This column is part of Globe Careers' Leadership Lab series, where executives and experts share their views and advice about leadership and management. Follow us at @Globe_Careers. Find all Leadership Lab stories at tgam.ca/leadershiplab.
Strength in numbers. It's a tactic historically deployed in the context of battle, but could it also be used as a viable strategy for business growth?
In Canada, the landscape for businesses is increasingly becoming more cutthroat. Tough economic conditions coupled with heavy competition in every sector has resulted in smaller businesses searching for creative ways to differentiate themselves and provide value-add services in order to succeed.
Joining forces with other like-minded businesses is one such approach that you can use to help your small business thrive and remain competitive. Collaboration and sharing of resources can potentially reduce costs, and deliver better customer service and a more robust offering. It's also an opportunity to learn from one another's failures and successes and glean fresh ideas off each other. It's an alternative way of doing business that is gaining traction.
Canadian credit unions are great examples of like-minded organizations coming together to stay competitive. According to a new study from the C.D. Howe Institute, the "Big Six Banks" have an estimated 93 per cent of market share, up 3 per cent from a decade ago, despite more entrants into the markets. And yet, credit unions have managed to sustain their growth despite being severely under-resourced compared to the banks. A history of collaboration and working together towards a common goal of providing banking services for the communities they serve has proven to be a potent formula for success.
My firm, Credential Financial, was formed by the credit union system more than 20 years ago to fill a gap in their wealth-management offering. At the time, mutual funds were seen as a must-have investment for Canadians and yet credit unions had no vehicle in which to offer them to their members. Rather than seek out another firm to partner with, and possibly risk compromising their community-based values, they decided to collaborate and create their own firm.
A new economy, based on the principles of co-operation, is becoming more prevalent. Here are a few of the positive trends we're seeing:
Work with others, not against them
Rather than cannibalize each other's business, you and similar-sized organizations, perhaps even competitors, have more to gain by sharing strategies and learning from each other's past experiences than keeping your secrets hidden.
For example, few would have predicted that top American universities Harvard and MIT would co-sign an agreement to create a non-profit organization offering free online courses for anyone with access to the Internet. Projects like this can have a major impact on societies around the world by investigating new learning methods and technologies, not to mention boost the reputation of the institutions who are behind them.
Sharing is caring
Enabled by technological innovation, strategic collaboration has never been easier. Companies are not only sharing tangible assets like unused real estate, there are examples of firms loaning out talent and intellectual capital to others to help on specific projects. It may seem counter-intuitive at first, but the innovative results in the form of new products and services can be surprisingly rewarding.
Like any relationship, things can go sour quickly. If expectations between both parties differ, or if one party feels like the other is not pulling its weight, it will not result in a healthy collaboration. That's why cultural compatibility is a vital element of successful alliances.
Sometimes opposites attract, but more often than not it's the partners who share similar values that thrive. Our partnerships with the credit unions we work with have grown and transformed over the years because we share a common purpose.
Finding like-minded organizations to collaborate with can help your business thrive in the new economy. What are organizations do you feel you align well with? Are there any that you'd be curious to work with? Think about it, because it could very well be the key to your business' future success.
Doce Tomic is CEO of Credential Financial, Vancouver.