Let’s say you’re a bank, and you have lots of competitors. How could you even think of teaming up with one of them? It’s unthinkable, right? And maybe it is; maybe the bank’s Directors would never consider the concept, but the history of co-opetition (teaming up with rivals) is rich.
– In 2004, Samsung Electronics and Sony formed an agreement to share research and development costs in designing flat-screen LED televisions.
– In 2007, Amazon (Kindle) and Apple (iPad) established an agreement to allow the distribution of Amazon e-books through an iPad – Kindle App, allowing one party to gain a wider market while the other became a more comprehensive content provider.
– In 2011, Ford and Toyota teamed up to develop a new hybrid powertrain for light trucks and SUVs, enabling drivers who want the capabilities of a larger vehicle to get the gas mileage of a smaller car.
– In 2012, Harvard University and MIT formed edX, offering free online courses to students around the world—each committing $30 million to the effort.
– In 2020, Apple and Google partnered on COVID-19 contact tracing technology.
– In 2021, just recently, Merck agreed to produce vaccines for Johnson & Johnson (granted, the Biden Administration helped a little).
It happens. It CAN happen.
Here are 7 important questions to consider:
1. What is it that you’d really like to improve in your business, and what rival has the resources necessary (that your organization lacks) to get it done?
2. Will cooperation forfeit your competitive advantage?
3. What is likely to happen if you don’t cooperate?
4. How would you structure the agreement?
5. Who would you contact (in your rival’s walls) who has the authority and creativity to consider the concept?
6. What leaders do you need to get on board with the idea (internally) before introducing it to the rest of the team?
7. What team members do you need to recruit who are open-minded enough to get energized about the partnership?
If nothing else, asking these questions about your rivals is a good exercise.
Faller Financial partners with competitors all the time—brokers and more. We recognize our growth objectives are achievable when we have the option to team up with our rivals, and I can attest: it works!
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Sources: npr.org, thestakeholderagency.co.nz, hbr.org, forbes.com, money.cnn.com, apnews.com