Co-opetition – the New Strategy Assisting Social Service Organisations to Make an Impact?

26 April 2017 - 8 minutes read

Over the May and June ebulletin editions, I’ll be focusing on Co-opetition, a revolutionary mindset that is assisting organisations achieve success through its ability to bring competitors together to achieve a common objective.

I recently came across the following timely, and I believe accurate statement: “In a time of accelerated and massive change when conventional resources are quickly being depleted, collaborative effort is needed to navigate the ‘rapids of change’.” 

Supporters of the current free-market economy argue that competition ensures efficiency and keeps prices as low as possible. This argument sounds reasonable in theory, but in practice competitive behaviour can weaken an organisation’s value proposition and drive higher organisational costs. We have all heard of strength in numbers and co-opetition gives us just that – strength.

In addition, organisations are acknowledging that even their best individual efforts can’t stack up against today’s complex and interconnected social world, so they are putting aside self-interests and collaborating with competitors to build a new civic infrastructure to advance their shared objectives.

This is called co-opetition and it’s a growing trend across the world.

What is Co-opetition?

Working together is not new to social services. We as an industry have a long history of leveraging the strength and expertise of colleagues to further our cause. Recent focus on competitive tendering has however weakened our collaborative muscles. In addition, individuals who pioneered collaborative relationships within the sector are now nearing retirement which presents a risk if new leaders do not expand current collaborative models.

Co-opetition is the collaboration or ‘working together’ – pooling knowledge, resources and relationships with mutually agreed-upon goals and possibly methods, between business or service competitors to address problems and deliver outcomes that are not easily or effectively achieved by working alone. Many start up organisations leverage co-opetition to maximise procurement benefits, customer acquisition strategy and minimise costs.

The aim of co-opetition, and the model itself, is to move the market from a zero-sum game, where a single winner takes all, to an environment in which the end result benefits the whole and makes competitors more profitable or successful in achieving their objectives. Unlike traditional collaborations in which businesses may come together to offer a joint promotion, co-opetition is a powerful way to develop a business strategy, identify new market opportunities or address complex social issues.

Human service agencies are encouraged to collaborate with other public and private agencies in providing services. However, they also often compete with these same partners for funding, qualified staff, and clientele so it’s a matter of finding what works to not only  create efficiencies in the administration and delivery of services, while also expanding the availability and accessibility of comprehensive services.

Co-opetitive relationships are attractive because the combination of effort and expertise can provide important benefits. Through the process service organisations can tap into the distinct competencies, resources and connections of their competitors to be more productive and innovative.

Why the Need for Collaboration?

There are a number of reasons why an organisation may decide to collaborate with a so-called ‘competitor’.

Reasons for Collaboration

Example

Operational requirements Two organisations wanting to improve the efficiency and scope of their HR services and professional development capability form a working partnership
Seeking funding Small community organisations come together to submit a joint funding application
Economies of scale A group of organisations hires a consultant to provide advice on a commonly shared IT issue
Mutual gaps in capacity Two organisations that have strengths in different areas rotate employees to share knowledge
External facilitation A government agency jointly funding two similar organisations brings them together to share policies
Strategic positioning Organisations identify their own strengths and weaknesses and plan to work with another organisation to complement their current position for future growth
Access to networks and new markets A small organisation entering a new market draws upon the contacts of its larger partner to conduct research on the feasibility and demand for its new service

Advantages of Co-opetition

Although many community sector organisations compete with other organisations for access to government and private funds, co-opetition can provide important benefits to both them and their clients. Your goal is to partner with your competitor/s in such a way that both parties can substantially benefit from the other’s resources — without stealing customers or damaging anyone’s credibility.

  • Improved offering and value proposition to funders and/or customers by leveraging the consolidated strength.
  • Economies of scale: If organisations work together on particularly social issues they can minimise costs, achieve greater efficiency with less duplicated effort
  • Cross-Endorsement: If your competitor isn’t directly competing with your market, then you can refer business to each other without losing customers.
  • Improved service coordination across agencies, with better pathways or referral systems for service users
  • A holistic approach to meeting client needs, with more efficient access to range of services required, improved quality and consistency of service and greater responsiveness to needs
  • Greater flexibility to respond to changing, emerging or more complex client needs and changing operational environments
  • Political and lobbying strength
  • Increased capacity to submit tenders and to deliver projects, and additional expertise, support or legal protection for small, new, or struggling organisations.
  • Wider geographical reach or access to new beneficiary groups
  • Expanded markets – businesses that complement each other but specialise in different areas can come together and compete in markets that would be beyond their individual reach
  • Innovation – by pooling resources, organisations can benefit through information and idea sharing, collaboratively participating in research and development and the sharing of best practices

In next month’s article I will be focusing on The Principles of Co-opetition and the Key Stages of Co-opetition.

For further details please feel free contact me – Rosanna Commisso, Home Support & Partnerships Coordinator on rosannac@yournorthside.org.au

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