Collaborate to Compete

Michelle Cowan's picture

Staying ahead doesn't mean that your competitors can't improve. This week, I was reading Eric Lowitt's latest blog post for the Harvard Business Review: Why Your Company Should Partner with Rivals. So many organizations are afraid to open up and collaborate with competitors because they don't want to lose market share or give another organization undue advantage. What most organizations do not realize is that when an entire industry improves, it reaps the benefits.

When consumers are interested in and trust your industry, they will shop around and find you. Sure, they may find your competitors as well, but healthy competition will keep you sharp. Competition drives organizations to do what it takes to know and understand their customers. By collaborating with competitors, you increase opportunities for innovations and new ways of doing things.

The best organizations will improve, whether or not you help them. And if you are one of the best organizations, you will do the same. You might as well open up and share when appropriate. As long as you differentiate yourself from the competition, you can all learn from each other and benefit from new ideas. You don't have to share your deepest, most treasured secrets, but you can be open to exchanging ideas or improvement tactics.

This makes me think of benchmarking. At APQC, our data is confidential, but our studies are open. Organizations join collaborative studies and are willing to share. Everyone learns, grows, and makes valuable connections with others who can help them do business better. Sharing benefits everyone. There are plenty of ways to collaborate and share that do not involve divulging trade secrets. Organizations improve every day because they learn a new tactic from a competing organization or an organization in a surprising industry.

Too often, organizations limit their ability to improve by writing their own catch 22. "We can't compare ourselves to that organization or learn from them because it is too different from ours, in some far-off industry somewhere. But we can't compare ourselves to this organization or learn from them because they are our competition. We're too alike, and we can't risk it." It's silly, and I talk to APQC members who have realized the fallacy of this kind of thinking every day. The first breakthrough you get through benchmarking or collaboration will hook you. You'll know that it's okay to share.

In conclusion, don't be so high on your horse. Regardless of how much you hide or share with others, some other organization will one day surpass yours in some way. You might take back the lead. You might not. But why be afraid to help everyone do business better? It's better for you. Like Lewitt cited from Co-opetition by Barry Nalebuff and Adam Brandenburger: It's better to own 20 percent share of a $10 billion market than it is to own 75 percent share of a $2 billion market.

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