From Competitive Advantage to Collaborative Advantage

The last 100 years of business wisdom in the West has been dominated by the notion of Competitive Advantage, whereby a company or enterprise develops a product or a set of capabilities that confers some kind of unique advantage versus its competitors, ideally over an extended period of time. The concept was championed by Michael Porter via his tomes, “Competitive Advantage” and “The Competitive Advantage of Nations”. Essentially Porter’s theory is Charles Darwin for business people. Here’s an account of our recent evolution from the agrarian through the industrial to the information age.  It is not clear from this infographic whether intelligence has increased …

If Dinosaurs ruled the Earth ...

If Dinosaurs ruled the Earth …

It’s time we moved to the notion of Collaborative Advantage in a joined up world. Innovation is now so complex that it is rare for the capabilities and intelligence required to convert a new idea into a sustainable business, product or service to reside within one individual or discipline. Alongside this, the impact of our actions on the world has become correspondingly greater and we must therefore look to collaboration as a tool if we are to have a chance of making the world a better place.

But, it’s not easy. As with Darwin’s ideas about competition, the human condition tends to place emphasis on looking after number one as a priority, especially when under pressure. So voluntary activity is necessary but not sufficient to achieve the required changes. On the positive side, some companies are taking the lead in setting the conditions where collaboration is seen to be a better option than going it alone:

Unilever are at the forefront of innovation through collaboration, offering incentives for individuals to come up with ingenious ideas. So too are many small entrepreneurial start up businesses, assisted by crowdfunding. It really is possible to be small and global now. I wrote recently about the power of Collaboration for Sir Richard Branson’s Virgin Entrepreneur blog. Read the piece here at Collaboration and Crowdfunding.

At a personal level, I was recently invited to give a guest keynote and collaborative musical experience at Henley Business School. Collaborating with people and organisations that you don’t own or control is a completely different animal compared with the traditional organisation model and it requires a completely different type of leadership. I am delighted to be associated with an institution that understands the difference and designs it into their Executive Education programmes.

We were blessed to have a guest appearance from Patti Russo, Meatloaf’s long term female singing partner. I’ve been working with Patti to develop the next stage of her career and she kindly agreed to come along as a special guest. Patti is a living, breathing example of someone who has collaborated with some of the biggest egos on Planet Earth. She performs with much of rock’s royalty including Cher, Queen and in the theatre with the LA version of “We Will Rock You”. A magical moment was when we launched into “Dead Ringer for Love” during the live performance part of the evening. The entire audience of leaders stood up to salute her! I was also privileged to do an acoustic “aftershow” with Patti in the bar at Henley, where we performed “You can’t always get what you want” and “I would do anything for love”, which included some great delegate collaboration.

I would do anything for love - with Patti Russo and Masterclass at Henley Business School

I would do anything for love – with Patti Russo and Masterclass at Henley Business School – Click the picture to book Patti for a unique experience

I’m also delighted to have been invited to join a global collaboration with Nadine Hack for a more sustainable business world. Nadine’s contribution to finding joined up solutions to complex world problems is unparalleled and she has started this network to continue and accelerate her work.

Screen Shot 2014-11-15 at 10.31.20

Nadine Hack – Leader of a Global Network for a more sustainable world – click on the picture to find out more

Action Points

  • Competitive Advantage must be matched with Collaborative Advantage
  • Collaboration is easy to say but runs counter to many people’s DNA, so we must work hard at it
  • The internet can facilitate enterprise through collaboration via crowdfunding. See Sir Richard Branson’s articles on Collaboration Virgin.com for more on this
  • Leaders can learn to collaborate if they choose to. Please get in touch with Nadine Hack or myself to discuss collaborative leadership

To finish, here’s a song from Patti that literally sums up idea of being “under pressure”:

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Getting engaged? – An interview with Nadine Hack

keep-calm-and-pull-your-socks-up

Introducing Nadine B. Hack, CEO of beCause Global Consulting and Executive-in-Residence Emerita at IMD Business School.  We’ve been talking online for a few years now and she offered me this guest post recently.  Given my recent rants about how the UK plc needs to pull its corporate socks up on issues of client and customer relationships and engagement, Nadine’s post here is rather timely.  Here’s a picture of Nadine with a politician:

Nadine-Hack-Barack-Obama-2004-US-Senate-primary-campaign

be the Cause you wish to see in the world

How deeply engaging stakeholders changes everything

An airline company sues an online ticket provider.  Fishermen from the Gulf pay a visit to an oil firm in London.  An investment brokerage is accused of misleading government.  Today’s headlines could be quite different if more companies embraced efforts to engage stakeholders.

