While changing company culture, perception of the crisis and individual traits may take longer to change, an understanding of why we need to collaborate, and where and when collaboration is required, can be easily achieved, and can help a great deal in better collaborations.
This article provides an overview of the six broad areas or scenarios where we need to collaborate, and which provide the rationale for collaboration:
1. Sharing of knowledge: Collaboration is required whenever you need to share knowledge and competencies across the portfolio. This may involve sharing of best practices, sharing expertise in functional areas, or pooling knowledge to better address business challenges. Actual know-how is rarely documented - books and manuals usually deal with principles of conducting business processes, and even detailed case studies are no substitute for sharing hands-on knowledge during live business processes.
2. Sharing of tangible resources: Optimization of businesses, leveraging the benefits of scale and eliminating duplicated effort are areas where the sharing of physical assets and resources within an organization may be required - and this cannot be done without collaboration. This is also one of the biggest rationales of mergers and acquisitions.
3. Pooling of negotiating power: Businesses hinge on pricing strategies and negotiating power. The benefits and economics of purchasing scale, joint negotiation etcetera are what makes businesses viable. Common purchasing of inputs across several businesses or departments requires active collaboration.
4. Coordinating business strategies: Collaboration is required in another important area that provides rationale to mergers and acquisitions. This is about the benefits of aligning the business strategies of two or more businesses, by reducing competition or making coordinated reactions to common competitors. This is an area where within the same organization things are easier, but between independent organizations the line between collusion and collaboration is thin and has to be treaded carefully.
5. Coordinating the flow of products or services: Collaboration is required wherever there is need for vertical integration or need to coordinate the flow of services or products. Derived benefits range from lowering of inventory costs to enhancing capacity, shared product development, better capacity utilization, and better market access.
6. Collaboration for creating new businesses: Collaboration is required at the time of forming new businesses when know-how from different units needs to be combined for common goals. Internal or external joint ventures or alliances exemplify this type of collaboration.
Teamwork and collaboration can often be difficult if the rationale and needs to collaborate are not clear in the minds of collaborators. But keeping these six areas of collaboration in mind helps to define further details and collaborate more effectively.
