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It's been nearly 20 years since "co-opetition" was first introduced into our business lexicon. As many of us know, the term, in its most basic form, means to partner with organizations often considered as competitors, to expand a product or service's overall customer and corporate value. Since it's introduction many leaders have sought such a partnership to create complementary offerings – the issue of course is seeking out the right one and making it work for your business.
When they do work, these partnerships bring tremendous mutual benefits. For instance, Intuit just announced its partnership with Square – a popular electronic register and payment service. We compete on various levels, but when integrated into Intuit's QuickBooks Online, we knew our customers, and Square's, would benefit: Intuit brings financial management to the table, while Square enables customers to simplify their business operations and transactions. In our opinion it's win-win-win for our customers, ourselves and Square.
Through this alliance and others, I've learned a great deal from co-opetition over the years. Here are five lessons I'd like to share:
1. Please your customers
Whatever product or service you offer, your customers can believe you value your bottom line above their satisfaction. Of course, you realize that the two are inextricably linked and teaming up with a competitor is a good way to prove this to a wide audience. When you launch the new offering, ensure it's perfectly integrated with your products to create a seamless experience for your customers. Ultimately, they'll realize you're dedicated to providing them the best possible product, and are committed to doing right by them.
2. Improve your reputation
Following from the first point, in a world where corporate transparency and authenticity are under constant scrutiny, and where customer word of mouth can make or break a brand, proving to customers you're willing to partner with other leaders in your industry can pay dividends. Through an alliance, they will experience the ecosystem you're creating, will understand you're invested in them, and in turn will share that love with others through word of mouth and social media.
3. Offer more value through trusted partnerships
You know your business inside and out, you play to your strengths, and you constantly refine your offering, but a hard lesson to learn is that you can't do it all, nor should you. Joining forces with a competitor that complements your business, instantly gives you access to resources you don't have. To make this partnership truly work, be transparent, both from a business and resource perspective. Success hinges on a trusted and open alliance. Plus, with an ever-changing marketplace, new competitors can emerge overnight, so by openly and strategically allying with a competitor, businesses can provide immediate and improved value to customers, while at the same time hedging off future threats.
4. Raise awareness and engage
Further to the third lesson, co-opetition exposes your company to new customers. Indeed, this is an unprecedented opportunity to speak with a captive audience who may only have a limited understanding of your business offering, but who now has a stake in your game. Take this time to form a strategic marketing plan to effectively communicate with these potential new customers, and leverage PR and social media content to share your news and engage with them. This will help you measure customer sentiment and direct improvements to your partnership in the long term.
5. Short-term and long-term value
Any business – no matter their industry – must always think about how it can deliver its products, services and marketing in fresh and new ways. Over time, each of these can stagnate; and while not a panacea for a total refresh, in the short-term, a well-timed co-opetition partnership can inject fresh life into your company or offering. Over the long term, co-opetition will spark and force innovation within your company, making it stronger and more agile.
Naturally, partnering with an organization who vies for the same customer base has its risks; but it also comes with a host of rewards, especially as it relates to expanding the value of your products and services, and proving to your customers that your company believes that innovation will deliver the best possible experience for them. It takes time and plenty of analysis to determine if it's the right course for your business, but as I've learned there are tangible and measurable benefits in the short and long term.
So, have you identified a potential partnership opportunity?