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Creating Collaborative Advantage

January 19, 2015 • Emerging Ideas, INNOVATION, John Sutherland on Leadership and Teamwork, SPECIAL FEATURES, Strategic Spotlight, STRATEGY & MANAGEMENT, Team Managment

By John Sutherland

Successful collaboration between businesses can have myriad advantages. In this article, John Sutherland talks us through four key aspects for successful collaboration and demonstrates how sometimes collaborative advantage is of far more value than competitive advantage.

Business looks through the prism of competitive advantage. Almost every book on strategy is based on the assumption that you want to compete with others in your sector and increase your market share, at your rival’s expense. Consequently, the well-worn strategic tools relied on in countless strategic off-sites, such as the SWOT analysis (Strengths, Weaknesses, Opportunities, Threats), are also predicated on the same assumption. But what if you have decided that you want to collaborate, rather than compete?

An increasing number of organisations and businesses are seeking collaborative advantage, as the most effective way of realising their vision. And there really are compelling reasons for selecting to work collaboratively for some organisations. Get it right and it takes you out of the fight for preserving your share of a commodity market and puts you in a place where the symbiosis between you and another organisation creates a new offering/service that is competitor free. But at the moment these vanguard leaders are struggling to find the tools that will enable them to make their collaboration effective.

Here is the health warning. It is not easy. In fact Chris Huxham, a leading researcher in the field, warns that you should only consider seeking collaborative advantage if the reasons for doing so are utterly compelling. Otherwise keep away. Many have tried and ended up with “collaborative inertia” rather than real progress. So, in this introductory article, I am going to set out the 4 factors that my team and I have found to be powerful aids, over the 20+ years that we have worked with collaboration and partnership work.

 

1. Towards Coherence

Ask those at the start of the journey towards developing collaborative advantage what is going to be crucial and they will, correctly, say that there needs to be clarity on the purpose of the proposed collaboration. What is the compelling mutual benefit and why does this make obvious sense to both parties? Indeed, this is where my own alternative SWOT analysis (Figure 1: Sutherland’s Cumulative C’s) model begins. It is an excellent starting place and I can attest that collaboration without coherence is very hard to achieve.

 

Figure 1: Sutherland’s Cumulative C’s

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Allowing the other organisation to be different, and tolerating them thinking and acting differently, is all part of the resilience required for effective collaboration.

Ask the same people after the first year of working together on collaborative advantage about primacy of coherence and they will tell you that the work on this never ceases. It is dynamic and as the journey unfolds you discover more and more areas where, what seemed like strong mutual agreement, in fact covered over real and palpable differences. This is more like gardening, with regular weeding required, than building a framework agreement and setting it in place. Baden and Tony were a case in point. They had easily agreed that, in outsourcing technology development to a specialist firm, there would be real mutual advantages to both parties, in terms of controlled costs for Tim and securing a large contract for Baden. As the first year rolled by it became clearer that for Tony the overarching purpose was to support his desire for “world domination”, whereas for Baden it was more about proving the validity of the collaborative model. For Tony collaboration was simply a means to an end but for Baden it was an end in itself. Not a showstopper but something that put a real edge in their unfolding partnership discussions.

This section is called Towards Coherence because, in practice, you never really fully achieve it but the constant quest towards it turns out to be critically important. In practice, what you need is to understand where your alignment overlaps and where it diverges. It is never going to be a complete match. But so long as you have enough in common, that is “good enough”. Allowing the other organisation to be different, and tolerating them thinking and acting differently, is all part of the resilience required for effective collaboration. You have to be different, and allow each other to be different, to collaborate effectively.

 

2. Assessing Collaborative Capability

Not every organisation can manage collaboration. A reasonable barometer is to check for collaboration within your own organisation before seeking to collaborate with another. Some people do not possess the emotional competence to collaborate and cling on to the need to be in control. Kevin’s team struggled to collaborate. When we worked with them it became clear why. As highly experienced precision engineers they had never found the need to focus on working relationships – they just got on with the job in hand. The idea that there was a need to focus on the quality, and clarity, of their working relationships was a complete anathema to them. We might have been speaking a foreign language. So a core capability is the emotional competence and willingness to attend to relationships.

Behind these so-called “soft skills” are a whole host of other capabilities to assess. What technical, practical and complimentary skills are both sides bringing to the table? The ability to be “brutally honest” about what each side can bring, and cannot bring, is of crucial importance. Firstly, for the obvious reason that you need to know what resources you can call on for your collaboration. Secondly, because this is an early opportunity to explore trust. If you can be straight with each other, and experience bears out what you are saying, then trust starts to grow. If there is any sense that you have misled, or been misled, then trust is damaged and, at this embryonic stage, may never recover.

