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If you regard your venture as being ‘you against the world’, chances are this will become reality. Rowan Gilmore explains why collaboration is good for business.

Perhaps you’ve seen “The Importance of Being Earnest” by Oscar Wilde, a farcical play in which two young gentlemen living in 1890s England both use the same pseudonym (“Ernest”) on the sly. That’s fine and dandy until they both fall in love with women using that name, which leads to a comedy of mistaken identities. If only those two sly foxes had spoken to each other first. At least they weren’t chasing the same woman!

However, Australian business can be even more farcical. We can all cite examples where two companies selling the same product focus so much on competing with each other that they miss much greater global markets that could be within reach by working together. What is it that prevents us being collaborative?

I can hear it now. “Our product is better than theirs!” “Our after-sales support is better resourced.” “They use cheap imports.” Yet companies with such attitudes will either succeed by destroying others, or will remain small and confined. For if innovation is the business mantra of this decade, collaboration is surely what will underpin it.

The concept of ‘open innovation’ is all about sourcing and developing new ideas and intellectual property from other organisations, and in taking product components to new markets, or in different applications, with other organisations. It requires deep, trusted collaboration. Collaboration, partnering and technology integration are inexorably linked to innovation.

Consider the evidence. A Global CEO survey conducted by IBM surveyed over 1,000 companies, ranging from SMEs to multinationals, and found that of the three most significant sources of innovation for companies, two were sourced from outside the organisation. Three-quarters of CEOs reported collaboration as “being of great importance”.

A key finding was that companies with higher revenue growth and better operating margins reported using external sources significantly more than slower-growth companies. When IBM analysed operating margin results, for example, over half of the extensive collaborators outperformed their closest competitors. Collaboration pays off.

However, as many of the CEOs surveyed explained, collaboration and partnering is “theoretically easy,” but “practically hard to do.” Whether it involves crossing internal or corporate boundaries, collaboration requires serious intent. As one CEO put it, “having a few beers together is not collaboration. Collaboration is a discipline.” It requires identification of partners, resources and managing complexity.

The AIC has developed a pilot program to encourage greater collaboration in the government procurement process, which has typically focused on open tendering, least cost and rapid delivery – not a great environment for innovation, particularly for small businesses. Yet because of the often large dollars involved, public-private partnerships present one of the greatest opportunities for the development of innovative solutions by local partners.

Unfortunately, time or budget rarely allows it to happen. To be successful, it requires early collaboration, so industry is aware of potential government procurement needs well before they are formally announced, and the research and development cycle is already aligned.

As a first step, governments ask the AIC to manage technology clinics in specific domain areas where we bring to the table government agencies with requirements, for example, in first responder services, together with R&D providers and industry players. Such a facilitated process introduces to each other stakeholders that are often unaware of the others’ capabilities and requirements, before the procurement process has begun, so that missing or needed IP can be identified, developed or acquired in time for the large procurement spends.

We have also developed frameworks and facilitated a number of collaborative R&D initiatives for governments. This framework has now been adopted as policy in agencies (such as Queensland Health) to govern collaborative R&D activity. Coupled with this framework are services to access networks and protocols that allow stakeholders to jointly develop new proof-of-concept technologies where any new IP is shared and commercialisation rights are conferred.

In a typical business process, collaboration intensity might start out as a market-based transaction across unit boundaries. Later, a key customer or supply chain might develop, enabling more informal sharing of information. A deeper form of collaboration might then evolve, with joint product development or account management, which requires sharing and creating knowledge, both tacit and explicit. However, the deepest form of collaboration is where partners have common goals and leverage each other’s skills and resources. They collect and create knowledge, but use it to share and create new insights. They have mutual destinies, aimed at creating new competitive spaces.

So let’s focus less on competing locally and become more earnest about collaboration.

Dr Rowan Gilmore is CEO of the Australian Institute for Commercialisation, which helps businesses, research organisations and governments increase the success rate of commercialising Australian innovation