Collaboration or Competition: Which Has More Value?

Alliances can help drive and maintain innovation, and overcome any technological gaps or weaknesses that individual companies experience in-house. Collaboration of this type can help establish new products or services, penetrate new markets and give customers something better.

Another form of collaboration is portfolio building. Examples of this type of collaboration exist in pharmaceutical firms, who collaborate with smaller biotech enterprises to assimilate knowledge and patents. This has supported the growth of the co-creation view of collaboration, using input from outside a business to innovate and develop new products. Using the network is another way of collaborating to innovate. This applies especially to groups of firms that share research and development (R&D) goals. They create dense, interconnected network structures, while maintaining competition at low to medium, rather than cutthroat, levels.

Building and developing these mutually beneficial networks enables businesses to contribute to the innovation process, with each member managing their own position. The emphasis is on collective wellbeing of the collaborators involved, and securing their long-term survival.

These ecosystems are self-adjusting and relatively self-contained. They have various shared arrangements and integrated resources, and they create mutual value by exchanging services. In a collaborative ecosystem, there will be certain norms and rules, which help to influence relationships within it. The collaborators involved will, themselves, determine the value in the ecosystem, and innovation becomes something they are jointly involved in.

In the ecosystem, there is no formal authority, but there is a strong sense of dependency among the members, along with a common set of goals and objectives. To work towards these goals and objectives, the ecosystem has a shared set of complementary knowledge and skills. You can see ecosystems at work in developing large-scale projects such as transportation systems and utilities.

But the principle should be adaptable to collaborative groups of different sizes, with different aims and objectives.

How do you develop some sense of control when events seem uncontrollable?

Where chaos exists, there are random interactions between different bodies in a given context. But order arises out of this chaos when a novel, complex system forms out of this.

The concept of emergence is about collective behaviours existing or forming, so that a system can do things that its different parts cannot do alone.

In nature, these kinds of relationships evolve, but what’s to stop us from engineering them in our business and culture?

Lockdown and recession are leaving behind lots of economic wreckage, and, individually, many businesses are hanging on precariously. But what if the one thing the pandemic and its aftershocks can do is help us redefine our relationships with each other, so that out of this new, resilient forms of collaboration emerge?

To build value, we need to collaborate, because otherwise, currently, we could be all chasing after shrinking or stagnant markets.

Originally, we would have competed for limited resources, such as food, water, shelter or partners to mate with. The modern trait of competitiveness is not about survival as such. It is much more of a psychological trait. And it drives the need to succeed and be profitable.

But while competitiveness has its place, as an alternative, collaboration offers opportunities for progression and innovation. Your business might grow faster by being fiercely competitive, but through collaboration, you could make more profound, lasting improvements to it. And at a time when so many businesses are facing challenges not just to grow but to their survival, collaboration might be the best means of maintaining a sense of equilibrium.

While virtually all organisms compete with members of their own species, for individuals, the degree of competitiveness can vary significantly. And competitiveness can fluctuate over time. In its evolution, it favours diversification.

In nature, however, when some organisms develop their features to become more competitive in certain ways, this ultimately holds back their capability to maximise their overall resources. They end up specialising, and spending most of their time and energy seeking higher quality resources. But if there is too much of this, it becomes like an arms race, until the cost of competitiveness becomes too high.

In organisations and enterprises, where colleagues compete against each other for promotions, positions or sales, this too can be a drain on time and resources, which would be better spent dealing with external challenges.

And the same can apply to how different businesses compete with each other. Collaboration might not offer the same immediate rewards as competition, but it can offer other, longer-term benefits.

There are various key ways in which businesses can collaborate with each other. They can create strategic alliances, to temporary combine resources to achieve strategic goals.