CHAPTER 10 THE BENEFITS, AKA 1 + 1=5
Collaboration might pose challenges, but the pros heavily outweigh the cons. What we call the multiplier effect states that one and one used to make two, but now adds up to five, courtesy of several multipliers which have an immediate beneficial effect on said collaboration. All combined, these multipliers generate the power your business needs to survive this decade.
When we speak of partnerships, we’re not talking about the relationship you have with the local print shop. In the type of partnerships we speak of, there is a clear distinction between a supplier and a partner. One isn’t better than the other, either. They’re simply not the same thing. A supplier is somebody you hire to fix a singular problem. Your problem. Not his. This relationship is purely transactional: you exchange time and skill for money. You don’t need a common worldview or weekly sit-downs with each party you pay to solve a need your company is facing. You just want the plumbing not to leak.
True, some suppliers play an important role in the survival of your business, but the work they do doesn’t necessarily serve your purpose. In the first place, your suppliers care to earn a dime. Secondly, they do wish you well. But in a supplier relationship, each party’s main concern is itself. That’s ok, but it is not a satisfactory answer to the bigger question we are trying to answer.
The kind of partnerships we are on about are rooted in common ground. They are linked by a shared purpose. They understand that by joining forces, they create an opportunity that is beneficial to all parties. This type of relationship goes beyond the purely transactional; power is generated by it and new opportunities arise in its wake. In these partnerships, empathy is key. While you don’t really care what the wishes or concerns of your suppliers are, you have to align the wants and needs of all participants if you’re looking for an honest and deeply rooted partnership.
The opportunities that arise in the fertile space between partners is what we call the multiplier effect – a place where advantages grow exponentially, spawning ideas and solutions on various levels in your business and that of your partners.
The multiplicators
Purpose
Any business worth its salt today knows to look beyond pure profit making. Corporate Social Responsibility has gained popularity, shifting from niche to mainstream thinking. Sadly, though, while CSR managers are appointed all around, their role is often still a charade, a greenwashing gimmick, a marketing sweetener to please the more alert customers and shareholders. Nonetheless, the demand for responsible entrepreneurship is louder than ever and experience in terms of CSR is building.
In parallel, businesses are updating their mission statement and re-centering their key focus. While CEOs were once typecast as Wolf of Wall Street types, they turn out to be human after all. Companies are rediscovering their underlying mission, which is often a genuine attempt to make a positive impact on the world through the work they do. The fact that companies are now often asked to expand on their mission makes it easier for them to give more room to social responsibility, bringing the human factor back into the company.
Some businesses who feel responsible for their footprint or impact on society encourage staff to commute by bike or public transport and serve veggie food in the staff cafeteria. Nothing wrong with that! But while these measures do impact employees’ psychological well-being and sense of belonging, they do little in terms of pushing climate change back. Moving past that, you can aim to tackle real challenges like inclusion, mobility or global warming. But you’ll soon notice it’s almost impossible to make a significant positive impact all by yourself.
If you’re after true impact, you’ll need to collaborate with companies who share your ambition, translating it into a shared purpose. If several companies hook up to research and develop new ways of packaging or transport that is less polluting, their efforts will pay off exponentially. They might still be competitors in their core, but that doesn’t keep them from joining forces in reducing their ecological footprint. In the race towards a breathable, livable planet, none of us should be competing. We are all facing the same issues, and we will all benefit from the solutions we come up with.
Convenience
The new customer is high-maintenance. He knows it, too. And he doesn’t care. He just wants his needs met, and fast. That doesn’t make it easy for any one business to meet all the requirements and provide Mister New Customer with all the convenience he seeks. Say you know you can’t provide for every wish and whim by yourself, but care to be part of the solution and service your customer as best you can. Then you’ll be able to find solace in a variety of partners who complement each other. Because unburdening your customer becomes way easier when you have a whole team at the ready.
In come the partners. They don’t offer the same product or expertise you do, they don’t provide the same slice of the cake, but the sum of your added value, all the slices together, makes a mighty yummy cake for your customer. Bonus: your joint offer can match the high demand. And another one: the level of convenience rises with every slice you add, without clashing internally. So yes, your consumer can have the cake and eat it, too. And so can you.
Innovation
Collaboration also serves as a multiplier for innovation. New propositions can grow freely in the fertile space created between partners. Together, you can share risks and cover the cost of research and development. Together, you’ll harvest the new ideas, products or services that come from this cross-pollination.
Partners can inspire as well as challenge each other, while sharing insights taken from previous mistakes. If every company went through the same process in search of the big new idea, a lot of hours would be wasted on overlapping initiatives and the same mistakes being made several times over.
Also, every single idea would definitely be more average than if it had grown from the heads of more businesses. “A million people are smarter than one”, some song lyric chants. That’s why it’s a pity if every company does the thinking by itself. It’s a waste of resources and it affects the quality of those ideas. Because if you put great minds together, they think further.
