The greatest change in the way business is being conducted is the accelerating growth of relationships based not on ownership but on partnership. (Peter Drucker, Collaborative Commerce Summit, June 2001)
Some 19 years on Drucker’s words have never seemed more relevant. We know that a full blown merger is not going to be right for everyone, nor is it likely to be your first choice. There are of course other close collaboration options that can deliver benefits in their own right and might also be possible stepping-stones towards merger at a later date.
A strategic collaboration offers:
- Increased access to resources
- Faster growth
- Reduction in competition for resources
- Development of new capabilities within each of the partners
- Shared risk
- More opportunity for innovation
- …and to put it bluntly, survival, where the partners may be struggling individually
Some of the challenges of this approach are:
- Partners may not have the capability or skills at the level they have promised
- Partners may fail to commit resources and capabilities to the partnership
- There may be an unequal commitment of resources
- Partners may not to use their complementary resources as effectively as hoped
- Hidden agendas
- Making collaborations work at this level requires a lot of upfront effort but the benefits, considerable though they can be, take time to come through. Sometimes people are impatient for results or too quick to give up.
Strategic collaboration options (based on two organisations collaborating)
A strategic collaboration can take several forms:
- Two or more organisations create a separate entity that combines elements from each (sometimes known as a joint venture). This could be made up of an equal contribution of resources from each, or one partner may invest more than the other. For example, Theatre A may have a large and experienced learning and participation team and Gallery B might have a strong digital arts team. Combining these resources could allow both to develop a great independent digital learning offer, combing the capacity and capabilities of both.
- One organisation invests in the other with a clear contractual relationship that sets out expected return on investment, it effectively buys a proportion of the organisation being invested in. This may be more likely to be a cross sector collaboration where a university, local authority or private sector organisation invests in a specific offer
- Two or more organisations work together and pool resources. This is most likely to be formalised by some kind of contractual arrangement. Some of the Creative People and Places consortia work on this basis. This is also the option where organisations might look at a shared back office function. This approach has been used by one theatre group to establish a separate management body
In each of these instances the partner could be from within or outside the arts and cultural sector dependent on the aims of the collaboration. KPMG research suggests three success factors for collaborative alliances:
- Clear and understood purpose
- A detailed business case and model
- Flexible operating model that supports the business model
However, with collective working as much attention needs to be paid to behaviours and culture, as agreements and planning. Jonathan Hughes and Jeff Weiss suggest a useful set of principles that contrast what may be regarded as conventional wisdom with those factors that really matter.
| Placing less emphasis on… | …and more emphasis on |
| Defining the right business arrangement | Developing the right working relationship |
| Creating ends metrics | Creating means metrics |
| Eliminating differences | Embracing differences |
| Establishing formal alliance managements systems and structures | Enabling collaborative behaviour |
| Managing the external relationship with partners | Managing your own internal stakeholders |
This echoes the findings of pretty much all the collaboration research and evaluation we have done. In our experience a lot of time is spent on the nuts and bolts of agreements with limited focus on process. Some questions you might consider if you are thinking about collaborating at this level are:
- How do you perceive your organisation – what are your characteristics?
- How do you perceive your potential collaborator?
- How do they perceive you?
- What can your collaboration offer others (beneficiaries, stakeholders, customers etc)? (often the attention is internal i.e. what you gain from each other rather than external – what our combine resources offer others)
- What problem does this collaboration solve?
- Would this relationship make sense to stakeholders?
- Would your relationship be exclusive?
Many arts and cultural organisations are already involved in partnerships at an informal level. Now might be the time to consider developing this approach further.
Dawn & Susan