Citation
Gomes-Casseres, B. (2016), "Cooperation AND competition: how to get the best of both worlds", Strategy & Leadership, Vol. 44 No. 1. https://doi.org/10.1108/SL-11-2015-0087
Publisher
:Emerald Group Publishing Limited
Cooperation AND competition: how to get the best of both worlds
Article Type: The strategist’s bookshelf From: Strategy & Leadership, Volume 44, Issue 1
Benjamin Gomes-Casseres
Benjamin Gomes-Casseres, a professor at Brandeis University's International Business School (mailto:bgc@brandeis.edu) where he directs the Asper Center for Global Entrepreneurship, is the author of Remix Strategy: The Three Laws of Business Combinations (Harvard Business Review Press, 2015).
Friend & Foe: When to Cooperate, When to Compete, and How to Succeed at Both
Adam Galinsky and Maurice Schweitzer, (Crown Business, 2015).
When Ray Noorda, then CEO of Novell, coined the term “co-opetition” in the 1980s, he probably had no idea that he was throwing a monkey wrench into strategic thinking. Cooperate and compete at the same time? Banish the thought. It can’t work.
The traditional view of competition and cooperation as opposites is deeply ingrained in managers. In this view, strategy is about tradeoffs – about choosing among alternatives, not about combining seemingly contradictory processes. According to various academic strategy eminences: 1. Companies can pursue a differentiation strategy or a low-cost strategy, but not both. 2. Investment decisions should always be evaluated against the benchmark of what the resources would earn in an alternative use. And as most veteran business people know from experience, though we often need to cooperate to create bigger pies, in the end, we always end up fighting over our share of the pie.
Adam Galinsky and Maurice Schweitzer challenge this traditional view in the very title of their new book: Friend & Foe: When to Cooperate, When to Compete, and How to Succeed at Both. They are not the first to do so – the seminal book Co-opetition by Adam Brandenburger and Barry Nalebuff did so in 1996, and more recent work, including my own Remix Strategy, has explored how firms can cooperate to compete using business combinations such as alliances and joint ventures. But Galinsky and Schweitzer bring to bear a wealth of new research, drawing from the exploding field of behavioral economics and social psychology. Though they address a remarkable range of business issues and offer eye-opening insights into the behaviors of CEOs, corporate negotiators, job applicants, business partners and others, this is not your average business book. Many of their examples are drawn from natural history, politics, psychology lab experiments, tabloid melodramas and sports.
Their mission is ambitious. They want the reader to stop thinking of competition vs. cooperation as “either/or” and to think “and” instead. They apply this approach to a wide range of situations; the book is not just about strategic thinking. It urges the reader to “find the right balance” in everything from how to lead, how to organize work, how to start and form relationships, how to establish trust and when to question trust, and how to negotiate. In presenting each of these situations, the authors’ exposition usually starts with the conventional wisdom, and then they provide novel interpretations and approaches. Along the way, the reader learns about social science experiments and case studies that illuminate the problem from one perspective and then the other. The lesson invariably is to balance opposing tendencies in an effort to get the best of both worlds.
Up front, the authors explain why the old approach to managerial and personal dilemmas may not suffice. First, because resources are scarce, we often do need to follow the competitive route and chose among trade-offs. But second, because humans are social beings, we also have instincts and behavior that may takes surprising turns. And, third, because the world is inherently changeable, solutions that follow one guideline at one point in time or in one situation, often turn out to be less than optimal in another. That is why it often pays to embrace the duality when faced with modern dilemmas and to strike a balance that emphasizes scarcity as well as our social nature.
An example that is central to strategy is the question of how to organize work – in a command-and-control hierarchy or in a more free-flowing, cooperative community. Galinsky and Schweitzer ask why hierarchy is popular among institutions as disparate as the Catholic Church and the Army. They cite research indicating that hierarchy is most effective if leadership has a clear and stable task ahead; in such cases, too much internal dissent is then a drawback. But in exploring new territory or generating fresh ideas, hierarchy can hurt. Under these conditions, when new decisions are needed on the fly, then coordination through cooperation rather than command is more efficient – and can even save lives, as when teams need to deal with crises on Mount Everest. Their conclusion: “For a group or organization to achieve the highest level of success, we need to learn how and when to fluctuate between more versus less hierarchy. We need to figure out what type of hierarchy will enable our team to cooperate so that it can compete effectively.”
Other dilemmas and examples are drawn from a diversity of situations; the variety of stressful situations may feel overwhelming when read at one sitting. There are examples from personal life – interviewing for a job, from negotiation – when to make the first offer, from business relationships – when to trust a partner and from product recalls – how to apologize. Read at slower pace, this range of situations is enlightening and instructive, and serves to offer specifics to complement the Zen-like philosophy that carries the book.
References
Adam M. Brandenburger and Barry J. Nalebuff, Co-opetition (New York: Currency Doubleday, 1997).
Benjamin Gomes-Casseres, Remix Strategy: The Three Laws of Business Combinations (Boston: Harvard Business Review Press, 2015).