Companies that build formal collaborations with rivals boost their business performance, new research has found

Working with business rivals can help rather than hinder business performance, according to a new study of 107 companies by the Warwick Business School (WBS).

Discussions around the standardisation of collaborative business relationships between rival companies suggest that it could bureaucratise the “joined-up” process and hinder creativity. However, a new study of 107 companies by the Warwick Business School (WBS) revealed the benefits of formal collaborative processes in business performance. 

“The prior evidence we reviewed had suggested standardising collaboration would not be feasible, because it is such a long-term activity and is very flexible in terms of the day-to-day activities and problem solving. But when we investigated it further we found that is not true,” Dr Mehmet Chakkol from WBS explained.

“Collaboration leads to a host of benefits including boosting business performance and this is statistically higher for organisations that have formalised their collaborations through the British Standard for Collaboration (BS11000).

“We found companies need and want to know what to expect from a collaboration and they want to know what a good collaboration looks like, especially as they are happening more and more.

The key challenges for collaboration.

According to Dr Chakkol, a formalised process bring its benefits. Top of the list is improved business and operational performance. “For example the collaboration between Lockheed Martin and National Air Traffic Services has ensured that Heathrow has run at 98 per cent capacity for more than a decade thanks to bothworking hard to optimise their partnership through a standard process,” he added.

“Collaboration has also brought more contracts for companies, enhanced risk management, brought innovation, increased client confidence and repeat business, new product development as well as multi-million pound efficiencies.”

The study found the increasing amount of global trade, and complex and longer supply chains means companies are more interdependent than ever.

“Customers are pushing suppliers into collaboration rather than competing for contracts as it is more efficient,” co-author of the research, Dr Mark Johnson explained. “This is something the UK Government is very keen on now, and it is happening across different industries from transportation and construction to healthcare and retail, so finding a tried and trusted method of collaborating through an international standard is something companies are looking for.”

The Warwick Business School research revealed business owners’ expectations for engaging in more collaborative projects in the future.

The study found that nearly 80 per cent of companies believe they will be spending more time on collaborations in the future, and according to Dr Johnson, the biggest barrier to this may be shaking up existing workplace culture.

“We found the most significant future challenge for adopting collaborative working is to change traditional organisational cultures to accept more co-operative business models. This highlights the need to identify and further develop competencies and skills to harness collaborative working both at individual and organisational levels”.