A start up software company is innovatively rich but financially poor. A global IT company offers its financial backing but at the cost of the start up agreeing to surrender some of its intellectual property rights. The start up, in the absence of any other viable and timely offers, feels its hand is forced and so accepts the offer.
Over the coming years the start up develops into an established 'niche' software company and its relationship with the global IT company becomes less about financial backing and more about day-to-day collaboration. As a result, each company gradually gets to know how the other likes to go about doing things, and they build up a jointly understood way of talking about and approaching tasks and projects that helps them work together effectively.
The global IT company increasingly values the creativity and innovativeness of its young and energetic partner. It also values the 'street cred' it gains with teenagers and young adults as a result of its arms-length association with a young and fashionable company.
In its turn, the young but maturing company is enjoying its growing independence and succeeding in establishing its own unique brand and identity, which it considers to be an urgent and ever more important priority.
At this stage, the need for innovation and creativity (mostly on the part of the global IT company) and the need for independence and brand creation (overwhelmingly on the part of the young 'niche' company) ensure that a collaborative approach develops between the two companies that on one hand encourages innovation but on the other safeguards organisational independence and identity.
Time goes by...
After about five years the niche company has an established but still vibrant brand which is very credible with its market and becoming increasingly international. The older global company is still benefitting significantly from the innovation and 'street cred' it gains from its association with its partner.
However, the software and IT world have moved on and new challenges and competitors have focused the minds of the leaders of both companies. They decide they need to work more closely together in certain key areas, combining and integrating their expertise and resources to develop new products and cast their net more widely in search of new markets.
The niche company is now sufficiently confident of its brand and ability to maintain its independence to allow and indeed welcome closer collaboration. This confidence is enhanced by the fact that closer joint working will be focused upon new products and new markets, not established ones. Also, in return for closer collaboration, the niche company has been able to secure agreements about future intellectual property rights that are very much in its favour. The global company is relieved that it can now look forward to key areas of its business receiving an energising injection of creativity and innovation.
A few more years go by...
Both companies are now working hand in glove. When the niche company (now more of an international market leader in several totally new areas of software) identifies an opportunity for a new product or service the older global company can swiftly get the people and resources in place to support its development and introduction to the market.
The net worth of the previously 'niche' now market leading company has steadily grown, outstripping that of its older partner, even taking into account the losses incurred by the forfeit of intellectual property rights demanded in return for financial backing.
One year goes by...
The innovations of the young market leading company are now the lifeblood of the older global company, which devotes the majority of its extensive resources, technical know-how, and well developed administrative and marketing processes to ensuring that their partner's innovations are quickly developed into products and services and effectively introduced to market.
The boards of the two companies meet for their yearly stock take. The boards congratulate each other on a long and profitable collaboration. The CEO of the younger company then makes an unexpected announcement. She says that the increasing success of her business will force her to look elsewhere for administrative, technical and marketing support that can be more easily tailored to the needs of her ever-growing and ever more successful company. That is unless, of course, her old and trusty partner is willing and able to show some flexibility and make a few changes to accommodate her needs, one of them being about aligning old, out of date agreements about intellectual property rights with those more recently put in place...
Trading with style: the four trading styles and when to use them
Trading is an integral part of collaborative working: trading knowledge and ideas, time and resources, people and their expertise, rights and royalties, power and influence; the list can go on and on...
Also, focusing upon the concept of trading reveals important insights into the various forces and dynamics that can influence partners' relationships and actions as they work with each other. Trading styles and approaches change with the ebb and flow of collaboration, so knowing the styles one is likely to encounter and how they develop or 'phase in and out of' each other is of immense value, helping avoid damaging misunderstandings between partners and assuring the effectiveness of joint decisions and actions.
Anyone collaborating with others needs to know about the characteristics and dynamics of the following four trading styles:
The coercing trade
The coercing trade is focused upon a person or group and what they are required to comply with and/or give up. The relationship dynamics of the trade are imbalanced, the coercer having high power and the coerced having low power.
