Non-disclosure agreements and cryptic press releases have traditionally been the norm when conducting business partnerships. “They’ll steal our work,” is a phrase parroted by startup entrepreneurs and corporate leaders alike. But as the world opens up to working together to achieve our goals (even if it means splitting the spoils), companies are also coming around to the idea that, while their intellectual property should be protected, this secrecy should not come at the expense of innovation. Welcome to the world of competitive collaboration, where everyone can win.
What is Competitive Collaboration?
Collaboration within business is not a new concept. Organisations have always found ways to create mutual value, and the growing ease of sharing data and information is only accelerating the rate at which collaborations are happening.
However, collaboration between competitors is still largely avoided as a rule of thumb. It’s a common human trait to view those similar to you as your competition, and thus conclude anything which benefits them will hurt you. You are, after all, often vying for the attention of the same group of customers and it’s easy to think that you have to be ‘better’ than anything else operating within the same space. However, a change in mindset, from viewing similar companies as the enemy to viewing them as peers, allows for the emergence of healthy and viable collaboration opportunities which turn a threat into an attractive benefit.
A study by the Multidisciplinary Digital Publishing Institute found how attractive these benefits could be. The study found that collaborative competition, when conducted over a period of time from three to five years, had a more than 50% chance of mutually reducing company costs.
Vertical recently orchestrated a collaboration between competitors in the pharmaceutical industry. The project brought together global market leaders in pharma to identify the current state of the healthcare industry, suggest possible innovation development scenarios for pharma companies, and build an industry-wide vision for the companies to communicate and work towards. In this example, a comprehensive understanding of the industry is best made possible by uniting the industry as a whole. The resulting work benefited all collaborating companies, as the research focused on the joint goals of furthering patient support and improving care, and ensuring that the pharma industry can continue to have a purposeful role in the holistic care of patients in the next decade. You’ll be able to read more about this example in our upcoming case study.
When should you implement competitive collaboration?
Competitive collaboration can be suitable for every business and its competitors. In order to achieve a win-win situation, it’s crucial for all parties to have a clear understanding of their own capabilities and resources (this includes human resources, intellectual property, and financial resources, among others) and know the ways in which they are unique. Collaborating in a domain where one party already has a unique advantage will do little to benefit the more experienced of the collaborators while potentially decreasing this advantage by strengthening the competitor’s previous weaknesses. But when both parties excel or struggle in similar ways, or are trying to achieve the same outcome, an opportunity for joint value valuation through sharing knowledge and resources can be discovered.
Companies may also choose to collaborate with competitors when the shared goal is for the greater good or has an impact focus. In these cases, the parties agree to set aside business goals and instead focus on the value created together.
Every rose has its thorn
While competitive collaboration has many positive sides, it’s not without its risks. Things to take into consideration include ensuring that intellectual property distribution and ownership (who owns what work and results) should be clearly defined at the beginning of the partnership. Do both parties have equal rights to the work? Does one party need permission to publish the results of the collaboration? What happens if one party wants to continue the work independently? By thoroughly examining the intellectual property implications of a project, you will be able to further de-risk the collaboration. It is also advisable to ensure that any possible regulatory challenges resulting from sharing data or information with a competitor are known and the proper precautions taken to ensure compliance.
How can you get started?
Engaging in competitive collaboration can give your company unique opportunities to learn from industry peers and solve mutual challenges in the pursuit of joint value. Following a clear process to discover and map out this joint value can save you valuable time and help to secure better collaboration outcomes.
By the way, Vertical has developed a tried and tested method for doing just that: we call it the Joint Value Sprint and with it we have helped dozens of companies build mutually beneficial collaborative business relationships. The Sprint can take place over some hours to a few days and will give you the answers your business needs to kickstart your collaborative project.
Want to learn more about how we can help you in collaborating with your competitors and reaping the benefits of joint value? Email us at email@example.com!