Yorkshire Post - Business
Why a competitive spirit loses out to collaboration
Unlike football, business is not a competition. Much of what I thought I knew about business is wrong. One of the most inverted ideas I held was that ‘Business is all about competition’.
Many teachers, mentors, advisors, investors, and company directors would probably agree. But of late I’ve become convinced it’s the exact opposite. Business is all about cooperation. I’m going to justify that claim, starting at the top with cooperation between directors and shareholders.
With cooperation, the company gets invested in. Without it, the company doesn’t. Cooperate and the energies are combined, compete and they are wasted.
If directors are competing against each other, the company is a house divided. They will probably create a hostile working environment while losing focus on doing anything useful. Infighting will become the primary activity, and the company will struggle to even survive, never mind succeed.
In the workforce it is teamwork that gets things done. It’s unfortunate when businesses tangle themselves in office politics, diminishing creativity and draining energy.
Scaled up, corporations and institutions can become so internally competitive entire departments see their roles as thwarting the progress of others.
Amazon has a ‘Pizza Policy’ in terms of team sizes. If a team grows too big to share a pizza, it divides into two collaborating teams.
There’s also a lot to be said about creating a non-competitive working environment in terms of diversity and attracting top talent.
As for companies and suppliers, they rely on each other but must also put themselves first.
How to balance this? A few years ago supermarkets came under heavy criticism for unfair practices which exploited their supply lines. This lead to a rise in artisans and independents. Which in turn lead to a decline in supermarkets. Then there is cooperation between companies and customers. We’ve all been on the receiving end of a ‘computer says no’ mentality or an insurance company or bank arguing over who should bear the cost of something.
Cooperation was one of the key reasons early fintech companies were able to gain footholds in the market. They cooperated with customers, providing simple and transparent services. The old school institutions took five years to begin to understand the answer was to cooperate with the new fintech companies, by which time the new fintechs also saw the best way to enter the market was by cooperating with the companies that already held it. And thus, a WinWin was achieved in many instances, which is why the fintech sector continues to grow. In fact, competition is a largely outdated term in fintech.
So what about the last possible arena for competition? Surely one can’t cooperate with ‘market competitors’? I put the idea to one of the recent Barclays Techstars cohort, fintech startups that have been chosen from thousands globally to go through an accelerator process which values them at many millions of pounds.
Ania Kubow from fintech Nimbla.com had this to say: “Cooperation with competitors has taken us from strength to strength. Whilst some might view this strategy as counter intuitive, it is the exact opposite, we’ve come to see companies in similar situations as allies.”
Cooperation leads to collaboration. Collaboration leads to growth.
Competition in business is obsolete. It’s truly about collaboration, partnerships, synergies, and delivering the highest level of service and value. If you’re doing that as a company, you don’t need to think in terms of ‘competing for market share’. It only becomes a competition if you get distracted into trying to ‘beat’ other companies.
It’s an inferior mentality. The leader in a race doesn’t see the competition behind them. Top athletes know all they are ever competing against is themselves.