How to Build a Collaborative Business

 In Collaboration, Creating Shared Value

With the global population growing by 5 billion over the past 100 years and the resulting strains on our natural resources, you’d be brave to argue against the assertion that companies must work more collaboratively. The trend is inevitable. International management expert, Gary Hamel, said as much in What Matters Now:

In tomorrow’s world, collaborative systems will outperform those characterised by adversarial win-lose relationships

Regardless of the sector you work in, it raises a career defining question: Do you and your people know how to build a collaborative business?

As it happens, most executives and leaders don’t, which is why the DDI Global Leadership Forecast 2018 found that having the ability to collaborate across organisational boundaries is a premium leadership capability.

The stakes are high as traditional markets and customer value propositions evolve. For example, how do insurers respond to the shift from cover-all home insurance policies to the needs of Milllennial’s who only want to insure a few specific items? How do companies address the wellbeing and productivity challenges presented by mental health? How do all sectors work together to create a stronger socio-economic backdrop that benefits all?

What is a Collaborative Business?

I’ve noticed that a lot of the ‘collaboration’ conversation is around technology and tools that help your people work together more effectively. It’s a really important topic, however it is a sideshow compared to the higher order challenge of building a collaborative business from the top down, one that seamlessly identifies, develops and implements highly innovative, collaborative business models.

The Fortune 2017 Change the World List shone the light on businesses heading in this direction. For example, JPMorgan Chase claimed top spot for its substantial community investments and new partnerships in Detroit, on the basis that healthier cities fuel healthier business performance. It’s a model, once refined, they intend to roll out many times over.

Your business has to be crystal clear about its mission and purpose; steer clear of pithy statements and lock onto the genuine needs of your customers and communities. And once that part is clear, you’ll need to explore new ways of working with partners you’ve seldom worked with before. Sound easy or hard?

I’ve been helping organisations address these challenges since leaving my corporate career in 2007, and I’ll admit it is only recently that the underlying recipe for success became abundantly clear.

This article gives you an overview of the seven things you need to get really good at in order to build a collaborative business, and it will be followed up by further articles examining each of these things in turn.

1. Mindset

Do you have the right mindset to capitalise on the opportunity?

This is your ticket to play.

If you think your company or organisation can do its own merry thing and not be too concerned about what’s going on around it, you’re not really at the starting line. Out of the nine key mindset requirements I’ve identified, interdependence is the big one. It’s an acknowledgement that success is linked, that win-lose relationships don’t stand the test of time. (BTW, here’s a good example of it going all wrong!)

It’s also about getting out there and being proactive, taking calculated risks and inserting yourself into explorative situations with your fellow collaborators. You’ll be challenged to think differently about relationship building, timeframes and success measures, just to name a few.

2. Strategic Context

As with any strategic move or re-positioning, you’ll need to look at the bigger picture trends shaping your direction: there are infinite possibilities when you start exploring collaborative business models. On one hand that’s exciting, on the other, it’s bewildering.

Your challenge will be to interpret what those key trends mean for the collaborative aspects of your business. For example, if you’re in a highly competitive industry where competitors rarely work together, maybe it’s time to start looking into collaborative opportunities that lie in non-competitive areas such as assisting broader supply chain development.

3. Purpose

Do you have clarity of your mission and purpose? If your idea of purpose is along the lines of being “the world’s premier petroleum and petrochemical company“, think again as this is code for “shareholder returns are all we care about“!

I’m not saying companies should not aim for shareholder returns, I’m saying that the world is a more sophisticated place and having a clear purpose aligned with what people really need is fast becoming an essential platform for earnings growth and outperformance. In our less-constrained past it wasn’t such a big deal.

What you’ll find is that clarity of purpose gives you licence to explore adjacent products and markets. Freedom and satisfaction in the one hit.

4. Governance

Do you have the right internal structures in place to support new or modified ways of doing business? For example, CEOs and Boards will need high level controls – especially for risk management – and plans for embedding a culture of collaboration, starting with the senior leadership team. As we know, governance is never a sexy topic … until something falters or goes wrong!

5. Process

How do you identify, develop and implement collaborative business opportunities? You’ll need excellent innovation-based skills and processes to come up with good ideas. Your goal is to develop a process that supports the systemic production of great ideas and moves you away from ad hoc and occasional victories.

Plus, because you’ll be dealing with partners from different industries and sectors, you’ll need to be able to converse in a common language that is understood by all. There are new tools and techniques that can help you do this.

Once you’ve developed your idea to the business case stage, how do you ensure implementation success? I’ve found that most organisations need help in maximising their return on ideation, development and implementation, or return-on-collaboration for short!

6. Capability Building

What is your plan or pathway for building the capability of your people? Shifting away from traditional ways of operating towards a culture that supports collaborative business won’t happen overnight. An address from the CEO may open up minds to a new direction but it won’t cement the skills or support needed in bringing it to reality.

The companies that do this well are constantly re-examining their messaging, forms of communication and learning agendas to build their capability. At certain times you may need to invest in building capability outside of your organisation if it’s seen as a key risk for your projects and initiatives.

7. Learning

Once you start implementing collaborative business models, how do you learn and improve? A set-and-forget approach is a wasted opportunity, because you will need to learn and learn and learn… creating a never-ending learning cycle.

Collaborative processes, by their nature, will go off-track. They will sometimes go wrong. The question is: how do you review and learn from those instances so you can refine your approach? And how do you integrate that learning across your organisation?

Building a Collaborative Business

Overall there are many challenges – I’ve raised more questions than answers here to provide a realistic view of all the things you need to get right to get good at collaborative ways of working. It’s a good investment to make as the rewards are very high and the risks associated with not acting are higher!

So, which of these seven areas do you need to focus on today to build or improve your collaborative business?

Phil Preston supports executives and leaders across all sectors in their collaborative challenges. You can make contact with him or visit his website.

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