Market Economy is all about Collaboration
New York, NY. There is a great misconception about market economy; it is not all about competition. In fact, competition is but fraction of what is really going on. We need to rebalance our view of the economy, to understand better our societies, to collaborate better and also to fight populism, often grounded on simplistic views about how economy functions.
Yes, there is competition and its is vitally important, but it is only the ’driving edge’ where the big blunt force behind that edge is collaboration. Quite amazingly, for many products and services literally hundreds of individuals and organizations work together, often not even knowing each other. We spend much of our time collaborating with our clients, end-users, suppliers, channels, service providers and other partners.
Collaboration is the big force making things happen in everyday economy.
I do not want to downplay the importance of rivalry. Keen edge of competition is needed to keep us all sharp and also to show the direction of movement. But even in innovation work, looking for next big thing, often considered arena of fierce rivalries, the mundane reality is much about co-work and exchange of ideas (see e.g. Steven Johnson’s ’Where Good Ideas Come From’).
World is becoming more connected and more transparent, both conductive to collaboration. On demand side, the dynamics, the sheer pace of developments is growing to new heights, pushing us to do more, faster. There are also alarming news about the productivity of research decreasing fast (see Bloom et al.: Are Ideas Getting Harder to Find? Sep 2017). Collaboration is way to pool resources, get faster feedback and improve development efforts.
Another important aspect is the voluntary nature of the cooperation. Not directed from above the actors choose freely whether to collaborate based on alignment of different interests and, very importantly, things like personal chemistry and compatible values!
Therefore, market economy relies also on sharing values and creating social capital; right connections and trust. Social capital is especially important where anything radically new is created. When the collaborators do not know what the end results are, its difficult to devise written contracts capturing all possibilities. Rather, innovation collaboration must be based on fair amount of mutual trust.
Hence I suggest a new agenda: we need to sort out our attitudes about the economy, innovation and collaboration. Moreover, we need to emphasize collaboration more throughout education system. Goal should be to move from learning things (data) through analyzing and synthesizing to creating actionable understanding, which most often require help of others both in conceptualizing the action paths and then acting on them.
...future winners are those who know how to collaborate
Consider strategy work: Instead of emphasizing analysis of our own and competitors’ strategies, we need to create understanding of how our own and our potential partners’ strategies fit together. This actionable alignment requires openness, understanding other's business (empathy), and that we have done our own strategic homework.
Back to the balancing act, should we forget competition? No, and there is a connection: future winners are those who know how to collaborate, especially to those who can work effectively with different players across the borders between organizations, sectors, cultures and countries.
Get out of your box, collaborate and prosper!
CEO and Founder
Acknowledgements: First big thanks to our great New York partners, especially to Chris Clott; its been wonderful to collaborate with you all. Second source of inspiration was the recent article ’Life’s economy is primarily based on collaborative rather than competitive advantage’ by Daniel Christian Wahl. Also thanks to Marko Koski, who challenged me to coach group of energy startups on strategy, as last thing on Friday afternoon after two weeks of intensive boot camp @ EnergySpin Accelerator.