Business Models

  • Negotiation vs. Collaboration

    During a taped television interview last week in New York, I was asked—among other things—about the difference between negotiation and collaboration. In the coming weeks, I’ll have more on the interview, the show and the upcoming air date.

     

    I summed up the difference between negotiation and collaboration this way:

    Negotiation is “I win, you lose” or “I win bigger than you win.”

    Collaboration is “win, win.”

     

    Also, negotiation usually involves suspicion and separate agendas. Collaboration requires trust and shared goals.

     

    With the increasing interest in collaboration and the race to become—or at least appear—collaborative, there is continued confusion over the meaning of collaboration. In The Culture of Collaboration book, I define collaboration as “working together to create value while sharing virtual or physical space.”

     

    To truly collaborate, we must move away from command-and-control, internally-competitive, star-oriented cultures to embrace cultures in which people across the enterprise gain access to the same data and information and provide input into process improvements, market creation, innovation and other key issues and decisions. In a collaborative culture, people feel their input counts regardless of their role in the organization.

     

    And there are plenty of misconceptions about collaboration including:

     

    Some believe that a strategic alliance is collaboration. Often a strategic alliance is nothing more than a joint news release!

     

    Some believe that partnering is collaboration. However, partnerships do not necessarily create value. Partnering can be a prelude to collaboration, but collaboration takes partnering to a new level. In

    The Culture of Collaboration book, I use the term global collaborative enterprise (GCE) to describe interdependent companies engaged in shared creation of value, often in real time. That value typically translates into products or services. And there are examples of collaborating competitors creating more value than partners!

     

    Business, the media, analysts and others are embracing collaboration as a buzz word. Let’s make sure we go beyond window dressing, understand the real value of collaboration, and unlock that value through the interplay of collaborative culture, tools and environment.

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  • Community Collaboration and Recycling San Francisco Style

    San Franciscans toss away at least five bicycles a day. When the mountain bike craze ebbed, that number was higher—at times, twenty bikes a day. And SF Recycling & Disposal, Inc. (aka The Dump) also gets ten to twenty pieces of exercise equipment daily—everything from elliptical machines to NordicTrack skiers. Each day the dump also receives about twenty plants, some of which volunteers transfer into the dump’s garden. 

     

    I learned many of these statistics Saturday morning from Deborah Munk, who coordinates art and education programs for the dump. Deborah was conducting a public tour, which included a heavy dose of recycling and trash facts. I learned that China is paying top dollar for recycled paper. Every day, the San Francisco dump ships hundreds of bales of paper to China, which helps fuel the country’s growth.

     

    Bicycle Art This particular public tour was crowded with artists vying for the dump’s Artist-in-Residence program, which gives artists a stipend, a studio, a show, and access to San Francisco’s waste stream so that  they can get first dibs on materials for sculptures, paintings, videos, and other media. Paul Cesewski, former artist-in-residence, turns recycled bicycles among other items into kinetic art. Nancy Calef, who was taking Saturday’s tour before applying for the program, uses recycled objects ranging from eyeglasses to emery boards in her 3D “Peoplescapes.” Peoplescapes are sculpted characters and applied objects on canvas which juxtapose people in recognizable places and situations weaving together a story about contemporary life.  Calef also recycles canvases for a technique called “plane slashing,” which combines two or more paintings into one.

     

    The artists collaborate with the recycling sorters, who look out for requested materials. One artist recently asked for some pens, and a few hours later he received hundreds of them. Those pens are now a sculpture. The artists help promote recycling, and they’re one aspect of how people throughout the dump’s ecosystem work together to create value.

     

    San Francisco’s recycling program is a study in collaboration. Seventy percent of the two thousand tons of waste a day that flows into the dump is recycled. Clearly, San Franciscans take the time to sort their refuse into bins color-coded for trash, compost and recyclables. And once the waste arrives, union sorters identify items that can be sold as commodities, reusable stuff and electronic waste. The dump makes some stuff, such as recycled latex paint, available for free. Also, more than eighty thousand homes and two thousand restaurants compost their food scraps. San Franciscans get some of their compost back as free soil a couple of times a year, and wineries nourish their vines with soil made from SF compost.

     

    Some dump team members are pressing to take collaboration to the next level. “We’re just scratching the surface,” insists Bob Besso, recycling manager for Norcal Waste Systems, Inc., which runs the dump. Currently, San Franciscans pay $107 a ton to dump waste. SF Recycling & Disposal, Inc. sells much of the recycled waste as commodities. All that exercise equipment becomes scrap metal. Besso believes the dump should designate drop-off areas where specialists could evaluate specific categories of items such as exercise equipment and bicycles, furniture and textiles, clothing and other items. Rather than charge for accepting these reusable items, the dump could take them for free and sell them at a higher price than that of a commodity. Garbage Reincarnation, Inc, a non-profit in Santa Rosa, California has achieved success of this sort. Besso believes the San Francisco dump could become a model for large-scale reincarnation of waste.

