Entrepreneurs Collaborate

Collaboration is nothing new. We’ve been collaborating ever since Homo sapiens set foot on the planet – through families, tribes, sport and business and we’ve reaped all the accompanying benefits.

Advances in technology, especially the Internet, have made collaborative efforts easier than ever. It’s a new world of global engagement in which teams come together in various combinations as the need requires. A quote from the IFIP (International Federation for Information Processing) conference of 1998 sums it up:  ‘In the 21st century, competition will be between networks of collaborating enterprises (value chains) rather than individual enterprises.’

As the rate of change accelerates through an increasing variety of sources, so our business models must change to maintain a competitive edge.

The Economist Intelligence Unit found that more than 50% of executives believe collaborative partnerships will form either an important part of their firm’s competitive advantage or will be key to its survival over the next three years. 

Why collaborate?

Research reveals that companies collaborate for the following reasons:

  • To increase market share through relationships that lower prices, increase product quality and service, reduce marketing time and enhance customer service through faster delivery times.
  • To increase company income through relationships that reduce cost, increase asset utilisation, share investment cost, reduce inventory, share business risk, eliminate duplication, waste and achieve economies of scale.
  • To increase flexibilities and capabilities through relationships that improve skills and knowledge, enable easier product development, allow access to new technologies, reduce marketing time and simplify production processes.

The four stages of collaboration

  1. Individual to individual – starts with your vision; as conversations between two people from different organisations about shared goals.
  2. Individual to organisation – obtaining clear authority from respective organisations to pursue joint projects and begin formal planning.
  3. Organisation to organisation – developing formal ways to interact, such as joint systems and policies to support new programmes.
  4. Collaboration to community – developing community support to influence systems that affect all players.

For more on the proposed methodology for collaboration, visit www.smecollaborate.com.

In this week’s #buildSA chat on Thursday at 20h00, we’ll discuss collaboration for entrepreneurs and we’d like to hear from you regarding the following:

Q.1 Do you think collaboration between businesses is beneficial?

Q.2 How do you know if your business is suited to collaboration?

Q.3 In what ways can entrepreneurs mutually collaborate? (For example, networking, co-operation, partnerships, outsourcing, joint ventures, mergers etc.)

Q.4 Before pursuing closer links with other entrepreneurs or businesses, what do you think are the key things to consider?

Q.5 What are some of the potential pitfalls in collaborating?                                                                                                    

Q.6 What can you suggest to overcome these?

SUMMARY:

WHAT? Collaboration can  be defined as a partnership between teams or individuals to achieve pre-determined, agreed-upon goals. Sustainable collaboration starts with a collective and powerful vision! It’s the act of working together with someone to produce or create something. It is vital, however, to first clearly define your objectives  and purpose.

WHY? Collaboration  increases strengths, shades weaknesses, increases opportunities and enables those involved to share risks. It provides better results and outcomes because entrepreneurs are combining their skills and resources to better their businesses. @TheNextPageSA painted the picture of construction workers collaborating and how they can produce a strong, sturdy beautiful structure. Entrepreneurs can do the same if they work together.

Q.1 Do you think collaboration between businesses is beneficial?
It can be beneficial because it enables collective innovation  and opens doors to new opportunities and networking. You can access skills/strengths you may not possess within your own business.

Q.2 How do you know if your business is suited to collaboration?
Every business is suited to collaborate given the right opportunity. However it’s critical to be highly selective about who you join forces with. Collaborate with a business that shares your vision. One with whom you can share values, besides goals. Not all collaborations are successful, which is why it’s important to seek common ground and values.

Q.3 In what ways can entrepreneurs mutually collaborate? (For example, networking, co-operation, partnerships, outsourcing, joint ventures, mergers etc.)
There are many ways to mutually collaborate. Networking is largely what happens on Twitter and is a form of collaboration whereby parties informal interactions take place with mutual support being offered in various forms but often without common goals.
Cooperation: this is where interaction takes the form of semi-formal communications, sharing information but without any defined mission.

Outsourcing: Contractual relationships in which one organization agrees to have another carry out specified functions.

Joint venture: A contractual relationship to address a mutually-shared goal.  It requires extensive planning, sustained communication and designated resources provided by each organization. Each organization remains independent.

Merger: One organization takes over another and  its resources, replacing other’s administrative structure and reorganizing staff and resources.

Q.4 Before pursuing closer links with other entrepreneurs or businesses, what do you think are the key things to consider?
It’s important to find the right partners who share the same values as you. Establish a win-win situation for both businesses. Planning is as important as good communication and active listening.  Each party should know what is expected of them and success must be a team  effort. Mutual respect is vital before collaborating.

Questions to ask might include:

What specific goals do we want to address together?

How should we structure the relationship?

Who will do what, when, with what resources and limits?

How should we allocate expenses, income, deal with losses?

How should we deal with unexpected  problems, boundaries and an exit strategy?

How do we verify that the other can deliver on promises?

Q.5 What are some of the potential pitfalls in collaborating?          
Owning someone else’s vision is a taxing pitfall for collaboration. Conflict typically arises during collaboration and this can be a major pitfall. Remember your vision firstly and don’t be overshadowed by your partner’s vision. Don’t let excitement compromise your vision.  Not planning properly and outlining lines of authority, accountability and division of labour could be a pitfall. Differing approaches to conflict resolution (values) can prove challenging too. Not having mutual criteria for assessing progress towards goals is another potential obstacle to success.

Q.6 What can you suggest to overcome these?
Outline a problem-solving method and lines of accountability beforehand. Write down everything!  There should also be specific methods for reporting and managing the communication progress. Reward and celebrate successes together.  Less talk and more action will alleviate pitfalls.  Use tact but always be honest.

Collaboration happens when you decide together, agree, do and achieve. Collaboration indeed is an essential skill for competing in the 21st Century. 

Creative Commons Licence
Collaboration - an essential skill for competing in the 21st century by Jacqui Mackway-Wilson for The Big Break Legacy is licensed under a Creative Commons Attribution-ShareAlike 2.5 South Africa License.