A coercing style of trade can be used effectively when swift and unambiguous action is needed; epidemics, refugee crises, outbreaks of conflict, environmental disasters, etc., all present opportunities for its justified use.
The financial crisis of 2008 provides examples of the appropriate use of coercive trading. Governments offered emergency funds to banks and similar institutions but only on condition that they agreed to and implemented reforms to their rules, regulations and procedures. The threat of withholding funds, which would have left many financial institutions to fail, was enough to ensure that the deals were done.
A coercive trade is ongoing between the European Union and Greece. The financially powerful EU is offering to trade capital in return for swinging public sector cuts and reforms and, by implication, threatening to do violence to the Greek economy by withholding the funds. (This is a case where allowing something to happen is pretty much the same as making it happen,)
Given Greece's perilous financial situation, its government has no option but to agree to the trade. This is a clear example of a coercive trade being used for, arguably, the greater good of the European Union and its financial health, particularly that of the Euro Zone.
Within the business world, international pharmaceutical companies use a measure of coercive trading when, leveraging the economies of scale associated with their large multinational operations, they seek to drive down the cost of the raw materials they use in manufacturing their drug products. This use of coercion is justified because it enables pharmaceutical companies to sell 'at cost' priced drugs (e.g., vaccines and anti-malarials) to poor and developing countries. Another justification for a measure of coercion is that low supplier costs enable drug companies to increase investment in research and development, which speeds the process of finding new cures for diseases.
The collaborating trade
To find examples of collaborative trading look for collaborations focused upon objects (or people) of mutual but differing interest: IT companies collaborating with mobile phone manufacturers, where the former sees the mobile phone as a new peripheral platform for their software and the latter sees it as core to their business; health services collaborating with social services to better meet the needs of an individual, where the former sees a person to be cured and the latter sees a person to be supported in their lives; police working with a welfare group focused on the needs of abused women, where the former sees victims of crime and the latter sees vulnerable women in need of ongoing emotional and practical support.
You can also look out for less tangible things of mutual but differing interest, such as knowledge, influence, access and status: where commercial research and development companies collaborate with non-commercial university research departments, the former could see gaining knowledge as about making discoveries that will enhance profit, whilst the latter could see it as about enhancing overall human understanding; where lobbyists collaborate with social enterprises, the former could see gaining influence as about achieving close and productive relationships with key movers and shakers, whilst the latter could see it as about being able to do more to enhance people's wellbeing and quality of life; where multi-national companies collaborate with national governments, the former could see issues around gaining access as about getting to do more business, whilst the latter could see them as about maintaining the integrity of institutions and the security of borders; where political organisations work with voluntary organisations, the former could see gaining status as a means of gaining power and influence and the latter could see it as about enhancing profile and attracting additional donors.
Obviously, the differing ways of perceiving many of the things mentioned above are not mutually exclusive, the behaviours, activities, outputs, and consequences associated with them intermingling and contributing in their own unique ways to whatever a collaboration is seeking to achieve. They do this most effectively, however, when all partners not only appreciate the differing perspectives held but also develop a shared way of perceiving which enables discussion about mutual interests, supports effective action and helps progress towards goals.
An excellent example of the above occurs within complex scientific collaborations, such as Cern's Large Hadron Collider Project, where engineers and scientists with discrete and diverse specialisms, expertise and perceptions need to develop shared ways of understanding and talking about complex areas of each other's work that intersect and have an impact upon the overall progress of the project. Essentially, they create a unique language that encapsulates or 'packages up' the key things all partners need to understand and appreciate about each other's work whilst they collaborate with each other.
A business world example, one that most of us are keenly aware of when it fails to happen, is when IT firms, expert consultants and organisational managers need to work together to develop specialised software or automated systems. Again, all partners need to develop a jointly understood language that they can use to get the job done effectively: the IT firms package their complex software into easily understood descriptions and user friendly interfaces, and the expert consultants and managers do similar with their knowledge and expertise, putting them into forms that IT experts can appreciate, assimilate and manipulate.
