Doug Minter: The One Word Every Business Needs to Know
So I am at a dinner meeting in Lousiville, Kentucky where one of my colleagues mentioned the word CO-OPETITION.
Immediately after our dinner, I rushed back to my hotel and “Googled” the word and was instantly attracted to the philosophy behind it. In a nutshell, Co-opetition (sometime Co-opertition) is the philosophy that marries competition and cooperation.
The theory was coined by New York University Professor Adam Brandenburger and Yale professor Barry Nalebuff. They have creatively created a framework for businesses to collaborate and gain growth while using the notion of “game theory” to change the way the business game is played.
All us as entrepreneurs are constantly looking for ways to beat our competition and find new clients before our competitors do. This is the game that has been played in business for decades. What if the best way to gain additional cash flow and clients is to partner with your competition? And what if while partnering with your competition you also decide to change the rules for which the game is played to suit your advantage?
Yes, I know this sounds a little farfetched and sounds like another new way to sell books. However, this concept is actually an old philosophy that proves itself time and time again. Here’s the main concept:
Co-opetition is a combination of competition and cooperation. In the normal business world void of co-opetition, a business is in a static condition. This means you open your business in the same way, you provide a consistent service to your consistent clients and you market in the same ways to get new clients. The co-opetition model states that in the “new economy” things are more dynamic and most companies who want to grow can achieve more success by working with others than working alone.
When companies work together they can move from a static situation, i.e. a plateau in cash flow, and increase market share they would have never penetrated. At that point the same companies who were partners compete over the market share in the new market. Either way, it’s a win-win for all involved.
We as entrepreneurs have been conditioned to think that the game of business is a cut throat winner takes all scenario. In this very global and dynamic new economy that notion and conditioning has shifted. Co-opetition says that there can be multiple winners in a given marketplace. The goal of any business is to create return on investment no matter the condition of others in your industry. No matter what part of the industry you examine someone is making profit. Putting the co-opetition philosophy into your business allows for you to be one of them.
Local examples of co-opetition strategies are evident in the partnership of local firm Green Mountain Coffee and Starbucks. Both sell coffee and are competitors but they found ways to practice co-opetition. Starbucks and Green Mountain Coffee now compete with and against each other but in new markets that they created.
In the final analysis at some point in your business you will reach plateaus in your competition. If you are at that point where you are winning your fair share against the competition but they are too then you should look at practicing the notions of co-opetition. Moving forward the Propel program will be incorporating the practices of co-opetition into our training programs so stay tuned!
Doug Minter is the Knoxville Chamber’s Business Development Manager. Minter spearheads the Chamber’s Propel business development program and can be reached at email@example.com.
For more information on Co-opetition go to http://mayet.som.yale.edu/coopetition/