One of the hidden capabilities to check for is time. I can give you a cast iron guarantee that the amount of time absorbed in setting up effective collaboration is more then you would expect at the planning stage. If you are already heavily time constrained this needs to be a serious consideration before proceeding.

 

3. Three Collaborative Paradoxes

No two people, let alone two organisations, can be in constant collaboration. It would be far too exhausting and time consuming. In practice, collaboration is just one of the “relationship modes” you need to be in. So, and here is the first of three paradoxes, to achieve collaborative advantage the first skill is to know when you need to be collaborating and when not. Much of the rest of the time you are getting on with the work to hand. But there are two other “relationship modes” that you need to master, both of which enable effective collaboration at the right time (Figure 2).

 

Figure 2: Contractor Model

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The first is “Contractor” mode. This is when you need to take instruction from the other organisation about how they need you to operate, behave or perform. In every collaborative relationship there are times when you need to simply do as you are told, without arguing back. The ability to respond to direct instruction and direction setting from the other party is a major building block for collaborative competence. So much so that, and here is the second paradox, it is in fact easier for unequal organisations to achieve collaboration than for organisations that are matched for power and influence. Some of the most successful collaborations exist between customer and a supplier, where the customer always retains the ultimate control and the supplier offers something of mutual benefit to both. In these cases there is no need to fight over who is in charge and how power is shared. It is obvious. The degree of difficulty and risk of collaborative inertia goes up as the organisations become more matched. In such cases the effort required to collaborate successfully grows exponentially, mostly around a simmering battle for power.

The other useful relationship mode is the “Expert” mode where you bring your unique contribution to the collaboration. There is something you do really well, which is the reason why you have a seat at the partnership table, and for collaboration to flourish you (and your colleagues) need to have room to excel at this, without fear of being told that you are not being “very collaborative”.

The mode to avoid is the “Survival” mode, which is an area all collaborations fall into at some point. This happens when there is a mismatch between what you expect from the partner and what you get, and what they expect from you and what they get. “Why are they doing that” is Survival mode’s signature tune. It is a painful place and quickly erodes trust. The main thing you need to know is how to get out of the Survival box as quickly as possible. The answer is the third paradox. The only way out of Survival is to go back into Contractor mode. That is to clarify what the other party needs from you. Any attempt to go from Survival back into Collaboration without going through Contractor first will fail, and only serve to erode trust further. You will save yourself a lot of anguish if you take my word on this.

 

4. The Work of Co-creation

The final part of the jigsaw puzzle is to actually do the work of collaboration to gain the latent advantage. In this practical “getting on with it” phase there are three issues to watch out for. The first is that, inevitably, the group involved in the collaborative venture broadens and new people join who have their own agenda, which can complicate matters immensely. Martin, a newly appointed purchasing manager for a retail firm, was keen to prove his worth by taking as much cost as possible out of the suppliers. He was a late joiner to a team that had spent nine months delicately developing a joint understanding of how to gain collaborative advantage through their supply chain. It went against everything Mark had learnt to resist the temptation to grind the suppliers into the mud rather than developing a symbiotic partnership.

The second is that it is always better to start out with modest aims and let trust grow through what you have achieved together, rather than talk forever about what you might achieve in the future. Actions do speak louder than words when developing collaborative competence between two different organisations, where business processes, cultures and values add to the complexity of turning potential into progress. So start small and build
from there.

Whether you choose to seek competitive or collaborative advantage the key is to make a deliberate choice. Just knowing that there is a choice puts you, already, ahead of the pack.

The third is that those at the sharp end of the action can easily get caught between the need to take decisions, so that progress is made, and the need to report back to other decision makers in their organisation, so that they keep their colleagues on side. Decisions can grind to a halt in a never ending round of “I’ll have to check that with my boss and come back to you” before momentum is lost and the potential remains unrealised. Back to the gardening analogy, sometimes what is needed is hacking away the bureaucratic undergrowth that threatens to engulf the tender new shoots of collaborative advantage. To collaborate and succeed sometimes you have to be brutal rather than “nice”. If you can balance brutality with partnership working you will do well.

When you have been round the cumulative C’s once you are ready to go round again, but this time with greater coherence, refined capabilities, collaborative competence and practiced co-creation. The work never finishes.

Whether you choose to seek competitive or collaborative advantage the key is to make a deliberate choice. Just knowing that there is a choice puts you, already, ahead of the pack. If you choose to collaborate you will find that there are, currently, few resources to help you make progress. Here are two tools that can assist, my own version of a SWOT analysis, geared to foster collaboration, and the Contractor model. It also helps to have someone working with you who has been down the path before. Let me know how you get on.

About the Author

photo-1John Sutherland is the Director of Strategic Resource, which assesses and develops senior teams in order to support them in achieving their business plan. He is a pioneer in the practice of developing collaborative advantage. Email john@strategic-resource.co.uk.

 

 

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