Where the focus of a collaboration is less conducive to the creation of a jointly understood language more emphasis is put upon gaining expertise in each other's area of work, interests and way of doing things. This helps collaborators create an empathy for each other's position which can then inform decisions and actions.
For example, when police, special interest groups, community groups and charities work together it is important for each partner to become immersed in the others' worlds as much as possible. Through this immersion each partner gradually develops a feel for how their collaborators might perceive and respond to a specific situation. When the focus of a collaboration is a complex and emotive problem with shifting dynamics and consequences, such as the abuse of women and domestic violence, this sense of what other partners might think and do when presented with a specific situation can be of immense value, helping partners address issues in not only new and collaborative ways but also informed and considerate ones.
In short, to trade collaboratively partners need to gain expertise in each other's work area, special interests and way of doing things. This enables them to find out how their trading partners view and respond to those things of mutual interest. It can also help develop a jointly understood way of describing and talking about things (especially those things of mutual interest) which can be used to enhance the exchange of knowledge and ideas and the overall quality of collaborative working. Where a jointly understood language or way of describing things cannot be developed, the empathy developed by building expertise in other partners' work areas and interests, etc., can be called upon to play a more central role in informing partners' joint decisions and actions.
Where the collaborative trade is particularly effective
The collaborative trade is particularly effective where innovative solutions are required to address unique, often localised problems and it is important that, for whatever reason, the trading partners keep their integrity, both structural and moral.
One can see, for example, how keeping a clear distinction between the police and the groups they collaborate with to combat domestic violence would help reassure victims they are perceived as uniquely vulnerable people in need of help rather than just one more crime that needs to be dealt with, so encouraging them to engage more readily with the agencies offering support.
Similarly, multinational businesses and organisations seeking to address environmental and social issues in the developing world search for national, regional and, perhaps most importantly, local organisations with which to collaborate. These 'in country' organisations possess independent identities, reputations and credibility which make them trusted 'go to' and 'listened to' presences within their areas or sectors.
They also have knowledge and perspectives that can lead, when combined with the resources and expertise of international businesses and organisations, to ground breaking solutions to challenging problems.
For example, Hewlett Packard partners with entrepreneurial businesses and individuals in Kenya to ensure that ewaste (old computers, etc.) is sustainably disposed of or recycled. This has resulted in an innovative and sustainable approach that uses shipping containers not only as collection points but also as hubs of networks of local microbusinesses and individual ewaste collectors.
Another good example is the collaboration between CAFOD (an international charity) and AWARD (a regional community group in Pakistan), which encourages and helps women to start their own businesses so they can support themselves and their families. AWARD's local knowledge and experience enables an innovative, regionally focused approach that involves training and encouraging women to start up businesses that are truly sustainable, such as selling local produce and rearing local livestock. AWARD's local profile and credibility, which is further enhanced by the success of the businesses it helps to create, also enables it to have a positive impact on wider issues affecting women, such as access to education and healthcare and awareness of women's rights.
So acknowledging, valuing and exploiting the boundaries between partners (and likewise the separate identities that help maintain them) is a crucial aspect of the collaborative trading style, playing a significant role in not only generating innovative solutions but also implementing them effectively within specialised or localised contexts.
The combining trade
The combining trading style is most effective in the following circumstances: an enhanced focus upon a new area is required; the size and scope of the collaborative activity increases significantly; the collaboration begins to attract and involve additional partners and collaborators from outside the original membership.
Given this, a combinatory trading style may prove to be the next logical step from a collaborative trading position. Having explored each other's perceptions and joint areas of interest, and having created a jointly understood language and way of working together, trading partners may naturally move towards a fusion of ideas and outlooks that is mutually beneficial, utilising the best of all the partners' worlds and encouraging and enabling the exploration of new areas and opportunities.
