It’s Time to Change How We Think About Collaboration
What keeps business leaders up at night? A recent Google survey of 258 senior staff and C-suite executives listed the “cost of doing business” as their main threat. Other slightly less-dangerous perils included the speed of doing business, productivity then lack of talent, innovation, and agility.
Standard answers to these problems would include cutting budget, eliminating jobs and pressing suppliers. Not so obvious answers arise from facilitating internal and external collaboration. The same survey showed that 58% of the group ranked collaboration as having the biggest impact on their organization’s profitability.
Have you ever considered that “collaboration” could be one of the biggest drivers of business value? This post will touch on a strategy to help upgrade your thinking, highlight successful partnerships where businesses broke with their industry status quo and then touch on the tech to enable new relationships.
Conscious Capitalism
Free Market Capitalism facilitates social cooperation through entrepreneurship, competition and free trade. Conscious Capitalism updates Free Market Capitalism by charging leaders with the following:
- Find a business’ core purpose
- Create synergies with stakeholders instead of searching for trade-offs
- Take a systems approach to building a healthy ecosystem
“All the stakeholders matter in a business. Not just the investors. Customers. Employees. Suppliers. Investors. Communities. And the larger environment that we’re a part of. They all matter. We should manage the business so all are optimized through win, win, win, win strategies.” John Mackey
(Co-Founder/CEO of Whole Foods)
Companies have also successfully worked together long before this framework existed. The following three companies created new value by either collaborating around a discreet project, strengthening their ecosystem through shared values or generating a different type of relationships with new technology.
Notable Enterprise Collaborations
- Hess Corporation — built systems that facilitated communication among its suppliers, streamlining their efforts around the build of a single large project
- POSCO — created a vision for shared growth within their supplier ecosystem that sparked innovation within their commodity business
- BurstIQ — helped institutions share data across platforms to facilitate collaboration between healthcare providers
Hess Corporation [Gulf of Mexico]
Near the end of 2018, Hess Corporation decided to take a different industry approach to the construction of a deepwater oil rig by fostering collaboration instead of promoting competition among their suppliers.
“The industry has not been known for facilitating multi-party collaboration because every company likes to maintain a lot of control…Ultimately, we are trying to create a culture where there is more inter-supplier interaction without the oil and gas company having to be central to every interaction.” Evelyn MacLean-Quick
(VP Global Supply Chain)
The portal they built, Hess 360, provided access to live performance data and encouraged active supplier collaboration. Dennis Creech (VP of Lean Deployment) estimated they were able to “identify and remove waste that can deliver 40 percent or more improvements in cycle time and cost while strengthening safety performance.”
POSCO [South Korea]
POSCO had an insight in the early 2000’s that paying their suppliers immediately upon receipt of an invoice, instead of the industry standard net 30+ day terms, would better equip their partners for sustainable growth. Even though POSCO had the size to enforce aggressive terms (they are one of the largest steel producers in the world) the company focused on the long view for their ecosystem. POSCO has continued to build on a vision for shared growth by publishing their annual Corporate Citizenship Report (2018).
BurstIQ [United States]
Blockchain is predicted to have an outsized impact in the healthcare industry. Big names in the space, like Blue Cross Blue Shield and Express Scripts, have put together a consortium (Coalesce Health Alliance) then launched a pilot focused on patient identity. While this consortium is launching pilots, smaller more agile startups, like BurstIQ, are generating revenue from live projects.
BurstIQ’s HIPAA compliant blockchain-based platform helps health care organizations manage their data while allowing hospitals, payers and the entire value chain secure access to each others’ networks.
Intermountain Healthcare used BurstIQ’s platform to save their system tens of millions of dollars over two years.
This dynamic hasn’t previously been possible with non-blockchain infrastructure.
“Blockchain is a trust overlay over the Internet that allows parties to transfer representations of value, like health data, safely and securely.” Frank Ricotta
Blockchain, or Distributed Ledger Technology (DLT), is the glue that can hold these new type of relationships together and will be critical to driving future increases in business efficiency. DLT enables secure inter-compny data sharing while minimizing the risk of the information being maliciously altered. This technology also facilitates seamless distribution to stakeholders of the value created in a business ecosystem.
DLT/Blockchain
Old Concepts
- Companies need to lock down their data and deny outsider access
- The more advantaged party in a negotiation should take a disproportionate share of the upside from a transaction
DLT uses an encrypted ledger to safely store digital data in a way that makes it almost impossible to add, remove or change data without being detected. Any member can interact with the network without an intermediary, turning unknown entities into trusted resources. Stakeholders will still need to come together to craft the right business structure but a DLT will ensure that when value is created, it will spread across the participants. See here and here for more information on this technology.
New Idea
- New value, developed and then shared with all stakeholders, can be unlocked with the emergence of ecosystem collaborations facilitated by DLT
This post grew out of a search for understanding how different businesses/industries create value through collaborations. Reading “Conscious Capital” opened a whole new line of thinking about building a rich, collaborative, decentralized ecosystem. I hope this post sparked an interest in further exploring Conscious Capitalism, the real-world examples I touched on and the the data structure which is helping to create new enterprise efficiencies.
I am always excited to see creation at the intersection of new ideas and emerging technology. Let me hear about your successes and failures surrounding business collaborations. If you enjoyed this article, please share it with your friends and colleagues.
About the author
Erik Huckle is a former active duty Marine Infantry Officer and Amazon Product Manager. He attended business school at the University of Texas at Austin where he began his #blockchain and #entrepreneurship journey. He loves reading sci-fi books and always appreciates a good recommendation.
Twitter: beyourhuckberry; Medium
Additional reading:
https://hbr.org/2013/04/companies-that-practice-conscious-capitalism-perform
https://www.forbes.com/sites/gretchenfox/2019/03/26/the-rise-of-conscious-capitalism/#62a137b3139d
