Collaboration not competition

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From Gilbert and Sullivan to Gilbert and George, YTKO programme director Helen Trudgeon highlights the importance of collaboration

Over the last six months, we have laid out how Business Collaborations work, taken you through the Five Phase process and given you some examples of successful collaborations we have already worked on. So now, you should have a clear understanding of how a business collaboration works.

What we have not addressed in detail, however, is the reasons why businesses should collaborate, particularly in an established corporate culture where competition is the norm, as part of the fight for market share.

“Collaboration can improve a business’s performance, increasing both revenue and market penetration”

The simple answer is that collaboration can improve a business’s performance, increasing both revenue and market penetration. The traditional view is that there is a finite number of clients for your business, whether you are selling a product or a service. So if your competitor wins a client, there will be one less for you to gain.

But if we turn this view on its head, and assume instead that there are more than enough clients for everyone, then it actually becomes possible to look at your marketplace as something that can be grown, through educating them about the advantages of your product or service. In short, the marketplace is big enough for more than one business, provided businesses make the required effort to identify their customers.

Another false assumption is that you are in the same business as those you may consider your competition. Whilst you may both offer the same product or service, each business remains unique, in terms of how you choose to run your company and how you serve your customer. In every case, one business will be a better match for a particular customer than the other – it will answer more of the customer’s needs, values will be more aligned and the product itself will be a better fit.

In a mature market, when the above two points are understood, it naturally follows that there is no advantage to be won from competing. This then opens business up to the far more exciting possibilities of collaborations, joint ventures, partnership working and strategic alliances, where everyone wins – both businesses and customers.

Customers win because it reduces the number of choices they have to make and therefore the time spent making those decisions, particularly if they understand clearly that supposed competitors are actually working with each other. This also increases their satisfaction and trust in all the businesses involved.

Businesses win because satisfied customers are more likely to place repeat orders, leading to increased turnover. Satisfied customers are also more likely to recommend you and your business to friends and colleagues, again leading to a larger marketplace and again, increased turnover.

Many great achievements are a direct result of collaboration instead of competition, in many different areas. In the field of innovation – the motor car, insulin and space travel – none could have been achieved without concerted collaborative efforts by individuals working towards the same goal, whilst the world of the arts and music is littered with successful collaborations from Gilbert and Sullivan to Gilbert and George.

And this is the key strategy of any successful collaboration – absolute clarity of purpose and the understanding that the collaboration is more important than the individual entities.

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