When times get tough, enterprising small business owners rethink their strategies and MOs in order to survive and thrive. Apparently, the old adage: "there's strength in numbers" has taken on a whole new meaning these days. A recent LA Times article points to exciting possibilities if business owners–even competitors--are willing to break down barriers and share their strengths and competencies.
The article, For three fragrance firms, joining forces sometimes makes scents, offers valuable insights for all of us in business. It points out that in times like these, collaboration makes great sense, saves money and taps into valuable expertise small businesses don't have access to otherwise.
The story: Business owner Neal Harris wanted to create a new fragrance because he saw an opportunity for more work. He developed the fragrance by working with a competing firm that provided the raw materials at reasonable cost, and a third firm that assisted with packaging the fragrance. Harris: "Together we are accomplishing more than we could have ever imagined."
Small business expert James Blasingame gets the credit for coining the word "co-opetition" for this emerging trend. "It's a highly intelligent survival strategy, and they wind up helping each other get more business. They're also providing customers with a better product than they could provide as individual companies," states Blasingame in the article.
What's great about it:
These alliances are less formal than working under contract.
Each participant's business saves money on hiring additional personnel, and outside resources for competencies it doesn't have.
Each participating company can help land more business for all concerned.
Added "brain power" and insights.
A chance to build solid, trusting relationships that enhance each business's opportunities for future success.
I've recently blogged about the outreach large consumer product companies are making these days, launching new web sites and soliciting ideas for new innovative products from entrepreneurs.
Since so much of the business landscape is populated with small, entrepreneurial businesses more than large corporate concerns, this is an idea that I think really merits consideration by companies all across the country.
The article points out that in order for this to work, one person has to be "nominated" as the point person for collaborative projects. Trust is paramount. Egos have to be checked at the door. Give and take of ideas and openness are essential ingredients for co-opetition to be effective. But think about the potential upside.
Are you in a business, or do you know of a business that has collaborated with other companies in this manner? If so, was it successful or did it fail? Why?
Do you see potential for your company if management would consider joining forces with competitors or other businesses?
Do you think a loose collaboration rather than a formal working agreement could potentially lead to problems, or do you think avoiding legal terms might be more advantageous in the long run?
I'd love to hear from you.
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