Collaborative Advantage is the ability to form effective and rewarding partnerships with other organisations, for mutual benefit.
Being a good partner is a key corporate asset, or capability, for any business today. In the private sector, a well-developed ability to create and sustain fruitful collaborations provides significant competitive advantage. In the public sector, it can greatly enhance service outcomes and social value.
In her 1994 Harvard Business Review article “Collaborative Advantage”, Rosabeth Moss Kanter outlined the key characteristics, forms and mechanisms of productive partnerships, based on a three year global research project.
Kanter identified three fundamental characteristics of productive partnerships:
- they are living systems, that evolve progressively in their possibilities. Beyond the immediate benefits of the partnership, they offer the parties an option on the future, opening up new doors and unforeseen opportunities;
- they involve collaboration – the creation of new value together, rather than being a simple exchange, or transaction; and
- they cannot be controlled by formal systems, but require a dense web of interpersonal connections.
Cooperative arrangements between organisations exist along a continuum, from weak and distant, to strong and close.
At one extreme, are mutual service consortia (as in Shared Services). Similar organisations pool their resources to gain a benefit, e.g. through reduced costs, or to gain access to advance technology.
At the mid-point are joint ventures. This is where organisations pursue an opportunity that requires the combined capabilities of each, e.g. the technology of one and the market access of another.
The strongest and closest collaborations are value-chain partnerships. This is where organisations in different sectors, but with complementary skills, link their capabilities to create additional value for their customers.
Organisations can participate simultaneously in many kinds of partnership, and partners in any relationship can play a variety of roles.
Active collaboration takes place when organisations develop mechanisms – structures, processes and skills – to achieve the necessary level of integration.
Kanter found that the most productive relationships achieve five levels of integration:
Strategic integration. This involves continuous contact between the top leaders of each organisation. Leaders should not form a partnership and then leave it to others to nurture the relationship;
Tactical integration. this brings middle managers and professionals together to develop plans for specific projects or joint activities;
Operational integration. This is the sharing of resources, information and knowledge to accomplish the planned joint projects and activities, e.g. through co-located teams, joint training programmes and data sharing;
Interpersonal integration. True collaboration will not occur unless a network of inter-personal ties develops between the members of each organisation. Personal relationships are very much the glue that binds the partnership together; and
Cultural integration. This requires that those involved in the partnership have the necessary communication skills and cultural awareness, to bridge any differences in culture that exist.
Kanter’s research found that some cultures are more adept at collaboration than others. She found that North American companies tend to take a “narrow, opportunistic view of relationships…barely tolerable alternatives to outright acquisition.” She found Asian companies the most adept, with European companies falling somewhere in between.
Many of the same principles outlined here, also apply to client-supplier relationships. Although not an alliance between equal parties, significant advantage can be gained by forming productive strategic partnerships across your supplier network.
Collaborative Advantage should not be confused with other forms of collaboration between organisations, e.g. concerned with the exchange of information and practices, i.e. networking, or the establishment of links in the service delivery chain, e.g. working against a common set of objectives. This comes under the broader heading of collaborative working.
A good structured approach to exploring and understanding your strategic partnerships is the Partnership Canvas, development by Bart Doorneweert.
The Partnership Canvas explores the ‘value exchange’ between existing or potentially new partners.
I will be exploring the use of the Partnership Canvas at a later date under “Methods”, but for now you will find lots of information on Bart’s web site.
It’s fair to say that not nearly enough has been written about collaborative advantage and strategic partnerships since Kanter’s landmark article. This is quite surprising because most organisations are not very good at them. And predatory moves are not unheard of.
Rosabeth Moss Kanter , Collaborative Advantage: The Art of Alliances, 1994
You can read the original article by Rosabeth Moss Kanter here. Read on-line if a subscriber of HBR, or purchase, at low cost, as a pdf.
Elizabeth Lank, Collaborative Advantage: How Organisations Win by Working Together, 2006
If involved in collaborative ventures, then certainly worth a read. Rather dull writing style. Still waiting for that killer book!
Jeffrey H. Dyer, Collaborative Advantage: Winning through Extended Enterprise Supplier Networks, 2000
This is about the application of Collaborative Advantage to supplier networks, drawing on practices first developed at Toyota; and since adopted by companies such as DaimlerChrysler and others. A useful general read as well, particularly Chapter 1.
David Frylinger, Oliver Hart and Kate Vitasek, A New Approach to Contracts, 2019
A key difference between a partner and a supplier is the nature of the contract. Too often, partnerships are established using standard forms of procurement contract, which are entirely unsuitable and sow the seeds of failure before the partnership has even begun. This article sets out the key differences and the form of contract that is required.
First Published: 22/11/2012 Last Updated: 10/05/2020