Where it all went wrong...

It’s hard to believe we all missed it. It’s hard to believe it’s been right in front of us the whole time.

The 1980s that brought us Gordon Gecko and the tireless pursuit of greed is where our descent into global disaster ramped up and we’ve all been using that same strategic tool to carry us through to today… I’m not sure that’s been a good move.

In 1979 Michael E. Porter published his 5 forces competitive model in the Harvard Business Review. Since then, businesses have been using the model as a tool to perform environmental analysis during strategic planning exercises in order to help understand how they can better compete.

And since 1979 we have all been doing it wrong.

Fast-forward four decades and we find a planet woefully short of resources, an economy on the brink and business leaders who only know the rules of a game based on growth strategies from the 1980s. Ageing business leaders (and politicians) are unprepared to lead in what will be the defining century of humankind – and that’s because they are all wired to compete.

By definition, Porter's Five Forces Framework is a tool for analysing the competition of a business.

But this intense focus on competition is all in pursuit of what? Profit? Profit for who? The shareholders? Again, has set us wrong.

What if Michael Porter’s discovery was actually a collaboration model? What if instead of using the model to find leverage over competitors, buyers or suppliers or ways of heading off the competition who have new models or products or services, instead we used the tool to strategically collaborate and work together for the greater good of not just shareholders, but all stakeholders?

Do you see the difference?

Instead of competing to drive greater profits for a small number of shareholders, we could be collaborating – for the greater benefit of all our stakeholders.

Guess who the stakeholders are in each and every business? They are shareholders for one. But they’re also employees too. And their families. And their businesses competitors. And their suppliers. And their customers – who all have families too.

These stakeholders all make up the communities that form our business ecosystem. And communities of human beings make up the humankind of this planet that we all live on; a planet that is fast running out of resources.

I believe that we can impact that reality significantly if instead of acting like mindless fools and following bullshit competitive mindsets from the eighties, we instead consider asking different questions and driving change.

For example, instead of asking “how can we beat our competitors?” we could ask “how can we collaborate with our competitors for better outcomes for both our customers and our communities?” Instead of trying to put new entrants or new products and services out of business before they get traction, why don’t we collaborate and co-fund these models and ideas for the betterment of the market? And instead of working out how to develop competitive advantages that give us leverage in pricing over our buyers and suppliers to drive profits for a small set of shareholders, why don’t we consider how we could develop collaborative advantages that benefit our entire ecosystem?

An example of a commercial venture that has done this well is in one of the most competitive industries in the world. The airline industry. The Star Alliance network of competing airlines was originally established to work collaboratively to introduce savings on logistics, marketing and ticketing costs across the members which included Air New Zealand, Thai Airways, United Airlines, Air China, Lufthansa and Singapore Airlines. This has resulted in better options for their customers and greater cost efficiencies across the airlines.

Another example is The Sustainable Apparel Coalition, which is a group of more than thirty of the shoe and clothing brands making up the American apparel sector. It brings together retailers, manufactures, NGOs, academic experts, and the Environmental Protection Agency of the USA with one aim: to reduce the social and environmental impact of these products around the world. Through collaboration these companies and brands enjoy cost savings as well as reduced social and environmental impact, improved risk management, a better reputation, and the chance to adapt their business ahead of future regulations.  It would appear that doing the right thing can have commercial advantages?

Our planet’s decline began with the industrial revolution and the subsequent pursuit of individual greed and consumerism at the expense of each other. Our ageing politicians are incapable of solving the problems we are facing; they have proven this for decades. Quite simply, the external rate of change is exceeding the rate that they can even make decisions, let alone meaningful changes.

However, all is not lost. Businesses and business-people could lead us into a new decade of collaboration at the expense of competition, which may just be one of the answers to the challenges humankind is currently facing. Businesses are more agile, with more financial clout and, if we are being honest, often more common-sense.

Can we, the young leaders of today, change the way we do business by ending this mindless pursuit of competitive advantage?

Yes. Let’s create a new business concept… Collaborative Advantage.

Our future depends on it.