Thought Leadership

This is the inaugural entry for a series of articles I will publish on the topic of Collaboration. Collaboration becomes ever more critical in the current environment of continuous technology changes, increasing expectations of customers and seemingly regular disruptions in the economic, political and social order.

Looking back we lived in a very different world when I began my career in 1994; no email, Slack or Zoom Video-conferencing to communicate with work colleagues, customers or even loved ones. I can still remember using pay phones in airports during layovers which required me to walk around with a supply of quarters. It was also a time when the term “Uber” was known singularly as the German phrase for “Super” and renting VCR tapes was still very much in fashion (in the US primarily from now-defunct Blockbuster Video) as streaming entertainment content was still several decades away.

By established management theory, the main principles of successful business have remained constant over time, including differentiating products and services through innovation, developing deep customer intimacy and building organizations based on strong values, trust and talent. On the other hand, the driving forces in the commercial sector have changed quite dramatically over the past 25-years with globalization, expanded communication links via the internet and rapid technology shifts becoming the norm shaping 21st century industry and society.

(NOTE: the current environment of “trade wars” and increasing nationalism will once again impact the direction of business in the short term although success factors hold over time).

Over the next months I will publish a series of articles sharing what I believe has become the key success factor influencing how we must now manage businesses and relationships in the current environment. Collaboration, such as increasing the practice of cross-industry, and cross-segment partnerships, may provide a significant competitive advantage for companies open (enough) to accept the value of welcoming in partners for co-creating dynamic solutions that both thrill customers and create new market opportunities, otherwise left untapped.

A general definition for Collaboration is “in the context of business, allow people to work together in achieving a defined, common business purpose” (businessdictionary.com). Collaboration is considered an important method to more efficiently, effectively, and creatively reaches desired outcomes when compared with independent thinking or based solely on individual efforts. This sounds straightforward but much more difficult to implement and is a challenge both inside (with co-workers) and outside (with customers or suppliers) organizations as they attempt to meet a range of objectives.

Over the past few years’ macro trends including slower economic growth, exponential speed of technology change, and increased pressure for faster development cycles have created a need to more closely align these realities with corporate strategies and corresponding innovation processes. In fact continuous innovation is no longer a “nice to have” in a world where virtually every company has become a technology business, in response to the impact of the Internet, Digitalization of everything, and cultural shifts causing huge disruptions.

Moreover the difficulties generating innovation today inside Corporates most often begins with the hopeful expectation that the people in charge of running the day-to-day business can allocate the time necessary and are adept enough to generate and experiment with game changing ideas; this happens to be a well-documented myth.

As a way to address these challenges, successful companies seek to leverage Collaboration by developing external partnerships as a central part of their innovation strategies. This permits a more effective way to gain new technical or commercial capabilities, De-risk “unknown” disruptive factors inherent in innovation projects and share the significant investment requirements most often found in these endeavors.  

As an example, just think about the major disruption and changes currently evolving in the automotive space with electric and autonomous vehicles as well as ride sharing on the cusp or already in the mainstream. This has caused companies from wide-ranging industries to form non-traditional alliances in this newly created “trillion dollar” mobility vertical (General Motors/Lyft, Fiat Chrysler/Google, Volvo/Uber, Intel/Mobileye…and on and on).

Another recent example of this phenomenon is how well-known industrial conglomerates such as GE, Siemens, and Bosch have dealt with the increasing reliance on digital technologies. With these technologies they now assist customers to generate productivity gains within product and services offerings that greatly depend on data analytics and advanced software using artificial intelligence and machine learning. Software capabilities at this advanced level are by no means native for these firms and have required them to spend billions of dollars in recent years adding new software and automation expertise. These critical additions have been acquired through various collaborative associations with small start-ups, via strategic alliance or within corporate incubators, M&A, as well as minority investments that bring them required competences to deploy new business models.

Many more positive examples exist that highlight the advantages of “going for it” together to address the business opportunities arising from the challenges of our time. Moreover, there are consistent themes found within these examples that exemplify how leveraging Collaboration with a proper approach can be used as a key competitive advantage:

● The importance of a well-communicated strategy by top management that signals full support for collaboration activities to help overcome the “not invented here” syndrome and other internal hurdles that can only be addressed by strong leadership

● As part of a clear communication strategy to all employees, it will be important to articulate what the company’s focus will be (Who we are!) and which are the capabilities truly core to the business so the focus of internal activity is clear and recognizing we can’t do everything ourselves as much as we’d like think so

Once communicated, Collaboration becomes an excellent option to consider addressing those requirements that fall outside the core business. Main considerations include how fast can the collaboration be accessed and by evaluating whether a partner can do it better or less expensively to meet the objectives

● We see several ways companies choose to collaborate with partners in terms of venues, like innovation labs, or in the types of partnerships, such as joint development agreements, licensing models or by making minority investments. Increasingly companies use digital tools to collaborate over long distances and can rely on new emerging technologies that will add further choices in the future to support successful partnerships. M&A is also still a well-used method although typically bringing the highest risk; however in cases where speed is paramount there are examples where acquiring an “unproven” entity may be worth the risk

● Expert collaborators have common operating models and playbooks that have brought them success with culture, talent, methods, proper measurement of results and dedicated organization commitment being key dimensions. As example, having skilled project managers that are fluent in the languages of both start-ups and Corporates and provide that critical link as challenges arise is found to be a key success factor in these ventures. Finding those skilled people is not easy and in many cases requires letting employees spend ample time outside the organization to develop multi-views.

The next articles will focus on each of these themes to show the positive impact Collaboration can have to support achievement of a firm’s strategic goals. I’m hopeful the posts as well as examples given will ultimately offer insights that are helpful to those readers responsible for driving innovation in their companies as well as for managing key strategic relationships. Moreover, it will be most valuable if the ideas and thoughts are transferable so they may become actionable within your own projects.

Of course I welcome comments and feedback as this will only add to the knowledge base we all have to learn from.