Either business has radically changed in the last few years, or I’ve become a wiser man…
First published by Bird Lovegod in the Yorkshire Post. Viewable here on Pressreader.
Much of what I thought I knew about business is wrong… One of the most inverted ideas I held was that ‘Business is all about competition’… Many teachers, mentors, advisors, investors, and company directors would probably agree. But of late I’ve become convinced it’s the exact opposite. Business is all about cooperation. I’m going to justify that claim, starting at the top. Cooperation between directors and shareholders. With cooperation, the company gets invested in. Without it, the company doesn’t. Cooperate and the energies are combined, compete and the energies are at best wasted, at worst destructive. Cooperation between directors. If that goes and directors are competing against each other, the company is a house divided. They’ll probably create a hostile working environment for all concerned, whilst completely losing focus on doing anything useful. Infighting will become the primary activity, and the company will struggle to even survive, never mind succeed. Cooperation between employees. Teamwork gets things done. It’s unfortunate when businesses tangle themselves in office politics, diminishing creativity and draining energy. Scaled up, corporates and institutions can become so internally competitive entire departments see their roles as thwarting the progress of others. Amazon has a ‘Pizza Policy’ in terms of team sizes. If a team grows bigger than 12 or 14 members, too many to share a pizza, it divides into two collaborating teams. Like organic cell division. Amazon now has nearly 600,000 employees. There’s also a lot to be said about creating a non-competitive working environment in terms of diversity and attracting top talent.
Cooperation between companies and suppliers. They rely on each other. Yet must also put themselves first. How to balance this? A few years ago Supermarkets came under heavy criticism for unfair practices, exploiting their supply lines to enforce their own power and influence. This lead to a rise in artisans and independents. Which in turn lead to a decline in supermarket shopping.
Cooperation between companies and customers. We’ve all been on the receiving end of a ‘computer says no’ mentality or had to compete with an insurance company or bank over who should bear the cost of something. An attitude of cooperation was one of the key reasons early fintech companies were able to gain footholds in the market. They cooperated with the customers, provided deliberately simple and transparent services, and in doing so, were highly effective. The old school institutions took five years to begin to understand the answer was to cooperate with the new fintech companies. By which time the new fintechs also saw the best way to enter the market was by cooperating with the companies that already held it. And thus, a Win Win was achieved in many instances, which is why the fintech sector continues to grow, and is now primarily about collaborating and cooperation. In fact, competition is a largely outdated term in fintech, rarely used. If you’re competing you probably haven’t innovated anything. No one is interested in how a company is planning to compete in a market. They want to know how they’re going to change that market. So what about the last possible arena for competition? Surely one can’t cooperate with ‘market competitors’? I put the idea to one of the recent Barclays Techstars cohort, these are fintech startups that have been chosen from thousands globally to go through an accelerator process which values them at many millions of pounds.
Cooperation leads to collaboration. Collaboration leads to growth. Here’s what Global consultancy Capgemini have to say on the matter in their recent World Fintech report.
“With more than 75 percent of Fintech firms identifying their primary business objective as collaborating with traditional firms, it is essential that both Fintechs and traditional firms transform their business models by collaborating to drive innovation while retaining customer trust,” said Anirban Bose, Head of Capgemini’s Financial Services Global Strategic Business Unit “Without an agile and committed collaboration partner, both traditional and Fintech firms risk failure.”
Competition in business is an obsolete concept. It’s truly about collaboration, partnerships, synergies, and delivering the highest level of service and value to customers. If you’re doing that as a company, you don’t need to think in terms of ‘competing for market share’. It only becomes a competition if you get distracted into looking at what other companies are doing and trying to ‘beat’ them. It’s an inferior mentality. The leader in a race doesn’t see the competition behind them. Top athletes know all they are ever competing against is themselves.