Complexity in your network drives the need to develop partnerships to help you, and your partners, to overcome this complexity. This is a foundational platform that I think must be accepted in order to gain the full benefits that can be derived from collaboration and partnership. The focus on collaboration and partnering is becoming more important now, again I think because of the cost cutting measures that came as a result most recently from the recession. This downsizing trend though has been a constant theme for a long time now. I believe that we are now coming to a tipping point where the proven benefits have been identified and the potential benefits will be driven by fully embracing the collaboration model. I think that in order to fully embrace the collaboration model all partners must give up some of the control they exert over their network and allow their partners to fully support the requirement without the need for one partner to fully control the execution.
This release of control can be difficult, especially for larger companies that are accustomed to directing the activities. I think in this respect smaller companies are more aligned with the model that I believe is most beneficial to the partnership. As I’ve discussed previously, this model of partnership encourages the partners to step up and lead in the areas where they excel. For instance, I would not partner with a third party logistics provider to develop a marketing plan for an omni channel retailer. The key point in this model is that you identify your weakness through a SWOT analysis and then you identify and engage the partner with strength in that area. The critical aspect to this model is that once you identify the appropriate partner with the strength to support your need, get out of their way and let them execute.
In this model I think that the small company has a distinct advantage to engaging and gaining the greatest value from the partnership. The small company is more aware of their weakness and also more open to allowing their partners to get out of the way. Due to this acceptance I think that the collaborative partnership model can provide the smaller companies a means to compete with the larger companies. Smaller companies are more nimble and through the collaborative partnership model they can put together a suite of capabilities or services that can meet or beat their larger competition. The additional value of the collaborative partnership is that these capabilities can be engaged based on need and so there is no cost to maintaining as there would be in a larger company.
The collaborative partnership can be a very strong competitive tool and even advantage to overcoming complexity and reducing the cost of developing and maintaining the capabilities. The small companies will achieve a competitive advantage over their larger competitors through embracing this model to simplify and support the capabilities.
And now for the audience participation portion of the show…
How do you identify and address complexity in your current business? Have you ever tried to develop a SWOT for an external company to evaluate the fit for partnership and as a means to address complexity? Do you regularly develop a SWOT analysis to evaluate your internal capabilities and needs to address complexity?