More companies understand that a broader spectrum of internal and external stakeholders has a direct impact on their core business.  Those that have engendered deep levels of engagement – what I call strategic relational engagement (SRE) – are far more successful in shaping that impact to their advantage.  Studies show how employee and customer engagement are intimately connected and, taken together, have an outsized effect on financial performance.  Check this TEDx video out featuring Nadine:

So, for your company to sustain its competitive advantage, SRE – multi-directional, engaged relationships that unleash people’s greatest potential – is no longer an option but an imperative.  But many companies don’t know how to effectively create or sustain this.  So, let’s look at two examples:

Creating value through engagement

Nadine Hack opening the Stock Exchange

Nadine Hack opening the Stock Exchange

In the mid-1970s the major logging company Weyerhaeuser, environmental activists and the California government were arch enemies.  But their eventual collaboration led to the creation of “Investing for Tomorrow’s Prosperity.”  As a cross-sector team, they moved from reforestation to fisheries and then to all renewable resources, which ultimately became the blueprint for Global Green Plans.  How did they do it?

They found individuals within each stakeholder constituency who had the capability to see beyond their own perspective.  They jointly created conditions for safe dialogue by identifying inviolable principals and areas where the stakeholders were willing to compromise.  They developed processes for “see-the-light-early” catalysts to lead others from their respective constituencies.

Tactics that distinguish this case’s effective use of SRE included strong bonding experiences like neighborhood tree planting parties with cookouts and dancing that allowed all stakeholders to discover the humanity of “the other”.

Editor’s note, this is classic OD stuff in action and takes time to do well. Here’s one of the most helpful resources I constantly come back to re diagnosis Organisation Development dilemmas:

The OD Matrix

The OD Matrix

Companies must find at least one stakeholder who can create a trusting environment where people truly listen, hear and try to put themselves in the others’ shoes.  Ultimately, all stakeholders must develop a clear grasp of the shared goals and determine how their respective goals will align.  Business leaders who are able to do this will succeed.

Engagement leaders as über-catalysts

In 2000 global activists were protesting at AIDS conferences with signs, “Coke kills workers in Africa.”  Though Coca-Cola had the best policies in Africa for AIDS prevention, protection, testing and treatment of its own workers, protesters demanded that the company should provide the same services to its bottling affiliates, which were completely separate entities. Coke, however, felt it could not justify extra expenditure for its affiliates.

How could they overcome this impasse?  Über-catalyst engagement leaders from all sides encouraged SRE through dialogue, successfully allowing antagonists to see each other as human beings who actually cared deeply about the same outcomes.

Coke's-neglect

Through SRE Coke realised that serving its bottling affiliates’ employees was in its best interest; if they became infected, it would affect Coke’s entire supply chain.  They also saw that the public didn’t distinguish Coke from its affiliates, as activists were negatively impacting Coke’s brand. And AIDS activists acknowledged that while they got media coverage for blasting Coke, their attack strategy was never going to change Coke’s policies. If they really wanted workers in Africa to stop dying Coke would have to agree to transform.

Ultimately, Coca-Cola provided AIDS services for bottling affiliates’ employees throughout Africa with each stakeholder group – including the affiliates and employees – paying some costs.

The über-catalyst engagement leaders saw the value in engagement and came together long before others would.

For me, Nadine’s examples demonstrate the connectivity of the world in which we now operate and how engagement is not simply a fluffy concept but one that can do good both for businesses and the people they employ and serve. The alternatives are now open to rapid feedback via social media as we have seen in previous posts.  Nadine’s post reminds me of the interconnectedness of everything and I’m drawn back to the great sounds of Erasure with their song “It doesn’t have to be”, possibly the first time that Vince Clarke has been cited in an article on systemic thinking and cross-organisation development:

Nadine B. Hack is CEO of beCause Global Consulting and Executive-in-Residence Emerita at IMD Business School.   She has advised The Coca-Cola Company, Omnicom Group, Unilever and other Fortune 500 companies on rethinking stakeholder engagement.

Nadine Mandela

If your cause is important, you need to connect with the right people, be Cause ….

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About the Blogger:  Peter Cook leads The Academy of Rock – Keynote events with a difference and Human Dynamics – Business and organisation development, training and coaching.  Contact via peter@humdyn.co.uk