If your upbringing was anything like mine, you were raised to be competitive. Either in a team or individually at school, in sports, and then right through to business experiences, we are taught to pit ourselves against the opposition.
However, since the turn of the millennium, the world has started undergoing a major transformation–economically, politically, socially, physically and culturally. Power is shifting and the physical marketplace is changing to a virtual one. Both businesses and consumers are looking for more sustainable alternatives. For small to medium businesses, this could be the difference between survival and failure.
Collaborative Spirit
We are entering an economic environment where collaborative spirit is allowing businesses to compete with their larger counterparts. By combining synergistic products and services to their clients, businesses can compete without having to invest the capital expenditure to do it all themselves. An article by Kellog School of Management on the collaboration economy stated that “we are entering an economic era where people and organisations are connecting and interconnecting ever more quickly and fluidly”.
Collaboration isn’t a new economic school of thought. For some time, practical benefits have existed for business owners that think outside the box and work with others. However, now collaboration is an imperative. It provides cost savings and economies of scale through distribution of labor, access to networks, and knowledge sharing that fuels innovation. Our businesses become leaner and fitter through collaboration.
A 2013 study undertaken by the University of Queensland Business School, in conjunction with Ernst & Young defines collaboration as “the ability of the various players in the industry to design healthy, dynamic and resilient interconnected networks, capable of mobilising the right resources at the right time, to execute and innovate as hurdles emerge.”
The study revealed that collaboration with another firm in the same line of business was most important in terms of productivity. They also found that each additional collaboration with another firm in the same line of business increased by up to four times the odds of seeing productivity gains, this finding is significant.
Born to collaborate
While we are raised to compete, we are actually born to collaborate. The brain is a social organ, after all, and we are designed to connect. So, while it might take a bit of effort to retrain how we think about collaboration, the good news is that we are predisposed towards it.
Some ways to work towards building a collaborative vision in your businesses is through building your networks. Seek out inspiration and support from like minded businesses where you can share challenges and brainstorm solutions.
Symbiotic selling is another effective technique where businesses that have a shared customer base participate in joint marketing opportunities. Informal alliances bring new value to current customers, as well as expand visibility with new audiences. A colleague of mine in a regional town became so frustrated by commercial lease rates that she brought together a group of businesses and purchased a building together. Shared ownership of capital expenses and shared purchasing agreements is another powerful and effective way to work the collaboration economy.
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At the same time, effective collaboration requires good judgment and the right context. Some leaders make the mistake of thinking that collaboration will automatically (or magically!) happen just because it’s identified as a goal. The trend towards open plan office spaces is a case in point. Many organisations adopted this fit out thinking better collaboration would follow. Instead, they found that while an open office plan indeed helped with certain tasks, it was actually counter-productive overall.
In his book Collaboration, UC Berkeley professor Morten Hansen argues that leaders can even sabotage themselves by promoting more collaboration in their organisation. According to Hansen, in their “eagerness to get people to tear down silos and work in cross-unit teams, leaders often forget that the goal of collaboration is not collaboration itself, but results”. Leaders need to think differently, focusing on what Hansen calls disciplined collaboration.
Case Study
Hanson illustrates the value of disciplined collaboration by tracing the success of Apple’s iPod music player with the belated launch of a similar product by Sony. He notes that it took Apple just eight months starting from scratch to collaborate across its organization and find a way to create the iPod. Sony, on the other hand, spent three years engaged in internal infighting before launching a competing MP3 player that had little success.
Apple did not win because it had better technology. In fact, Apple actually sourced the iPod battery from Sony. The success of the iPod relates more to Apple’s ability to manage rapid innovation through excellent internal and external collaborative networks. At Sony, the culture encouraged internal competition over collaboration. A digital music player did not make as much sense from a profit and loss standpoint for any individual business unit. As a result, the project did not move forward, even though it held the potential to deliver large benefits for the entire organization.
In short, by seeing colleagues, other departments, and fellow businesses as partners rather than as competitors, leaders can harness the power of the collective to attract customers, seek inspiration, innovate, and help their overall bottom line.
Collaboration is the new competition–at least when it comes to building strong, innovative businesses.