     

    SFRecycling & Disposal, Inc. comprises an ecosystem of collaborators who are striving to create greater value through innovation, education, and brainstorming. The SF Dump’s approach reminds us that rather than letting new ideas die on the vine, our challenge is to improve ideas through collective input so that we achieve awesome results.

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  • Lodestar Gets Nearly 700 Nominations for $250K Collaboration Prize

    The Lodestar Foundation has received 600 to 700 nominations for its first annual $250,000 collaboration prize. Today is the deadline, and I just got off the phone with Lois Savage, the foundation’s president. Lois tells me that the impetus for the prize is the lack of models for collaboration among non-profits. The prize process creates the opportunity to gather information about effective collaborative practice models that academics and non-profit practitioners can study.  


     


    Too often in the non-profit sector, funders try to drive collaboration by forcing organizations with similar objectives and interests to work together. Lois calls them “shotgun weddings.” These usually fail. Similarly, successful collaboration in the for-profit workplace requires more than tools and an edict to collaborate.


     


    The Collaboration Prize recognizes collaboration among two or more nonprofit organizations that would otherwise provide the same or similar services and compete for money, clients and staff. The Lodestar Foundation, created by real estate developer Jerry Hirsch of Phoenix, focuses on process and structure of non-profits rather than on specific philanthropic activities. Lodestar’s guiding principle is encouraging non-profits to use efficient business practices. Collaboration fits into that framework by maximizing resources and reducing competition among organizations tackling similar issues. Lodestar has funded cooperative ventures and new organizational structures including coalitions and mergers.


     


    Here’s how the prize selection process works: La Piana Associates of Emeryville, California, a management consulting firm for non-profits, will review submissions for eligibility. AIM, the Arizona-Indiana-Michigan Alliance, will review nominations and select eight semi-finalists. AIM is a consortium that includes The Lodestar Center for Philanthropy and Nonprofit Innovation at Arizona State University, the Center on Philanthropy at Indiana University, and the Johnson Center for Philanthropy and Nonprofit Leadership at Grand Valley State University in Michigan. Sterling Speirn, president and CEO of the W.K. Kellogg Foundation, will chair a panel that will choose the recipients from among the finalists.


     


    The Lodestar Foundation is one of a growing number of foundations that are embracing collaboration. In July of 2006, the Bill and Melinda Gates Foundation announced 16 grants totaling $287 million to fund an international network of highly- collaborative research consortia focused on developing an HIV vaccine. In The Culture of Collaboration book, I write about the Myelin Repair Foundation’s collaborative research model. The model creates incentives for data sharing and collaboration among scientists at different universities working on treatments for multiple sclerosis.


     


    While the non-profit sector has focused recently on adopting efficient business practices, the for-profit sector may also look to non-profits for guidance. There is certainly room for knowledge transfer among both sectors to share successful collaboration models.

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  • BMW, Daimler and Collaborating with Competitors

    Manu12lowres1_3 Collaborating with competitors involves yin and yang, two opposing and simultaneously complementary facets of a single phenomenon. This balance can create substantial value, particularly when the collaboration involves common processes that provide no competitive advantage. An example of this is the Exostar consortium, which has brought efficiencies to purchasing through a shared, online environment.

    BMW is currently in talks with its competitor, Daimler, to produce and purchase vehicle components including engines. As a story by Edward Taylor in today’s Wall Street Journal points out, Germany’s archrival luxury car makers have determined that collaboration may give them bigger economies of scale to prevent further erosion of margins.

    Ford Motor Company has successfully reduced costs by sharing components across its brands. The premise is that there are many commodity parts that have little to do with customer perception of brand value. In Ford’s C-Car shared technologies program, engineers and executives of Mazda (partially owned by Ford), Ford Europe and Volvo collaborated to reduce development costs for specific small car models. An added benefit is that Ford has reduced internal competition among brands and increased the sharing of best practices.

    Since BMW and Daimler are smaller than Ford, the German companies have fewer opportunities to achieve economies of scale without collaborating across company lines. The Wall Street Journal quotes a source who says that executives and engineers from both companies “from the top right down to the middle management” are discussing collaboration.

    My experience in working with numerous organizations on implementing collaboration is that a bottom/up strategy is just as important as top/down. For BMW or Daimler to collaborate with an arch rival involves a cultural shift, and there will undoubtedly be resistance. Therefore, leaders must engage and involve team members at all levels and corners of the organization in this shift so that both organizations will ultimately embrace the new way of working. 

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  • Washington Times Understands The Culture of Collaboration

    Many traditional media outlets have difficulty understanding collaboration. Newspapers, magazines and TV networks are typically steeped in star culture and embrace competition. So the notion that collaborative culture is changing business models and the nature of work leaves many reporters and editors scratching their heads.

    Last Sunday, however, The Washington Times showed that it’s head and shoulders above most other traditional media outlets when it comes to understanding collaborative culture and the future of business. For a media outlet to capture the essence of collaboration, the reporter and his or her editor need to be on the same page—collaborating, if you will. Clearly, this occurred at The Washington Times. The paper selected James Srodes to review The Culture of Collaboration book. You can read the review here. Srodes, a veteran business writer, is well-suited to understand the value of collaboration. He is the former Washington bureau chief for both Forbes and Financial World magazines.

