Competition or Co-opetition?

As big as your dreams are and as smart as you
might think you are, you can’t do it alone.
It never ceases to amaze me in the world of Coaching and NLP how aggressive some individuals can get about competing with each other when business is challenging. Providers revert to a 1980’s style of price competition – undercutting each other’s prices, associate coaches offering cheaper deals to customers of who is often their own main customer, often a generalist ‘ego led’ service proclaiming they can do anything and these and similar strategies are unsustainable. We even have examples of some players in the NLP field publicly questioning the quality and qualifications of their competitors in a naïve attempt to rid the market of a number of players. How does this behaviour underpin ‘the map is not the territory’ and other presuppositions?
The problem is at an ‘identity level’. The ‘me, me, me’ mentality that has evolved and causes a paralysis in our own development. It is impossible for a human being to exist in isolation as we are connected beings. These naïve, often unprofessional and unethical behaviours do not serve the personal development industry well. One of my early retail mentors; Peter Harrison, used to say; ‘find your niche, determine your standards and hold strong when times get hard’. At that time we watched other retailers discounting products, running half price and blue cross days and adopting a bargain basement mentality and guess what – they went out of business or were taken over. We won through and our managers became highly sought after within the industry.
Co-opetition is a business strategy that uses insights gained from game theory to understand when it is better for competitors to work together. It is a combination of the words cooperation and competition. The principles and practices of coopetition are credited to Harvard and Yale business professors, Adam M. Brandenburger and Barry J. Nalebuff. Competitive businesses that also cooperate when it is to their advantage are said to be in coopetition and the result is an ethical, collaborative partnership that delivers benefits to all concerned.
Several years ago when working with Nationwide Building Society we were delighted to be invited to a suppliers’ event where the customer got competing businesses in the room and encouraged us to work together to design and deliver the very best service we could, in partnership with the customer. A win:win for all and it was so much fun as well as providing realtime learning.
There is nothing new about Coopetition. Bengtsson and Kock (2000) postulated that relationships among competitors focuses either on competitive or on cooperative relationships between them, and the one relationship is argued to harm or threaten the other. Their research considered that two firms can be involved in and benefit from both cooperation and competition simultaneously, and hence that both types of relationships need to be emphasized at the same time. They argued that the most complex, but also the most advantageous relationship between competitors, is “coopetition” where two competitors both compete and cooperate with each other. Complexity is due to the fundamentally different and contradictory logics of interaction that competition and cooperation are built on. It is of crucial importance to separate the two different parts of the relationship to manage the complexity and thereby make it possible to benefit from such a relationship. E.g. two competing companies could collaborate to design and deliver the same course or qualification and agree to market it to different niche sectors, this reducing their own production costs and benefiting from each other’ expertise. E.g. one partner delivers a coaching programme with the corporate world which is his/her area of expertise and where s/he has credibility, the other partner may deliver the same programme albeit with more pertinent case studies in the health or sports arena. The benefits are shared learning whilst each partner plays to his/her strengths and works where s/he is most credible.
Research from Bengtsson and Kock (2000) used an explorative case study of two Swedish and one Finnish industries where coopetition is to be found, to develop propositions about how the competitive and cooperative part of the relationship could be divided and managed. It was shown that the two parts can be separated depending on the activities degree of proximity to the customer and on the competitors’ access to specific resources. It was also shown that individuals within the firm only can act in accordance with one of the two logics of interaction at a time and hence that either the two parts have to be divided between individuals within the company, or that one part needs to be controlled and regulated by an intermediate actor such as a collective association e.g. the initial developer of the product or a professional association.
Hendy (2014) shares that businesses of all shapes and sizes are forming co-working arrangements, enabling them to become stronger competitors in the process. This new perspective on business collaboration requires both parties to create a working arrangement that enables them to capitalise on the arrangement. Unlike traditional collaborations in which businesses may come together to offer a joint promotion, co-opetition is a
Co-opetition is thriving among Australian start-ups, according to Sydney technology entrepreneur Mick Liubinskas. He’s seen lots of examples of co-opetition among education and technology companies, where many players regularly share ideas and tools. “The co-working spaces, accelerators and investors that predominantly work together to support co-founders are the ones that build successful businesses,” Liubinskas says. “Most people are a part of three, or four, groups and everyone shares information and connects.”
Adventure Capital founder and managing partner Stuart Richardson says that co-opetition is a critical business skill.
“Start-ups need to find mechanisms to scale efficiently, or face a painful death of 1000 cuts. Partnering, and forming an effective ecosystem that extends your influence and enhances your access to market is a sustainable means to achieve this.”
The founder of custom jewellery website StyleRocks has also benefited from a co-opetition arrangement. Pascale Helyar-Moray forged a relationship with chocolate retailer Lollypotz, which gave away StyleRocks gift certificates. The arrangement works well for StyleRocks as a cost-effective customer acquisition mechanism and also a source of revenue, Helyar-Moray says.
“What we find is that gift certificates help customers make their first online purchase with StyleRocks jewellery. It also gives Lollypotz something innovative to offer their customers – the idea that customers have their chocolate now, and jewellery later.”
Harvard Business Review blogger Marquis Cabrera wrote recently that sharing information is a good way to build trust with your competitors in the lead-up to a co-opetition arrangement. These partnerships have also worked well for businesses that create new technologies given the high costs associated with research and development, she says.
Cabrera suggests choosing partnerships where each person brings something different to the table. “In many circumstances, forming co-opetitions is better than traditional collaborations because they create transparency about motivations, agendas and goals.”
However, it’s important to understand how to protect your own interest whilst co-operating with competitors to maximise value.
Richardson says the business relationship should be formed around a clearly articulated set of principles, which are used to ground the progress, success or need to discontinue any arrangement. “Like any relationship, it takes time and energy to develop and grow the best partnerships. And despite best intentions, sometimes they can end in tears,” This is usually when one partner doesn’t stick to agreements and has differing values which cause them to try and benefit from the relationship whilst still ‘doing their own thing’.
Like any great relationship the underpinning behaviours stem from ethics, authenticity, communication and shared values. Are these not the very cornerstones of the NLP and Coaching industries?