Why isn’t there more cooperation between companies?
Particularly now that economic forecasts are gloomy and long term trends like globalization and population ageing account for new challenges, the entrepreneur cannot let a single chance go by to optimize operational efficiency.
In this respect, a solid cooperation with another company can certainly contribute a lot.
What comes to mind includes among other things:
- joint marketing and distribution
- opening up of each other’s markets
- pooling or sharing of knowledge and skills
- taking advantage of bulk discounts in the area of purchasing and manufacturing
In any case, there is no shortage of logical motives to work in cooperation with other companies.
Why is it then that so little use is made of the many forms of strategic cooperation the entrepreneur has available to him?
Major stumbling block to a lucrative cooperation often arises from personal motives, of which the entrepreneur is sometimes not even himself aware. Does the cooperation undermine the image of my company? Can the other party be trusted and will I compromise too much autonomy and control? Will my reputation as a self-sufficient entrepreneur suffer at the hand of this partnership?
These are of course all legitimate questions, which every sensible entrepreneur will ask himself. This kind of doubt, coupled with the high chance of failure which in practice tends to go along with cooperation, actually forms an enormous obstacle to a successful partnership.
Nevertheless, entrepreneurs shouldn’t let themselves be scared off too quickly. Starters also have a high rate of failure, yet every year more than 120,000 eager new entrepreneurs step up to bat.
A careful approach is essential
Given the obvious advantages to be gained, it’s definitely worth the trouble to investigate why cooperative ties are often short-lived and what kind of safety measures should be taken to avoid such an unfavorable outcome.
A lot of uncertainty could be eliminated if a clear and familiar course for an eventual cooperation is mapped out.
After the exploratory phase, wherein the best candidate will be selected, follows a phase in which both parties agree upon their common goals.
Subsequently, the most appropriate form of cooperation is chosen and finally one moves to put a cooperation agreement into place. Of course it’s not enough just to have everyone looking at things the same way. It’s a start, but a successful cooperation actually requires a lot more.
The 9 commandments
Assuming that both companies are strategically, organizationally and operationally a good fit and also that the company culture doesn’t differ too greatly, then a number of golden rules need to be observed:
- Strict compliance to agreements made
- No one-sided changes to the rules of the game
- A mentality of “one hand washes the other”
- A readiness to go the extra mile
- No exploiting of a position of power
- No gloating in case of big advantages
- Respect for one another’s company culture
- Levelheaded reaction to misunderstandings
- Good foundation of obtaining results
A cooperation that is bound by these principles, supported by a solid structure and openly transparent procedures, has an excellent chance of making it. More so if the leadership is also flexible enough and communicates well.
Only then is there a good basis for mutual trust and support for cooperation which can add value, from which both companies profit.
It does seem understandable, that many entrepreneurs do shy away from the complexities of cooperation and its many ifs and buts.
The obvious question is however, whether entrepreneurs can afford to go on ignoring these types of opportunities.