In an increasingly competitive business environment like ours, it makes perfect business sense to employ the entire arsenal of resources one can muster to ‘beat off’ any competition. It is understandable to compete as hard as one can to stay in the game. In this dog-eat-dog world of ours, no one will begrudge any business for fending off the competition with a big “BAMN” i.e. By Any Means Necessary.
However, I have come to understand that sometimes the best competitive strategies might not be enough. What should businesses do with competitors who refuse to budge and, as the phrase goes, are “here to stay?” I have a suggestion. I must however caution you that my idea might sound a little bit ‘insane’ but hear (or rather, read) me out before you call the Psychiatric Hospital. I came by this idea from much readings and also from a remarkable lesson I learnt from, no other place than, my favourite school; The Street School of Hard Knocks. The advice is this: Sometimes the best way to compete against your competitors is to collaborate with them!!!
This is the trend referred to by some people as “Co-opetition” and by others as “Competilaboration.” Intra-company collaboration makes sense but collaborating with competitors may sound like a contradiction in terms, nonetheless it works. I have seen it work. I have always been cautious to ‘buy into’ strategies just because some ‘guru’ says it is a right strategy. I am also not one to go broadcasting the virtues of an approach unless I have seen it working. Readers might be wondering how the above approach would play out on the streets of Accra, of all places. But that is what I intend to narrate to you.
I found myself in a taxi coming towards the Kwame Nkrumah Circle one weekday morning as I came to town for a meeting. The other passenger in the car was a woman. As is to be expected we were caught up in traffic along the way, and as usual, the street vendors and hawkers “came calling.” The lady passenger called one of those young boys hawking candies shouting ‘Tom- Tom’, ‘PK’ ‘Mentos’ and inquired if he had Original Hacks. The young man replied in the negative and the woman placed her money back into her purse.
However, this boy did not leave the side of our car as it slowly moved along. He then did something I am sure most ‘businesses’ would not do. He began calling out to the other vendors inquiring from them if they had Original Hacks. What was more remarkable was the genuine interest and vigour he had in trying to get the woman this product at all cost. Though he did not have the product, he was going all lengths to ensure that the woman was satisfied, even calling to fellow competitors.
After a couple of futile attempts at getting the Original Hacks, he turned to leave the car. It was then that I saw the fruits of Co-opetition. The woman, obviously impressed by the young man’s attempts, called him back and to my surprise decided to settle for some ‘Tom-Toms’. These were the same products she had rejected a couple of minutes before then, and here she was gladly purchasing them.
This is the ‘phenomenon’ of Co-opetition at work; a practice where businesses in seeking ways to better treat their customers would not mind recommending their competitors to their clients, if the competition is in a position to better serve the customer.
Its greatest advantage is that it creates a positive image in the eyes of the customer that you sincerely care about their welfare and that you are not only out to “separate them from their money.”
Though this young man was doing something that was ‘normal’ to him, he was, in actual fact, applying an approach that international businesses have been utilising for some time now. For instance, automobile giant BMW is currently in talks with its arch-competitor, Daimler, to produce and purchase vehicle components including engines. An article, I read once, in the Wall Street Journal indicated that the German archrival luxury car makers have realised that collaboration may give them “bigger economies of scale to prevent further erosion of margins.” Each company is expected to adapt the components in different ways to complement each brand. The deal is considered a win/win for both firms.
Co-opetition, especially in the automobile manufacturing industry, has been around for sometime now. Ford and Toyota have a history of both competition and collaboration. In the 1930’s, Ford allowed Toyota leaders to study its production techniques, even though it was aware the Japanese were going to use the technology to produce their own brand of cars. Some have argued that it was a mistake on the part of Ford to have allowed their competitors to view their production techniques. Toyota is fiercely competing with Ford in the US.
However it may interest readers to know that Ford President and CEO Alan Mulally and Mark Fields, Ford’s head of operations for the Americas, recently met with Toyota Chairman Fujio Cho and other top Toyota executives in Tokyo. It was reported that the meeting was to explore environmentally-friendly technology including hybrid-electric and hydrogen fuel systems and ways that Toyota can help Ford boost manufacturing efficiency. That is the power of Co- opetition at work.
It seems Ford Motor Company has a thing for this practice. It has been further reported that the company has a shared technologies program, where engineers and executives of Mazda (partially owned by Ford), Ford Europe and Volvo co-operate to cut down costs of developing specific small car models. Ford benefits by reducing competition among its brands and increases the sharing of best practices. Many examples of collaborative efforts exist in the automobile industry. General Motors, Daimler and BMW are reported to be coming together to develop hybrid cars whilst like makers of the Smart car are also said to be collaborating with Mitsubishi for engine development.
Many organisations are realizing that the lack of collaboration can impede progress. This approach, albeit tough to initiate, creates a balance between the two opposing but complementary entities. This balance, in turn, can create significant economic value, particularly when the collaboration involves common processes that provide no competitive advantage. In some parts of the world, universities have to collaborate to acquire research funds since failure to do will result in all parties losing out on the funds. Even the profit- oriented football clubs sometimes have to collaborate (off the field) to survive their intensely- competitive environments.
An interesting analogy I came across concerning the importance of collaborating with competitors is that of vehicles travelling on a road. When a vehicle attempts to overtake another, the one being overtaken can decide to speed up to block the way (Competition). This
can however endanger occupants in both vehicles. However, when a car wishing to pass moves into the lane with oncoming traffic, cars in both lanes can decide to move to the shoulder and make a path for the passing car (Collaboration). Though this comparison might be a bit implausible, it indicates that sometimes total strangers must join together for a common goal— staying alive. Failure of road-users to collaborate may result in catastrophic consequences. (I hope some drivers get to read this article.) On the road you either collaborate or collide. Likewise, companies that fail to collaborate are on collision courses. In our increasingly competitive business environment companies must collaborate or risk losing their customers and ultimately lose market share. Survival on the Ghanaian market increasingly requires collaboration.
Some banks had better start thinking in this direction since failure to collaborate with others might result in fatal ‘crashes’ on the business highway. Already we know of co-opetition amongst some banks on shared IT platforms for ATM and other services. Others should follow suit. I dare suggest that even the players in our interesting telecommunications industry should move in this direction.
Wouldn’t it be appropriate to switch from one network to another without having to totally change numbers? I will however caution that Co-petition only makes sense if it will result in saving money for everybody involved without risking marketplace position or advantage. The number one reason why competitor should ever collaborate is when the collaboration creates value for all.
So there you have it. Next time you feel the urge to cross over to the other side of the road and beat the living day lights out of your ever-persistent competition, take a step back and consider Co-opetition or rather, Competilaboration.
Author: J N Halm
