All together now

It might seem anathema to some businesses, but are there advantages to be found by working with your competitors? Dr Liz Alexander looks at collaboration in action

It"s a rough and tough old business world out there. No matter what sector your company belongs to - from technology or finance to retail or tourism - everyone is scrapping hard to fight their corner and make their business stand out, while at the same time trying to find that elusive "competitive edge". In the immediate aftermath of the recession, it was difficult enough just keeping a company afloat, but as the general economic outlook improves, firms are expanding and going after business once again.

But just how do you push forward when you might not have the manpower, the funds or the expertise to capture a bigger slice of the pie? The answer for many businesses lies in collaboration.

Whether you call them partnerships, alliances or joint ventures, collaborating has been around since humans first recognised the value of cooperating with others to achieve shared goals. But collaboration can often mean teaming up with an "enemy", and it"s this idea many people have to get over when asked to partner with a competitor.

Take law firms CM Murray, Hierons and Maurice Turnor Gardner, who, along with accountants Buzzacott, formed the Professional Practices Alliance (PPA) in June 2014. The aim? To create a one-stop seamless service typical of "magic circle" firms, but also with the in-depth specialist knowledge for which boutique firms like theirs are known.

“A number of recent changes affecting the profession meant we couldn"t continue working the same way,” says Corinne Staves, a Partner at Maurice Turnor Gardner. “This collaboration serves our clients better by drawing from different perspectives and vantage points, not just the aspect of their business we each happen to specialise in.

“Let"s say two Jersey-based professional practices want us to help them merge. The client still has one point of contact but through this collaboration we can be more nimble and adaptive to their needs,” explains Staves. Those needs might include employment law, partnership law, mergers and acquisitions, risk and compliance or outsourcing payroll and HR - all of which are offered by the PPA partners.

And they"ve managed to avoid any conflicts and drama. “We"re all honest about what we can do and how our services overlap, because stealing each other"s clients isn"t the way we want to do business. These conversations aren"t something you think about once and then stop - they"re ongoing,” she adds.

Shared goals

In this case, the PPA partners were from the same, or closely related, worlds, but collaboration often happens between very different parties. Irrespective of which is the case, the point of collaboration is for parties to work towards a common goal. Yet often the biggest challenge is in knowing what that goal should be. Take the Brompton Dock initiative, for example.

Brompton Bikes have built innovative, hand-made folding bicycles and sold them at premium prices since the early 1980s. But increased competition from bigger businesses made Brompton realise that it could soon be out-produced and out-priced. In an effort to grow the brand and become more attainable, the company began a bike-hire offshoot called Brompton Dock.

They partnered with universities, local authorities, corporates and train operators who bought the bikes and the docking stations, putting them in key locations. Brompton covered the cost of monitoring and maintaining the bikes, and both sides shared the revenues from membership fees and tariffs. But the plan wasn"t working, so Harry Scrope was brought in to turn Brompton Dock into a success, or wrap it up.

Scrope saw huge unrealised potential for folding bike hire at Manchester"s Piccadilly station, but unless he could convince Virgin Trains, they were going to shut him down. By promoting bike hire through search engine optimisation, social media and posters, Scrope helped stimulate local commuters" interest and more than tripled membership of the initiative. Since only 40 per cent of bikes need to be hired for the project to break even, Scrope had a financial incentive to offer Virgin. But he chose to offer a bigger, more compelling vision.

“I pointed out that Virgin business is green and that by collaborating with us they have a fantastic PR tool in not only promoting a quality British brand but being a change agent for how people commute - by reducing their carbon footprint, and engaging in a greener, healthier way of living. At that point the Virgin executive said, "I"ve heard enough - give these guys what they need",” says Scrope.

Of course, all of this begs the question: how do you find a partner to collaborate with, and, more importantly, how do you make that collaboration work? For the four firms that make up the PPA, this was a no-brainer - they were already working closely with one another. It simply took Claire Murray, Founder and Managing Partner of law firm CM Murray, to suggest formalising the arrangement, without forcing a legal obligation or losing their professional independence. The relationship is fluid in being non-exclusive - there is no fee sharing and no referral fees, simply a shared ethos of doing the best for the client.

“For us, it"s more of an understanding,” explains Staves. “Aside from being honest with one another, we also share a common culture and outlook in the values among the four firms. We will obviously have to constantly review this as the Alliance gets bigger.”

A new paradigm

When it comes to setting the parameters at the beginning of a collaboration and setting up the processes to effectively assess its success over time, Jacob Morgan, author of The Future of Work and Co-founder of FOW Community, says: “The important thing for any organisation to figure out is why they are seeking to collaborate to begin with. Once you understand the "why" you simply attach relevant metrics that allow you to measure it. Then you should benchmark and look at the numbers periodically to see if you are moving in the right direction. Or you can do what many other companies do and just realise that collaborating is simply the new way that work must get done, and accept it, without spending additional time and resources trying to measure it.”

Perhaps unsurprisingly, a number of innovative partnerships have emerged from the technology field - from Microsoft"s collaboration with Toyota "to jointly fabricate a software platform dedicated to managing the information systems for electric vehicles", to the recycling venture between the Coca-Cola Company and the UK"s ECO Plastics aimed at "more than doubling the UK"s ability to recycle plastic for reuse in new bottles".

While this might suggest the tech sector is especially good at establishing and managing collaborative ventures, Morgan says: “I find that whether or not companies will be successful at collaborating to be less of an issue of what sector you"re in and more about what types of leaders are at the helm of the company. If you look at leadership and the corporate culture of an organisation, it"s much easier to gauge and predict what type of company will perform better.” (See box below left).

Just don"t let the excitement of a clever idea and the business opportunity blind you to potential difficulties and downsides. “The key thing is being upfront at the start,” says Scrope. “While it"s easy to find common ground, the other partners" agendas might pull everything apart.”