In this article...

1. What led BMW to choose H&Z Management Consulting as their partner?
2. How does the partnership work in practice?
3. What challenges does an even 50-50 split pose for both partners?
4. How to start your own joint venture in 7 high-level steps
5. Strategy, understanding, and perseverance: the key to a successful joint venture

Read time: 6 minutes

There were just 70 people working at H&Z Management Consulting in 2015. Now there are over 600.

How did this happen?

They founded rpc - The Retail Performance Company as a joint venture with BMW.

In this article, we investigate what drove BMW to choose H&Z as their partner, the challenges posed by entering into a 50-50 joint venture, and how you can go about entering into a joint venture of your own.

What led BMW to choose H&Z Management Consulting as their partner?

BMW's decision to partner with H&Z was not a hasty one, but rather a deliberate choice driven by identified needs, precise partner requirements, and cultural fit.

Let's take a look at some of the key factors that led BMW to choose H&Z Management Consulting as their Partner for this joint venture.

• BMW's need for consulting expertise: It starts with a client need/desire. BMW recognized a growing need for specialized consulting services to support ongoing transformations in their retail outlets.
• Not too large, not too small: H&Z's moderate size was attractive to BMW, as it allowed for a more balanced partnership compared to larger firms like Accenture or smaller garage consultancies.
• Industry expertise: While BMW was hugely successful in building, marketing, and selling cars, they weren't finding success in consulting. H&Z possessed the necessary level of proficiency to make the venture a success.
• Personal connections: Networks make or break deals—luckily for H&Z, one of their founding members was a former employee at BMW. This enhanced the sense of trust and connection between the two firms.

This joint venture illustrates the importance of strategic alignment in choosing a business partner. It provides a clear example of how a well-considered joint venture can act as a growth catalyst, not just for a specific project but for the entire business trajectory of both partners.

How does the partnership work in practice?

The joint venture between H&Z Management Consulting and BMW is a multifaceted and collaborative relationship that can be analyzed in the following ways:

Structure and Leadership:

The partnership is evenly split, with each party holding a 50% stake. This arrangement is seen as balanced and carefully designed to align interests.

A “Beirat” or advisory board is in place, comprising two members from each side, including Stefan and Rainer from H&Z, as well as a financial and business representative from BMW.

Decision-making and Alignment:

The board engages in at least four sessions a year, sometimes delving into deeper discussions about specific regions, business models, or other issues.

Decisions are usually made anonymously, with a focus on convergence and agreement between the parties. The tie-breaking mechanism is present but is perceived as impractical.

Guidance and Growth:

The board's role is likened to guiding a child learning to ride a bicycle. The emphasis is on supporting, stabilizing, and then allowing autonomy, rather than directly controlling. Both parties spar with each other, sharing insights, and ideas in a constructive manner.

Despite some diverging interests, particularly in financial contribution and return on investment, the focus remains on the success and growth of rpc.

Synergy and Balance:

The relationship is characterized by an equal partnership and eye-level interaction, where both parties have the freedom to voice opinions.

The shared interest is not merely in financial returns, but also in making the venture successful, with alignment around responsibilities and contributions.

Transparency:

The partnership is transparent and legally documented, with information publicly available, underscoring the mutual trust and open collaboration.

What challenges does an even 50-50 split pose for both partners?

Entering into a 50-50 split partnership is bound to result in some friction.

The biggest challenge for H&Z Management consulting? Decision-making.

BMW is a gargantuan, multinational firm with countless moving parts. H&Z, on the other hand, is a smaller, more agile company with the power to make important decisions quickly.

This joint venture revealed that both partners were "stuck in their framework," with each side operating within its own entrenched procedures. The contrast in decision-making frameworks led to unforeseen delays and added a layer of confusion to simple agreements.

"It takes a lot of understanding from the other side. Because we come from really different planets." - Stefan Aichbauer, Managing Partner at H&Z Management Consulting

So how do H&Z and BMW overcome this challenge?

They write everything down.

Stefan's emphasis on writing things down reflected a proactive approach to maintaining transparency and continuity across changing landscapes.

Through building mutual understanding, investing extra effort in communication, and documenting decisions, the joint venture was able to foster a strong relationship.

How to start your own joint venture in 7 high-level steps

Inspired by H&Z's joint venture with BMW and feeling called to start one of your own?

Here are 7 key pieces of advice for entering into a joint venture, courtesy of H&Z Management Consulting.

1) Figure out the client's intentions:

• Engage deeply with the partner to understand their organizational structure and decision-making process.
• Collaborate to ensure alignment of objectives and intentions, allowing for the avoidance of miscommunication and disagreement later.

2) Convince them that the idea makes sense:

• Showcase how the joint venture aligns with both parties' strategic goals.
• Provide clarity on how the collaboration would work, even in the face of differing operational styles and procedures.

3) Position yourself as the best option:

• Illustrate your unique capabilities and why they would be essential to the partnership.
• Showcase the ability to adapt to the partner's framework while maintaining the integrity of your own operations.

4) Establish a Healthy Relationship with the Client:

• Emphasize transparency, consistent communication, and alignment of intentions.
• Recognize that differences are not due to bad intentions. Instead, work towards finding common ground.

5) Understand the benefits from the client's perspective:

• Assess the partnership from their viewpoint, ensuring the joint venture aligns with their needs and adds value to their business.

6) Build a sustainable and profitable business Model:

• Set up structures that allow for continuity, even with changes in personnel or direction.
• Ensure that the partnership is not only symbiotic, but also leads to shared financial growth.

7) Iron Out the Technicalities:

• Maintain a written record of key decisions and intentions to preserve clarity and continuity.
• Work together to establish clear and formal agreements that guide the collaboration, definition of roles, responsibilities, and processes.

By following these carefully considered steps, you can embark on a joint venture, mitigate potential challenges, and pave the way for successful collaboration.

Strategy, understanding, and perseverance: the key to a successful joint venture

Starting a joint venture is more than a mere business transaction - it is a complex collaboration that demands careful planning, strategic alignment, and thoughtful execution.

Just like this partnership between H&Z Management Consulting and BMW, a joint venture could be the catalyst for the growth and innovation of your consultancy.