As entrepreneurs, directors, CEOs, and managers, we have an ingrained notion that cash is king and competition is the lifeblood of the free market.
I won’t argue those points, not one bit. Cash IS king, and competition IS the lifeblood of the free market.
But, competition is taken a bit too seriously by many of us in the business world. To the point of blindness, even. If you assume that competition is the only way to carry on business, then you’ll naturally be blind to some intriguing opportunities that may pop up.
In the late 1990’s and early 00’s, there was this really interesting, cool new corporate buzzword that was thrown around quite haphazardly, and often without even a true understanding of what it really was…
The Human Resources types and outside training consultants are still quite fond of it. Which is understandable, because the word fits very neatly into what they do. Synergy is essentially a symbiosis of sorts, but without the vital necessity and neediness that goes along with a true biological symbiosis.
Personally, I prefer the term ‘collaboration’ to describe this mindset that isn’t contradictory to competition, but meshes quite nicely with the principle in general. Sure, you can’t just wake up one morning and think Today, I’m going to call up my biggest competitor and offer them a favourable merger deal. That would be silly. Perhaps even insane, if not well thought out. But being open to professional collaboration with competitors and organizations in related industries can have surprisingly pleasant results. If we look at basic economic theory, we know that resources of time, money, and materials are finite (unless you’ve been living under a rock, or with Paris Hilton, you already instinctively knew this). Every organization (even the RIMs, Coca-Cola’s, and Microsoft’s) has a piece of the complete economic pie. To gain a bigger piece of the pie, someone else has to lose market share… or have some of their pie gobbled up. That’s where the nature of competition comes into play in the business world.
But, if an opportunity arises where two organizations can pool their resources and enhance their own product mixes and/or serve their customers better, why wouldn’t you as a manager pursue that opportunity? In fact, it would be a fiduciary irresponsibility of you not to- since enhanced product mix and customer service more often than not translates into a healthier bottom line.
Personally, I believe that the future of western business may just be in coming together instead of going twelve rounds in the ring with your competitors- especially in light of the insane (though perhaps unsustainable, but that’s a topic for another day) economic growth and enhanced global competitiveness from emerging economies in South East Asia.
2,500 years ago, the philosophic general Sun Tzu wrote that the greatest victories are those in which you turn an enemy into a friend without firing a single arrow. Sage advice. There’s a reason that his words are still floating around today.