Coalition is, understandably, the term on everyone’s lips at the moment. The concept gets some tough press politically, yet the real opportunities lie in a business context. According to management guru, Peter Drucker, ‘Alliances are where the real growth is.’
It’s an assertion that is in total disconnect with the language of competition: It is a commonly held view that competitors are the enemy, that this is a war in which no holds are barred and no prisoners taken. But during this era of New Politics, whatever we think of that, comes New Profitability!
However, in practice there are countless examples where the opposite is true. Collaboration between adversaries is expanding rapidly and widely – and the best collaborators are also the most intense and successful competitors.
Andersen Consulting found that consistent high performers had almost three times as many alliances as the low and the medium. Barry J.Nalebuff and Adam M.Brandenburger coined the term ‘co-opetition’ to describe a new world of companies working in alliance. Co-opetitors abound in information and communications technology, because no company, however mighty, can supply from its own resources all the hardware, software, connections and distribution that customers require – and it’s customer needs that drive co-opetition.
Seizing these chances is so imperative that one electronics executive, speaking to Andersen, said: ‘I would give equal emphasis to competition and collaboration…it is as important for us to work with the competition as it is to beat our competition.’ That’s a practical expression of what Nalebuff and Brandenburger expound as ‘game theory’. The theory holds (irrefutably) that the company and its competitors form part of the same ‘business system’: that system is their shared ‘game’.
We all have common interests with other players: for instance, getting the largest possible combined ’score’. The idea is to enlarge the pie, as well as your share.
Collaborative working is the key to New Profitability – let’s hook up and play the game.