The trading partners eventually fuse into one trading group that looks outwards, finding new people, organisations and areas with which to connect and trade.
This outward focus is the combinatory trading style's most significant. This is because it makes the style's activities more strategic, wide ranging and ambitious than that of the first two trading styles, which are arguably more tactical, localised and perhaps inward looking in their focus.
Scientific collaborations often evolve a combinatory trading style, the ever-growing complexity and entanglement of the areas researched leading to new fused focuses and new branches of science that eventually become discrete new disciplines. Biochemistry and biotechnology are well known and well established examples of this. More recent fusions of disciplines have led to synthetic biology, quantum biology and organic electronics. As these and other new disciplines continue to combine and fuse they attract and create new knowledge and skills that lead to new insights (and ever more scientific disciplines!).
Within the business world, the UK high street combination of Curry's and PC World is an obvious and relatively straightforward example of a combining trade, where both companies have complementary knowledge, skills and resources that are to the benefit of both and which enable the combined entity (in the form of combined retail outlets) to look outward toward new customers and opportunities. (However, the fact that both companies share a parent company may point to a measure of coercion having being applied to the relevant decision making.)
Closer working between health and social services has led to the creation of combined teams which can offer a seamless service to patients, benefit from cross-sector expertise and experience and, because of their increased spread of activities and connections, discover new partners to work with and new areas to work within.
This has especially been the case where health, social and other services have become associated with GP multi or 'super' practices where the increased and diverse expertise and resources available, together with the enhanced reach of GP activities, have added significantly to opportunities for discovering new partners and new areas of contribution.
The subverting trade
The subversive trading approach, just like the coercive approach, is focused on people and organisations and harvesting what they have to offer. However, rather than relying on blackmail or the threat of violence to encourage people into giving up what they have it relies on a mix of seduction and deception. It is most effectively used when an issue or problem is important and is likely to become urgent in the future.
A person or organisation using this style will make tempting offers of things that, on the face of it, are attractive and valuable to have or be part of. However, once people are seduced into accepting these offers and hooked upon the apparent benefits, they are more easily persuaded into giving up things of value in return for further benefits. What is often most valuable, i.e., a person's or organisation's independence of action, is also the most eagerly subverted.
The subversive trading approach can be likened to a virus which fools its host into believing it is beneficial to the host body but then, having gained access, proceeds to change the surrounding cells into clones of itself, subverting the host's resources and energies towards exponential and damaging viral growth rather than sustainable and beneficial healthy growth.
It could also, of course, be likened to a vaccine that similarly fools a disease, but this time to benefit rather than harm the host.
An audacious example of a subversive trade focused upon an issue that is important and likely to become urgent is the European Euro project, which seeks to encourage European nations to trade control of their national currencies in return for the acquisition of a pan-European currency promising enhanced financial security and wealth.
This promise may or may not be delivered. It is, however, virtually certain that a trade made for economic reasons will increasingly be subverted to the cause of 'ever closer (political) union' between European nations. This is because the increased power the Euro gives to European institutions, especially its central bank, can easily be transformed into the power to shape European society and culture.
The issue of 'ever closer (political) union' becomes important with the potential to become urgent when it is considered in association with the consequences of past and current conflicts within mainland Europe. Considered in this context, 'ever closer (political) union' could, for some, become a necessity for safeguarding peace within Europe.
A characteristic of the subversive trade (and also the coercive trade) is that its appropriateness is very much 'in the eye of the beholder': what one person sees as appropriate in terms of coercion or subversion may not seem so for others. Hence the passionate arguments within the European Union about the necessity for 'ever closer (political) union' and the resentment people feel when, having allowed themselves to be tempted into accepting an apparently attractive trade, they find their efforts and contributions increasingly subverted towards the achievement of unexpected and probably unwelcome agendas.
These feelings of resentment and the damaging effects they can have upon relationships between people and organisations, etc., emphasise that the coercive and subversive trading styles should be used with great care.
