Collaboration between companies has never been more important. In times of crisis, like now, a collaborative approach can address market asymmetry. But many companies restrict their collaboration to joint-venture, agreements limiting their level of collaboration.
Chinese companies, in particular, have amidst the crises that the businesses faced, shaped distinctive partnering practices. These are relevant for any business interested in pursuing greater collaboration.
Data sharing model
China's digital economy has created ecosystem giants, Alibaba and Tencent have adopted a more open data architecture. Alibaba allows established brands and lesser-known brands to share data in online/offline supermarkets.
This is different from American companies like Amazon. Alibaba is a network takes a commission on everything that passes through whereas Amazon takes care of inventory, limited sharing of data with third-party vendors. Alibaba allows you to coordinate with all service providers, backed by data of sellers, marketers, service providers, logistics and manufacturers.
This approach becomes even more crucial as companies worked to ensure uninterrupted supply during the crisis. data sharing enabled companies to ramp up supplies especially medical related.
many of the Chinese companies are digitally native, data sharing often comes naturally to them than it does to non-digital companies. It would serve the western companies well to offer more horizontal alliances predicated on data sharing as this would create more value than what they can do on their own.
Coalition-building model
Another approach to collaboration that has been effective in China is to scale business activities for social good. many of these companies have worked together to develop channels/ programs for tracking infected people, making online mobile payments etc.,
This type of collaboration for social good is lacking in western counterparts. Western companies will need to relook at this option and have coalitions to meet their specific needs and concerns.
Super-app platform model
This approach refers to a cluster of businesses which are close together enabling improved collaboration in every aspect of companies operations.
There are companies which are nothing but a cluster of digital platforms. They work with multiple companies, local governments(if required), digital payments to provide a real-time solution to users.
Digital platforms offer opportunities for competing and cooperating at greater scale and speed.
This requires protocols to be specified - guidelines to address cybersecurity concerns and competition issues, governance, information sharing.
Leaders can adapt these ideas to suit their local conditions by complementing their existing vertical relationships with more horizontal connections conducive to sharing data, building coalitions to deliver value, specifying protocols to provide suitable control to l=all participants while developing collaborations.
3 Lessons from Chinese Firms on Effective Digital Collaboration
by Shameen Prashantham and Jonathan Woetzel
HBR August 10, 2020
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