5 tips for collaborating with competitors for sustainability

Collaboration is a hot topic. Everyone says we need more collaboration to innovate and address grand challenges that we face as society. Collaboration, in many different contexts, is becoming mainstream.

Collaborations come in many forms but especially multi-stakeholder collaborations have been gaining ground in addressing complex, “wicked” sustainability issues in value chains. Inevitably, being involved in multi-stakeholder collaborations means that you’re sitting at the table with a competitor or two or more. What does collaborating with your competitors mean? On face value, competition is easy to spot. Sony competes with Samsung. Renault competes with Nissan. Yet, these companies did and still do collaborate together.

As a researcher who has a long standing interest in how organizations collaborate to innovate, cooperating with competitors is rather paradoxical. It raised questions. How exactly do they compete? What exactly are the competitive boundaries? Who exactly are competing? Where exactly in the value chain is competition the most fierce?

Below are insights about multi-stakeholder collaborations based on my ongoing research on collaborations in the context of R&D and sustainability.

1. Focus on pre-competitive topics or projects, like common industry problems, compliance or standard setting. For example, this pre-competitive collaboration in Kenya started a task force with competing companies and public agencies address water risk. In the Alliance for Responsible Denim, competing denim brands and denim mills worked together to develop post-consumer recycled denim to stimulate adoption in designs and ultimately increased volumes of post-consumer recycled denim.
2. Be aware of competitive dynamics in the levels of the value chain. Multi-stakeholder collaborations bring together upstream and downstream organizations (i.e. suppliers and buyers) in the vertical value chain. But competitive dynamics are more intense at the horizontal level and upstream, where products (mostly commodities) are harder to differentiate. In downstream horizontal levels, where markets can be more differentiated and niche, competition is indirect. For example, in the Alliance for Responsible Denim, even though all the companies produced denim products, they targeted different segments of the market, such as childrens, mens, low-end, or high-end.
3. Consider anti-trust, collusion laws, but there is often more room for collaborating with competitors than you think. Sustainability solutions require systemic change to value chains. Collaboration among organizations in horizontal levels (the competitor levels) in the value chain leverages urgency and negotiation power needed to realize change elsewhere in the value chain.
4. Balance individual organizational interests and collective interest. Multi-stakeholder collaborations aim to address collective problems often related to common goods or resources. Although collective goals, especially in sustainability, may be good for ‘all of us’, individual interests and benefits are what keeps organizations engaged and motivated to work on the problem. It’s essential to maintain a balance.
5. Use intermediaries to orchestrate and facilitate the multiple stakeholders. Competitors don’t magically bond together, especially in multi-stakeholder collaborations. Experienced, neutral intermediaries act as conveners, guiding the process and safeguarding engagement.

Find out more about our work on Collaborative Networks for Sustainability. Visit Network for Business Sustainability to download management and assessment guides on Collaborating with Competitors on Sustainability.

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