    According to Srodes’ web site, he is also the biographer of Benjamin Franklin, auto industry maverick John DeLorean and Allen Dulles. Dulles served as the director of central intelligence under U.S. Presidents Eisenhower and Kennedy. Currently, the intelligence community is working on adopting a more collaborative culture.

    In The Washington Times, Srodes writes:

    “Where once there were chains of command, flows of information (and power), central locations and memo buck slips of Talmudic complexity and obtuseness, technology has made it possible for diverse creative and managerial teams operating in locations around the globe to work simultaneously on projects that bring better, cheaper, more effective products on line at an accelerated pace.”

    At the end of the review, Srodes notes that the culture of collaboration “may be the most exciting business development since the assembly line.”

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  • Strayform Lets Artists Collaborate with Patrons

    Brandt Cannici has circumnavigated the globe, speaks Japanese fluently plus has a background in programming and finance. A mutual friend put us together recently, because of Brandt’s interest in collaboration. His most recent endeavor is Strayform, a social networking startup that connects artists with people wanting to sponsor artistic projects—music, movies, books, software, and research. You can check out Strayform here.

    The idea behind Strayform is to cut out gatekeepers who are often a barrier to getting artistic projects off the ground. So rather than waiting for a publisher, record label or studio to say yes, artists can get micro grants from those who believe in them. Strayform also includes a licensing engine so that artists can grant creative commons licenses for non-commercial purposes as well as commercial licenses.

    One project currently listed on Strayform is an oil painting to commemorate Silicon Valley leaders. Based on the concept of commissioned portraits, this business model involves micro patronage. For $200, you can be included in the artist’s rendering of Silicon Valley leaders. Not a bad price, considering the painting might one day hang in a museum…or at least on somebody’s wall. You can view the project proposal here.

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  • Bill Gates, Jeff Raikes and Collaboration Microsoft-Style

    “The PBX is almost like the mainframe was,” Bill Gates told customers and business partners yesterday at the Bill Graham Civic Auditorium in San Francisco. Gates was referring to the private branch exchange, the device that links businesses to the public switched telephone network. Gates added that the shift from the public switched telephone network to unified communications over Internet protocol is “as profound as the shift from typewriters to word processing software.” Later, Jeff Raikes, president of Microsoft’s business division, insisted that unified communications will transform business communications as much as email did in the 1990’s.

    Gates_and_raikes

    Gates and Raikes were speaking at a launch event for a suite of communication and collaboration products: Microsoft Office Communications Server 2007, Microsoft Office Communicator 2007, Microsoft Office Live Meeting and Microsoft Roundtable. Microsoft Office Communications Server makes multiple collaboration and communication modes available right from business productivity applications. Collaborators can see instantly which colleagues are available and can connect on the fly through instant messaging, voice, web conferencing or videoconferencing. This capability is called presence. Microsoft Office Communicator 2007 is the client software, while Microsoft Office Live Meeting is the latest version of Microsoft’s web conferencing software.

    Roundtable_2

    RoundTable (see image) is a table-top video and audio communications system that provides a 360-degree view of meeting participants plus tracks the speaker. The most compelling aspect of RoundTable is the ability to capture meeting audio and video and review key portions later.

    Microsoft and fifty partners participated in the event. And although “unified communications” is the label these companies are using for the new, merged approach to communications, this effort is as much about enhancing collaboration as about communication. And, in fact, Microsoft customers appearing in a video shown during the event and futurists presenting on Microsoft panels later in the day repeatedly referred to improved collaboration.

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  • Collaboration Produces First Boeing 787 Dreamliner

    On Sunday, Boeing unveiled its first 787 Dreamliner at the company’s final assembly plant in Everett, Washington. With former NBC News anchor Tom Brokaw hosting the festivities, Boeing broadcasted and webcasted the event in nine languages to more than 45 countries. 787_launch Boeing Commercial Airplanes VP and GM Mike Bair made an important remark for those of us interested in collaboration: "I am so proud of the men and women of Boeing and of our partner employees in the 70 companies that have brought this airplane to the passengers of the world."

    Bair’s reference to “partner employees” is significant in that Boeing is moving away from designing and manufacturing planes by itself. Instead the company is becoming a large-scale systems integrator and collaborating with global partners to produce the 787 Dreamliner and other planes. In The Culture of Collaboration book, I describe the 3 levels of collaboration at Boeing and how CIO Scott Griffin and Sergey Kravchenko, president of Boeing Russia, worked together to create a real-time collaborative design environment and the culture to support it. The environment, culture and tools that Griffin and Kravchenko have implemented have helped create a more efficient and profitable business model for Boeing. 

    The book uses Boeing as a model for the global collaborative enterprise (GCE), which I define as “a collection of interdependent companies that engage in shared creation of value, often in real time.” The partner employees to which Mike Bair refers are the collaborators who comprise Boeing’s GCE. While more and more companies are collaborating internally, very few are in the same league with Boeing when it comes to collaborating with business partners.

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