Experience
Customers today are used to the most exhilarating, magical and innovative experiences. They don’t just go to a party, they go to Tomorrowland on a Tomorrowland flight, because it’s where the magic happens. They don’t just go out shopping, they wander around in tantalizing malls that ignite all their senses. Providing all that jazz if you’re just one company doesn’t just sound like mission impossible – it is! As we speak, customers are getting used to the spectacular. Expectations are high and collaboration is the way to keep up.
Data
Data is the new oil, they said. It will be fun, they said. Still, a lot of companies struggle to extract added value out of big data. To be fair, it’s not easy. You have to be able to first capture the relevant data and then select the material that might be of use. Being able also means having permission – because while it’s there for our protection, GDPR can also be used as a shield by the “data-haves” to exclude the “data-have-nots”.
That being said, seeing the greater trends is not something you do by collecting the obvious data points from your own customers; the kind of input you get directly from them when they interact with you. A wise man once said data without insights is just noise. Right he was. But to discover these valuable insights, you need a LOT of data, as well as ample space for unexpected results. Only when you mix and match different data sets from unexpected corners, will you stand a chance of stumbling upon that golden insight. All the data collected by each party will become much more valuable when combined, shared, and scanned for fruitful patterns. That, in turn, triggers innovations in value propositions, better servicing, and improved consumer journeys.
Sharing data can open up possibilities towards a more responsible relationship with the customer, too. Take Provenance, a young London-based company that uses blockchain and Internet of Things to help companies communicate the story behind their products. In short, they help companies offer total transparency. Buying a can of fish and Provenance software will tell you who pulled that particular fish out of the water and where, which market it was sold at, when it was canned and how long it’s been lying in the supermarket. Provenance’s clients are not flawless, but at least they are being honest about it.
INTERVIEW
STORM AND NORM BEFORE YOU PERFORM
AN INTERVIEW WITH ANN VAN DESSEL, SENIOR VICE PRESIDENT AND HEAD GLOBAL CLINICAL AND REGULATORY OPERATIONS AT JOHNSON & JOHNSON
IMI is short for Innovative Medicines Initiative, a European public-private partnership for health. Its aim is to speed up the development of better and safer medicine. In it, Ann Van Dessel represents American pharmaceutical giant Johnson & Johnson.
According to Ann, developing new medicine has always been about partnerships with doctors and hospitals. On top, health authorities are a key stakeholder in all health-related decisions. Over time, though, it has become more difficult, more risky and more time-consuming to find new active ingredients and to develop them to safe and effective medicine. “To manage this challenge, collaboration has become even more important. Today, we also team up with startups and scaleup. The world has become our lab.”
Ann states that partnerships, especially those with governments and NGOs, “have become essential to guide decisions in the area of global public health, amongst others in producing medicine for developing countries or for rare diseases.”
“The world is our lab.”
IMI was created to take the next step in partnerships. The goal? To reduce development costs and time-to-market for new drugs, with uniformized production and fully digitized test protocols. But there is more. Ann leads Project EU-Pearl (1), which aims to revolutionize the way clinical development is performed. The project team aims to create a framework to set up adaptive clinical trial platforms that allow multiple companies to test their medicine simultaneously and compare their test results to those of a shared placebo group.
In other words, pharmaceutical companies together with public partners are actually working together in this project, letting go of their natural impulse to compete. An exception? “No, ” Ann says, “this is happening more and more throughout the industry.”
“Honoring your commitments is essential to gain trust.”
Ann says that it takes time and specifically lots of non-functional time to build trust. “You see that some companies have a culture of collaboration and sharing, while others don’t.” In the end, Ann thinks: “Partnering is a people’s business. It begins with honoring your commitments, which is essential to gain trust. Next, understanding cultural differences is needed to form strong bonds. That’s why every one of our teams goes through ‘storming’ and ‘norming’ before performing.”
ANNE’S TIPS:
•Strong, informal contacts at the top-level help to set the agenda.
•A common vision on what we want to achieve is essential.
•It takes time, also non-functional time, to build an ecosystem.
•A clearly defined give and take is necessary, certainly in a public-private partnership.
THE 5 MULTIPLIER EFFECTS
The benefits of collaboration
We’ve listed the multipliers of collaboration, now let’s talk benefits. We believe collaboration isn’t just a dam to keep the water from flowing in. It’s a shiny castle on top of the dam, with a big waterslide to boot. Collaboration goes beyond facing challenges towards building futures. A lot of the challenges we face today are systemic and wicked. In a word, they are complex. When combined, all the effects of collaboration enable you to take on these challenges, to reduce and manage complexity. Maybe even thrive on it.
