Why Collaboration is a Critical Skill for Every Business Owner
We’ve entered the age of collaboration. Despite current events, like BREXIT, that showcase the opposite, collaboration remains an important tool for business success. Getting it right is critical. Effective collaboration can accelerate your business growth and building an Asset of Value. On The Money Show with Bruce Whitfield, Pavlo Phitidis set down a plan for business owners to develop effective collaboration skills and strategies
The most successful businesses I work with specialising and excelling in a niche. We identify what is core and strategic and everything else is outsourced. In new industry value chains, outsourced means collaboration if your supply and demand dependent on partners.
Assessing a collaborative opportunity
Six considerations when building a collaboration framework include:
- Your business strategy: Be very clear on your business strategy, your customers’ needs, and what you want your strategic competence as a business to be.
- The value chain: Assess the entire value chain for your customers. It’s impossible to fulfil every role in that value chain through your own business. For example, a mattress manufacturer does not run its own advertising agency for marketing its services, nor does it house a dedicated textile factory to produce fabric. Knowing your business’ role in that value chain, and working with others that fulfil different, but complementary, roles is important.
- Competition: Complementary roles are
essential,because competing with your collaborator will kill the collaboration and you will be robbed of your Intellectual Property and team.
- Matching values: Find a collaborator whose values and operational approach matches that of your business. Thoroughly research your potential collaborator, to better understand how they work at every level.
- Distribution and growth: Understand how this collaboration will grow or limit your business. SnapScan provides a superb example of this: by partnering with just one bank, the mobile payment platform limited its market share potential, which was quickly snapped up by
- Finance: Be very clear on how
moneywill flow into your collaboration, and how it will be distributed to each side.
Designing a successful collaboration
Design and implement a successful collaboration by:
- Identifying the
end point: Define the objectives you aim to achieve through this collaboration.
- Identifying the levers of success and failure: Define your roles, responsibilities, and expectations of each other.
- Starting small: Find the smallest, low-risk project you can work on together, and use it as a test for your larger collaborative project. Build on that, and scale slowly, taking on more risk as you build. This will help you learn more about how your collaborator
works,because truthis found in action.
- Assigning a budget: Know and understand the budget and financial flows that go into your potential collaboration, before you begin working together.
- Creating a watertight agreement: This eliminates miscommunication and
makethings very clear to everyone involved. This must include:
- Clear definitions of each party’s roles and responsibilities, including an icing clause, that prevents either of you from entering into overlapping or competitive activities.
- A full financial breakdown, including all expected income, expenditure, payment, and delivery dates.
- A termination clause, that outlines how to end the collaboration when either of you
needto, or the project reaches the end of its cycle.
Spotting potential problems in your collaboration
Do not feel pressured to begin work before the agreement is signed. A true collaborator will insist upon a signed agreement before committing resources and time to a project. Make sure you have thoroughly researched your collaborator, and thereby protect your intellectual property, customers, and operational strategies. Don’t get sucked in by big promises or idealistic objectives. If you’re concerned about your objectivity in assessing a potential collaboration, ask for advice from someone who is experienced in the industry, sector, or type of collaboration you’re pursuing.
Getting into an agreement is easy. Getting out, when it’s not working burns brand, reputation and opportunities.