Co-opetition works when normally competing organizations come together cooperatively to serve a client. Today’s clients are demanding more value at less cost whilst technology is turning many traditional services into commodities.
Almost weekly we are hearing how traditional competitors are working more and more collaboratively together. Most recently in the IT arena we saw the announcement of the partnership between Microsoft and Red Hat which was driven by Microsoft’s commitment to offer unmatched choice and flexibility in an enterprise-grade cloud experience, across the hybrid cloud. Traditionally, a partnering strategy between two distinctively competing companies is not something we would be expecting yet co-opetition is the currency of the new economy.
Partnering helps organisations overcome a lack of skills and in some cases, capital. It permits forward-thinking business owners to be highly successful in the new marketplace. More and more we are seeing customers demand best of breed solutions delivered by organisations that are true experts. Being an expert in a number of areas requires significant investment and also scale. Yet partnering with a number of best of breed organisations enables you to deliver excellence to your customer and not give them a reason for pursuing other organisations and potentially leaving you entirely.
With a defined partnering strategy, when existing or new client’s demands are outside of your area of excellence, you are able to leverage and turn to one of your Partners for assistance on particular projects with clients. They too can also draw on your expertise to help with their client demands. As long as you have agreed principles that both parties abide by that details a clear delineation and understanding of where client ownership resides as well as a simple engagement model for your client, you are all able to become better providers of knowledge and solutions for your customers.
With that said however, various data sources on external collaborations and partnering suggest that many partnerships fail to achieve their objectives. One of the key reasons partnerships fail is due to lack of alignment between the organizations. Aligning the various constituencies around the same goals, priorities, expectations, and many other things is critical to success.
When considering a strategic partnering strategy consider the following four elements in identifying win:win:win outcomes for you, your partner and your customer:
- Strategic Value – will alignment deliver incremental value to customers?
- Cultural Fit – how aligned are your values and company ethics?
- Execution Excellence – do you have leadership buy-in and support to make it happen?
- Commercial Alignment – do the numbers stack up for both parties?
Would a partnering strategy help you grow your business?