Cooperation for Innovation

One of my Polish agricultural machinery clients was having a hard time. His budget for marketing had been halved, even though his sales targets were maintained at growth rate. I had a lengthy conversation with him about options in cooperation. The trick is to find another party that is complementary in product, market or brand, some business with a similar problem. He searched high and low and finally found a company that made car wax. They went on to create an award winning television commercial together, halving the cost and boosting sales. Cooperation is all about finding the win-win options.

In a previous article we looked at why cooperation is important for building communities for innovation and solving the big problems we face today. Now, let’s take a deeper look at why it’s important for innovation.

In a volatile and complex environment, accelerating time to market is essential. Many companies are moving towards cooperation:

• Joint development: Play-Doh was accidentally invented by a soap company, and then exploited by the Rainbow Crafts Company.
• Partnerships: TED talks has copyrighted it’s 18 minute formats. Anyone can host a TED-X and the best in class are distributed through central TED talks.
• Open competitive platforms: like the App store, and Threadless, an online community of graphic designers who create unique t-shirts.

However, there is a paradox in cooperating. Cooperation is only possible if you share your ideas. But sharing increases the risk of exploitation – once shared you can never take an idea back.

If you COOPERATE from a position of openness and trust when there are opposed interests and goals you increase the chances of FIGHTING.

So, how can you protect yourself and still cooperate to gain competitive advantage? Here are some rules.

Rule 1: Know when to cooperate

• If you have similar interests and goals and you are mutually dependent: COOPERATE
• If you have opposed interests and goals and you think you can win more by influencing power balance than by negotiation: FIGHT
• If you have different interests or goals but you are mutually dependent: NEGOTIATE

Rule 2: Know how to cooperate

One of the most researched cooperation games is called: The Prisoner’s Dilemma, where players may achieve mutual gains from cooperation, but it also allows them to exploit or not cooperate.

The importance of congruent consequence management is clear: When cooperation boundaries are broken or crossed, we must be quick to reciprocate, and then even quicker to forgive when actions are taken to put things right.

Rule 3: Know how to maintain a cooperative relationship

Trust is built in very small moments. These ‘sliding door’, seemingly inconsequential moments can make or break our relationships. Gottman identifies seven traits for creating cooperative relationships:

1. Emotional attunement – be aware of other people’s emotions.
2. Have their best interests in mind.
3. Make a commitment to the relationship.
4. Always give them the benefit of the doubt.
5. Focus on gratitude.
6. Invest in the relationship.
7. Create a shared narrative.

It’s all about trust

In any relationship (business or marriage) you may start with a high level of trust but it is only when that trust is tested that you really work out the level of trust you have, and if the relationship is worth developing. In the moments of betrayal, exploitation, fighting there are opportunities for trust building or for learning.

Trust builds over time, and is damaged in a moment.

What are you doing in your business to build trust among your employees, and with your partners so you can effectively cooperate?

Radical Agile Transformation Exercise: How cooperative are you?

As noted in the Prisoner’s Dilemma article, the winning strategy is to cooperate first, to be successful you need to be trusting and build trust:

1. Do you believe that you can trust people?
2. Do you have basic trust in people’s best intentions?
3. Do you clock it explicitly when someone moves from a cooperative to a negotiation or fight stance?
4. Do you forgive easily to move back into cooperation?
5. When you’re up against a deadline can you call on the support of your team?
6. Do you have the best interests of your team at heart?
7. How do you show gratitude to your team on a regular basis?
8. Do you always give your team the benefit of the doubt? At least for the first ‘defection’?

Bibliography: References & links

Kenneth Arrow (1962). Economic Welfare and the Allocation of Resources for Invention. http://www.nber.org/chapters/c2144.pdf

Mastenbroek, W (1992). Onderhandelen. Nederlandstalig

Gottman, J. (2011) The Science of Trust. W. W. Norton & Company

Lencioni, P. (2002) The Five Dysfunctions of a Team