Collaboration or Competition? Which strategy for prosperity?

How do I see the backdrop?

I think that collaboration was once a dirty word. Proposing collaboration suggested that your organisation was weak and not competent to succeed on its own. It became more acceptable as the European Union research programmes actively promoted pre-competitive research through collaborative projects. I think this was about improving the competitiveness of European companies on the world stage. More recently I see that some programmes have become so big that they could not be delivered by any one organisation. I saw a whole new capability area has opened up, based on private sector companies teaming up to be able to provide a collective one-stop-shop for big infrastructure projects worldwide.

Is collaboration fair?

I recall at least one example I was close to where collaboration and joint venture activity was interpreted as anti-competitive. It resulted in law suits against both parties in the United States. However, these days it is quite normal for multiple organisations to collaborate as part of a consortium in a competitive bid process for large projects and service provision.

Formal Standards are attracting interest

As of 2010 there was even a British Standard on collaboration; BS 11000. This has now been harmonised to become the world’s first international standard on collaborative business relationships: “BS 11000 has been replaced by;

ISO 44001 Collaborative Business Relationships Management System”.

The above link leads to a quote that 79% of those parties getting into ISO44001 were doing so to increase their competitive edge.

Today collaboration is often the default position to remain competitive.

Economic Efficiency

I see the link between collaboration and competiveness as largely due the rapid pace of change in technology and technology-enabled services. This in turn makes it quite economically inefficient to have multiple organisations investing large percentages of turnover in R&D to develop the same capabilities in parallel.

If government did not freely share across departments and forced them to duplicate technology-driven service developments I’d expect there to be uproar from tax payers.

The Great Debate

“Does collaboration drive economic efficiency or does competition always triumph?”

Ouch – Light the blue touch-paper and stand clear – major debate to be had. I suggest this is the ‘Great Debate’ that requires significant attention in forging agile strategies of all sorts of investments especially in the current climate of change.

There still must be competition. The EU and others rightly insist that without competition at some level economic inefficiency and cronyism can set in.

But when to collaborate and at what level should competition be introduced?

Collaboration and governance

Collaboration can create challenges for effective governance:

  • Is it clear how collaboration is going to add value or make money? Can we sell it to the Board?
  • How will you protect your IP and other ‘crown jewels’ if you are; ‘leaping to your feet to open your kimono?’ (A real-life quote on the subject.)
  • How will funding of joint activity be apportioned and managed?
  • How will the downstream benefits (work share) by allocated and managed?
  • Which parties are carrying which risks?
  • If organisations are sharing risks then do they have compatible risk management processes and equivalent risk appetites?
  • Who owns new IP?
  • How do we managed equitability and protect shareholder value for all parties?

The myriad of questions can be calmed quickly with some pragmatic design work.

I’m sure ISO44001 will also help. This is the link to the Executive Briefing. But at the end of the day ISO44001 is about setting up your business management system to operate effectively with collaboration. Like most standards it majors on formal processes. The things that I think are most vital to get right are to some extent assumed. For example, the common goal, the alignment with strategy and the viability of extracting value for each organisation in a fair manner. Oh, and how could I forget (my esteemed colleague reminds me), there must be;

trust

between parties at multiple levels in the organisation. Easy.

Key Principles

What are the key principles for effective collaboration to deliver the much vaunted and yet elusive ‘win-win’? I suggest:

  • Transparency over shared goals and those that are not shared.
  • Building trust in relationships between collaborating staff at all levels.
  • Formalised partnership working with a defined scope.
  • Having a formal and pragmatic process for managing the scope of collaboration.
  • Strictly enforced NDAs and ethical behaviour with joint zero-tolerance of those that undermine that position.
  • A feedback mechanism that rewards good joint outcomes as well as individual organisational performance.

That’s six.

I’d normally try for 12 ‘principles’. If this were a collaboration then you’d come up with 6 others too.

Business Decision Design® can provide you with innovative and creative framework designs to help you maximise the value from joint working and while minimising overall business risk for the firm.

Here is the link to this week’s picture.

I’m happy to discuss.

Nigel

 

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