The Guiding Principles of Successful Collaborations

  1. Fear of Missing out: Sometimes working together is a clear win, but even if it isn’t, collaborate, as it may still be better than allowing someone else to take your place.
  2. Protect Your “Secret Sauce”: A collaboration must not imperil your trade secrets and intellectual properties and leave you at a severe disadvantage.
  3. Clear Division of Gains: A clear agreement on sharing of gains can avoid many conflicts.
  4. New Value Creation: A successful collaboration must create new value, and thus sustainable competitive advantage. A mere exchange of value may not be worth it.
  5. Collaboration is about Present as well as the Future: Beyond the immediate rationale, as synergies evolve, they open doors for new and unimagined possibilities. Strategic myopia is not advisable.
  6. Mindset of Nurturing: The effort of controlling a collaboration does harm to both parties. Together the relationship needs to be nurtured.
  1. Divergence of Competitive Goals for Convergence of Strategic Ones
    Partners contribute to mutual prosperity, by not entering each other’s business territory. Philips and Du Pont collaborated to make compact discs, and prospered as they honored the upstream/downstream division of effort and never entered into other’s business territory.
  2. Neither party has a special sauce at risk
    Apple and Samsung, Philips and Du Pont did not have any trade secret at stake.
  3. Sharing Special Sauce to Create New One and Beat Competition
    Consider the case of Ford and GM, in 2013, who agreed to share transmission technologies, and freed their engineers to work on electric vehicles. This made them excel in the present market as well as work for the future together.
  4. Can Take on the Market Leader Together
    Two small companies in alliance can fruitfully join forces to take on the leader. The success of this collaboration is more likely and long term because both partners benefit from their mutual stand that hurts the leaders.

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