1. True impact
When companies join forces to achieve a higher purpose, true impact can be generated. In order to have effect you might need the proper scale and reach. If companies combine their efforts on purpose, one of the strongest multiplication effects kicks in.
2. Real unburdening
If you can service a customer from A to Z with partners, not letting go of their hand until the journey is successfully completed, they will become much more loyal than if you add only a tiny particle to their search for gratification. They will make a link between you and their positive experience, no matter if it isn’t your doing that theirs was a smooth process and your company didn’t come up with all the solutions involved to make the process this suave.
3. New propositions
When companies combine their services, they can formulate new propositions for their customers. These new propositions mean new income streams and a broader audience that feels spoken to. This means that an increase in scope, in reach and in income is within reach where collaboration is applied. But there are more perks. Take the example of the Loop. Loop is a global circular packaging platform designed to eliminate the idea of waste by transforming the products and packaging of everyday items from single-use to durable multi-use, feature-packed designs. By creating a new offer, consumer’s favorite brands are becoming waste-free.
The collaboration between competitors and several actors in a product’s life cycle combined with a lot of technology is what makes it possible for Loop to bring a compelling offer to their customers. Hence, a new proposition is born out of collaboration, transparency and new technology. And its impact isn’t purely financial, it’s environmental and social as well.
4. Seamless journey
A lot of work is often done behind the scenes and the companies operating there don’t get to enjoy all the upsides of a happy customer, nor can they control the overall quality of the consumer journey. But when the partnership they are part of is present from beginning to end, the guys in the back can rest assured that customers will be treated right until the very end. Another perk is you’ll have much more control over your clients’ experience if you are there, with them, all the way, providing a seamless journey. And that is only possible if you go to the market together and have a say in all the steps that are made after you leave the stage.
5. Shared insights
From all the joint data you and your partners bring to the table, unexpected new information and insights can pop up. That’s a clear upside. The fact that these insights are then shared with every party, is another one. Each of them can use this information to improve their services, develop new ones or maybe stop investing time and resources in a dead end. Shared insights make for shared improvement. You happy, partners happy, customer happy!
In short, collaboration is an open road ahead, leading to better overall problem solving. The new consumer can no longer be seduced by new needs, he just wants his problems fixed. Fast. And that is quite the challenge to take on by yourself. Collaborating doesn’t just make it possible to meet these demands, it tops them.
Apart from the five rational multiplicators, working together and partnering brings joy, bonding and inspiration. It’s fun to work together with like-minded people who strive for the same values and purpose.
Trust eats time for breakfast
Imagine you are engaged in a partnership with another company, but don’t really trust them. A lot of safety measures need to be taken before you are comfortable sharing information, explaining how your business works, allowing your staff to engage directly with the other party, or share a certain responsibility with them in servicing your clients. All of these may impact your reputation, so you tread carefully. Before making any move, both parties will be waving NDAs in each other’s faces.
They will bring in the legal department and have them build a firm wall around their company. They will set up a list of no-go zones and non-negotiables and try and foresee all possible risks. If this were a marriage, they’d likely be advised to abort the mission. Not only because it doesn’t really sound like it’s going to be a happy marriage, but because it is extremely time-consuming to be a fortune teller. (And because it usually ends in bad news.)
Like two peas in a pod
Now imagine a partnership that revolves around trust. In this scenario, partners are not opponents: the other party isn’t even sitting at the other side of the table. They sit together, think together, work together. They explore how they can move forward in a way that benefits both parties, looking for synergies. They both acknowledge they need each other.
What’s more, is they’re in it for the long haul. No serial monogamy, living apart together, shopping around or other exotic and loosely tied knots that have to be kept together with contracts and sticky tape.
This sounds more like a marriage that could actually work, right? One you wouldn’t try to save your best buddy from getting himself into. One might even look forward to this new match, seeing all the good things that could come from it. Not only for the parties directly involved but also for the wider ecosystem around them. Both parties put everything on the table: expectations, plans, visions. At the intersection of each party’s interests, ideas emerge, opportunities arise, enthusiasm is triggered. This common goal they have is big, but pooling their resources makes both of them stronger, eager to get started on that future.
Meanwhile, the legal department is out for a drink, for no one has called them in to put up any walls. There is no extensive risk mapping. No list of limits and risks. This means you don’t have to invest a lot of time prior to actually working together. This solves the paradox of companies who want to team up to keep in check with the market, but lose time due to the extensive prep work.
It’s safe to say you need trust when working together. Partnerships high in trust will save you time and increase your performance. Partnerships low in trust will only slow you down. In fact, we’re not sure a partnership without trust is even worthy of the name.
(1) The EU-PEARL project has received funding from the Innovative Medicines Initiative 2 Joint Undertaking under grant agreement No 853966. This Joint Undertaking receives support from the European Union’s Horizon 2020 research and innovation programme and EFPIA.