The key question to ask when thinking of using either of these styles is:
'How would those on the receiving end of the coercive or subversive styles of trade react if they knew the motivations for using them?
If the reactions are ones you can manage, or at the very least live with, their use may prove effective. If the reactions are ones you cannot manage or live with, then their use may prove at best ineffective and at worst terminal to your cause and relationships.
Another example of a subversive trade is one that many businesses are making with social media. Where previously businesses would have launched products or advertised their services on their own websites, many now prefer to do this using Facebook. Facebook's ease of use, the professional and consistent presentation of its pages, its worldwide following and overall attractiveness make it a very seductive tool.
However, this could eventually lead to individually branded and independent businesses becoming subverted to the Facebook cause, transforming them into unofficial franchises contributing to Facebook's ongoing social feed and appetite for personal data it can exploit.
The important issue that could become urgent here is all on the Facebook side; it needs to keep its pre-eminence as a social network and continually grow its store of personal data to ensure its long-term profitability and success and avoid gradual decline and failure.
So far, the almost 1.5 billion Facebook users seem happy to be seduced into the above trade (including the author!).
The four trading styles can develop out of and move between and through each other
From reading the above it is probably already clear that it is important to not only recognise the above trading styles and the appropriateness of their use but also realise that they develop out of and move between and through each other as relationships change, evolve and transform according to need and context.
What begins as a coercive trading style may, when circumstances, attitudes, interests and motivations permit, become more collaborative. This releases creativity and innovation from the bonds of coercion and liberates all partners, enabling each of them to play an equal and, more importantly, unique role in things.
Gradually, the creative and innovative insights and solutions stimulated by the collaborative trading style may coalesce into new areas of focus or even new, discrete activities and disciplines. These will then probably need to be supported by an enhanced, more combined and integrated collaboration and new, wider ranging expertise which can only be provided by additional collaborators.
Once established, the above combining and integrating trading style is, for good or ill (dependent upon motivations), ripe for subversion. The first sign of this will be an increasing imbalance of power and influence within the collaboration, with perhaps one of the partners achieving dominance over why, how and when things are done.
This could happen for many reasons and be either good or bad for partners and the collaboration overall dependent on context and motivations: perhaps the collaboration's activities dovetail most naturally with one particular partner's interests; perhaps a partner has connections or relationships that make them very influential; perhaps a partner has the most money and resources, or the most relevant knowledge and expertise.
Whatever the reasons, one partner can begin to dominate the now closely integrated and combined collaboration's internal market of ideas and resources. Eventually this transforms the essence and culture of the combined trading group and subverts its efforts towards the needs and purposes of the dominant partner.
Available at Amazon 'Sleeping with the Enemy - Achieving Collaborative Success' (Third Edition)
References not previously given:
Chandler, M./2011/Novartis Executive Describes the Battle Against Malaria in Africa/https://www.gsb.stanford.edu/insights/novartis-executive-describes-battle-against-malaria-Africa/August 2015
Lines, C./2014/The Less the Cost the More the Value/http://cuttingedgepartnerships.blogspot.co.uk/2014/08/the-less-cost-more-value.html/August 2015
Lines, C./2015/A deceptively Simple Approach to Collaborative Working/http://cuttingedgepartnerships.blogspot.co.uk/2015/04/a-deceptively-straightforward-approach.html/August 2015
Galison, P./1997/Image and Logic: A material Culture of Microphysics/USA/Chicago University Press
http://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&ved=0CDMQFjADahUKEwjujJ6a1_HHAhVTOdsKHZGvBl8&url=http%3A%2F%2Fwww.cardiff.ac.uk%2Fsocsi%2Fcontactsandpeople%2Fharrycollins%2Fexpertise-project%2FFOR%2520PUBLICATION%25204%2520trading%2520zone.doc&usg=AFQjCNFptss7xFoU7reU4_XjeG--LElPUA&sig2=takCaaR7HQAGmQQo35_0JA /August 2015