally, one chart and message per slide.

Avoid any super detailed pages packed with data. No organigrams. Your clients are not interested in having your org chart proudly presented to them.

Essential backup

Behind this key slide deck, you should prepare extensive backup slides. Be careful with them and do not be too eager to share them. These should only get used if they will help support and drive a discussion from any questions in the room. These can be more detailed and the rule about not having used them before is less strictly enforced than the main deck. But keep in mind a backup pack of slides is just that, a backup. If you do not show any of them and yet you got your messages across and came away with your objectives met, then the preparation was worth it even if those backup slides didn’t see the light of day. You can always use them with the procurement team next week.

Capturing value in the day-to-day

Let’s come back to that third purpose of a QBR, to share what your team have delivered, and what value has been brought to the client since the last senior discussion. This is the last one page in the deck, the one we said to be careful with.

This page is your platform to share the achievements made to support the client. It is not the main event of a QBR, it is however a powerful vehicle to be able to share what has been achieved in the past three months at a senior level. Perhaps there was a large technical issue that was solved, or there have been regular technical visits to your clients production units with report outs on recommendations for efficiency improvements. Over the life of the contract this builds a portfolio of achievements that create value for the client, that frequently gets lost in time during the life of the contract. When you are seeking to renew the next long-term contract, this portfolio can be used to build a strong message of the value you have brought to the client during the current contract to demonstrate why they should continue to grow with you.

This must be treated with care, as it is effectively a sales pitch. Not to sell your product, but to promote your company and why you should be the partner going forward. It should be at the end of the QBR and should not be treated as the main event. Despite that, it is important to include.

Summary

A QBR is, as it is called, a Quarterly Business Review. It does not need to be called that, but the principle of a regular senior review every three months is important. Three months is long enough for the discussions to be strategic, but short enough to ensure momentum on the strategic initiatives is not lost.

Having this process in place is a critical element of the relationship to get closer and more embedded with your client, the success of this builds the case for a successful long term relationship for both companies.

There will continue to be critics of the QBR, either because they have lost sight of the process and the aims, or perhaps they want to promote a relationship management software package instead. I have run successful QBR processes in multiple industries for more than 20 years, when it is prepared and executed well, I know it works.

Julian Cass

May 2023

This blog post represents thoughts based upon our experience and observations. It is written to be thought provoking and not intended to be acted upon directly. If you would like to discuss your specific scenario or would like to know more about how we can help with developing a QBR process for your key clients contact us here