4 things to know before teaming up with your competitor

Complex societal challenges such as climate change, refugee crises or unemployment all call for boundary-spanning, innovative solutions. In this context, partnerships between companies, governments and nongovernmental organizations (NGOs) have received much attention. Provided that the partners manage to interact and align their differences in a constructive way, these partnerships may give rise to unique expertise and resource combinations. Yet we rarely arrive at concrete solutions when just one company is involved in such public-private partnerships (PPPs). In fact, a less discussed dimension of designing systemic public-private solutions is the need for industry-wide approaches that involve several companies, often even competitors.

In the words of Paul Polman, CEO of Unilever: “The challenge is likely to encourage a much more collaborative form of capitalism. Companies will have to work with each other, not just with governments, NGOs and civil society”. Clearly, in view of the pooled array of industry expertise and assets, such multi-company PPPs can have a greater impact on complex problems. However, this does not come without additional challenges, involving competitive tensions related to the reputational push that PPP engagement may entail. Further, while successful PPPs may sometimes require companies to share their core assets and capabilities, some may be reluctant to do so, for fear of damaging their competitive advantage.

Our work at the Geneva PPP Research Center addresses this often neglected dimension. Overall, our work highlights four core lessons on how to manage tensions involved in the simultaneous collaboration and competition – what is sometimes called “coopetition” – of companies in PPPs. The focus here is on operational partnerships that are tasked with the development and supply of much-needed services and products.

1. Designing adapted partnership structures

Collaboration does not necessarily mean that all companies have to be involved in all activities. To successfully manage coopetition, partnership structures may organize the operational activities in comparable sub-tracks, which in turn are assigned to one company. This gives each company the ownership it may want for reputational reasons and allows for operational discretion within a particular track. The NGO and the government actors then play a key role in coordinating across the different tracks. Formal tools such as blueprints and logical frameworks may further support the coordination and integration across tracks.

2. Unleashing the power of competitive integration

Our research indicates that competition can in fact be fruitful for the development of PPPs. By sharing particular success stories in public and internal PPP communication, while at the same time providing equal opportunity for each company to be acknowledged in line with its contributions, the PPP managers can help create some healthy competition, increasing the overall impact. In this type of situation, monitoring is crucial. But monitoring must be results-focused – if it only looks at what companies are doing, and not what they are achieving, the competitive dynamics might lead to greenwashing, rather than actions that really do make a difference.

3. Fostering collaborative integration

Platforms or committees that bring together the different corporate delegates to jointly address problems that arose in the PPP process are essential for harnessing the power of multi-company PPPs. Having these committees chaired by well-respected NGO or public leaders may facilitate solution-oriented, constructive discussions.

4. Leveraging the power of stakeholder involvement and the social cause

Finally, our research shows that in areas where competitors might have to work closely together, the common social mission and the involvement of NGOs and public actors may function as a moral imperative to refrain from excessive corporate profiling and misuse of competitive information. Specifically, the PPP may create an environment in which all corporate actors know that any conflict would risk harming the hard-earned trust of partner NGOs and public organizations. Further, by constantly stressing the implications of any misbehaviour for the social cause – whether for the refugees, endangered ecosystems or disadvantaged target communities – the partners can create a partnership spirit that discourages inconsiderate behaviour.

We’ve already seen great examples such as the Logistics Emergency Teams and Egyptian Education Initiative, which have been leading the way in this area. It’s now up to us to build on and advance these first insights to get the best out of multi-company PPPs in the future

Author: Lea Stadtler is Head of the PPP Research Center at the University of Geneva; Gilbert Probst is Dean of the Global Leadership Fellows at the World Economic Forum and Co-Founder of the PPP Research Center

Image: Image: General Motors (GM) Chief Executive and Chairman Rick Wagoner (L) and United Auto Workers (UAW) President Ron Gettelfinger take part in the ceremonial handshake that signals the start of contract negotiations between GM and the UAW in Detroit, Michigan July 23, 2007. REUTERS/Rebecca Cook