It has been a well-documented fact; that the pandemic has seen greater levels of collaboration between businesses. Many have stated a hope that this marks a new era when there is far more openness with greater strategic alliances being formed. More and more competing businesses are working together in a spirit of collaboration to get through this most difficult of times.
However, there are also those who argue that it is not healthy; that strong economies rely on competitive markets where companies focus on their own performance.
It has become a major debate as many will argue that a “highly competitive” economy was maybe good for shareholders and pensions but at a cost to society, and to welfare. The environment pre-pandemic was anything but healthy with 17.9 million lost workdays, in a single year, through sickness at a cost of £34.6 Bn and with 10 million in the UK suffering from mental health issues. Add on top, the growing lack of trust in leadership teams and the growing wealth gap across society and many were asking if this good enough?
The pandemic has generated a new mindset which has seen more collaboration, more compassion, greater investment into sustainability and into people across society. This has been heralded as an important change in approach. However, will it last?
This is a debate which has long existed in the background. There are many seasoned directors who believe that strategic alliances and collaboration is the best road through difficult times. It is logical as no company has all the answers and is able to work in isolation. It is important to work in partnership with suppliers and with experts to ensure the best knowledge and approach to the market. The “control” mentality of the last decade has been seen to only increase tensions across markets and also within companies as it naturally leads to greater self-focus, secrecy and often poor behaviours.
The pandemic has generated a new mindset which has seen more collaboration, more compassion, greater investment into sustainability and into people across society.
The counterargument is that collaboration carries its own risk such as diluted competitive advantages. The argument is that competition has the potential to be a rewarding – performance-enhancing – business-to-business marketing strategy, but there are risks associated with companies working with untrustworthy partners. It may be good during difficult times but carries greater dangers during good times.
Where the real change in the debate may be happening is over sustainability which has become a primary factor for all boards to consider as the best talent and many investors want strong sustainability strategies, not just environmentally but social, cultural and economic.
The argument is that a strong sustainable economic strategy will find the right balance between a company’s need to be competitive but also with a clear eye on its responsibilities to communities, people and the environment. This then creates a new air of collaboration as the focus is on the role of the company in an economy rather than alliances for the sake of business.