Collaboration is no longer just a strategy for any business or industry – it is a vital component to long-term business success, says Fiona Hewitt.
The saying goes “no man is an island” and perhaps the same saying should apply to business as well. Look at most successful organisations now and you will generally find examples of effective strategic partnerships and collaborations with others.
Strategic partnerships are increasingly a vital element of a business’s growth strategy. In this globalising economy, strategic partnerships are helping businesses share knowledge and resources, as well as giving the potential of opening up new opportunities, markets and products.
The power of a great partnership can deliver to an organisation significant dividends that on its own it wouldn’t be able to either afford, access or potentially deliver in the same period of time. When most organisations are faced with constant change, innovation demands and competitive pressures; perhaps the need for strategic partnerships becomes even more amplified.
As that need is amplified; then so too is the need for partnerships or collaborative ventures to be successful. Rosabeth Moss Kanter, a professor at Harvard University, undertook a global research paper on 37 different companies in 11 countries and observed that there were three core components that ensured effective business partnerships:
- Collaborative relationships must yield benefits for the partners, but they are more than just the deal. They are living systems that evolve progressively in their possibilities. Beyond the immediate reasons they have for entering into a new relationship, the connection offers the parties an option on the future, opening new doors and unforeseen opportunities.
- Alliances that both partners ultimately deem successful involve collaboration (creating new value together) rather than a mere exchange (getting something back for what you put in). Partners value the skills each brings to the alliance.
- They cannot be “controlled” by formal systems but require a dense web of interpersonal connections and internal infrastructures that enhance learning and collaboration.
Productive partnerships in her study showed a strong compatibility and alignment in the legacy, philosophy and desires shared by both organisations that went beyond short term agreements and outcomes. This shared approach provided the environment for new and further opportunities to evolve as the partnership did.
Kanter saw that the true power of business relationship was when it was more than just a deal, she observed that it was the commitment between otherwise independent organisations to consistently pursue the collaborative advantage. Furthermore, the potential open-ended value is when, and where, the “magic” happens with partnerships.
Some examples of how strategic or collaborative partnerships that have made a difference to market are:
- Spotify, the successful music-subscription service, partnered with social media giant Facebook and discovered that this alliance boosted revenue. The end result of the collaborative partnership is that Spotify users who linked their account to their Facebook account are three times more likely to become paying subscribers than those who don’t.
- Coca-Cola and ECO Plastics. The multinational corporation Coca-Cola Enterprises (CCE) Ltd and the British firm ECO plastics have collaborated to run a recycling plan in Lincolnshire, UK. Their agreement marks a turning point in industrial processing of plastic waste in the UK. With this collaborative project, CCE has established a firm commitment to recycling of its containers and in exchange CCE will receive high-quality recycled containers for use in the UK.
- NASA and LEGO; certainly seems like an unlikely alliance but both parties operate in a collaborative manner where astronauts use Lego models and toys in the International Space Station (ISS) to demonstrate certain scientific concepts and to perform various experiments, such as observation and analysis of small machines under microgravity. These machines include Lego versions of satellites, a space shuttle and a scale model of the ISS. NASA in turn, has provided Lego with ideas and educational materials for the toy company’s collection, Lego City.
Collaboration is no longer just a strategy for any business or industry – it is a vital component to long-term business success. Businesses that leverage collaboration and the ‘collaborative advantage’ will be the ones who win the game and succeed in this new global economy.
Healthy competition still remains good for the market and consumers but perhaps with more collaborative partnerships we will all end up better off – greater innovation, greater choice, greater products and ultimately greater businesses.
