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Collaboration over competition: The art of partnership in business

By Nicholas Liddell, Director of consulting

The Clearing

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January 25, 2017 | 5 min read

Charles Darwin has a lot to answer for.

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He promoted the idea of the world as a violent place where only the fittest survive. Many of us have grown up with a Darwinian idea of business as a fundamentally competitive activity – a “perennial gale of competitive destruction”.

Consequently, businesses are devoting too much time trying to get one up on the competition – fighting to get one over each other in small areas that don’t provide a benefit to the customer. This is the environment that many of us work in. But this ‘survival of the fittest’ environment only exists at the fringe; for the most part, nature is a case study in collaboration. How many millions of bacteria do we have in our stomachs? The new economy will only be characterised by the survival of the fittest at the fringe. Beneath that will be a massive, complex collaboration. Of course, competition exists. However, the ability to collaborate is as vital to success (arguably more so) than the ability to compete.

At a very basic level, the vast majority of businesses are part of a much bigger value network (or chain) comprised of energy providers, manufacturers, logistics businesses, distributors, retailers, users and data aggregators. The ability to communicate, collaborate and coordinate with other businesses in the same value network is fundamental to any single organisation’s success. Beyond this, the prevailing view of business as an essentially competitive activity is holding us back from entering potentially valuable alliances that would benefit businesses, their collaborators and their customers.

One of the most immediate benefits of a collaborative approach is that it provides a safe way to introduce new ideas and ways of working into a business. As an example, making steel is complicated. You have to train people to think in a certain way to keep a blast furnace ticking over. The same is true of aviation; you’ve got to think in a certain way because those planes need to take off and be safe. The nice thing about collaboration is you bring outside thinking into the organisation. You can’t simply tell a group of engineers to “think outside the box” and expect them to follow suit. It’s unfair because you’ve just spent twenty years training them to think in the box and that’s why their business works in the first place. For the most part, businesses succeed because they think in the box. Inviting people from outside the business to think differently allows that to happen in a safe, controlled way.

In the case of steel manufacture, ArcelorMittal is now investing in technology where waste CO2 will be made into jet fuel. Richard Branson will be flying aeroplanes on their waste CO2. It’s a completely new business model in a traditional, conservative engineering business run by engineers who tend not to like change (unless there’s a timeline and costs are planned out), which you can’t do in this case because there are so many unknowns. This is where an open-minded approach to business can really add value: finding new forms of collaboration with people you’d never expect to be working with. Who would have thought ArcelorMittal would be working with Richard Branson?

The concept of ‘win-win’ is corny but true. Virgin’s carbon problem and ArcelorMittal’s carbon problem can become an opportunity for both companies, but this means someone needs to invent a business model that gets CO2 from a waste plant in Ghent into an airplane at Heathrow airport with all the requisite safety checks in place.

Amazing things can happen as a result of collaboration; entirely new ways to unlock value emerge. Modern ideas about how value should be created, such as the Circular Economy, are a fantastic way to get people asking interesting questions they wouldn’t otherwise consider. What problems do we collectively face? If we were to work with our traditional competitors, what are the resources we could share that would be beneficial? Retailers are working on the modern slavery act and finding that collaboration is so much more valuable than audit. Organisations working with other companies in their industry and beyond are finding so much more that they can work with, that can move everybody in a much better direction. And the question ‘what have we got that we can share?’ is worth spending time on.

Tomorrow’s leaders won’t be the businesses that most effectively stamp on their competitors. The future belongs to those who can balance the art of competition with the art of collaboration.

Nick Liddel is director of consulting at The Clearing.

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