Skillful collaboration with partners is increasingly important in all business. Only a couple of decades ago, companies rose and fell mainly of their own devices. Today, the winner is often the one who manages to find the best allies.

“Networking is extremely important for our operations. There are a lot of things that are easier to accomplish together than alone,” summarizes Kaj Jansson, Vice President of Common Chemistry in Kemira Research & Development.

It is not just about a group being stronger and faster than an individual. At least equally important is the fact that several pairs of eyes see more than one. Different manufacturing-related subcontracting agreements have been part of companies’ operations for decades, but expanding collaboration from production to product development is one of the great changes that has taken place in business in recent years.

“Nowadays, the goal of most networks is to create innovate and not just make things. This is where the possibilities created by networks are enormous,” says Professor Yves Doz at Insead, one of the world’s leading business schools and research institutions, located in France.

Collaboration opens the mind

Each company generates its own culture of looking at and thinking about things. Likewise, different areas of business have their own customs that are hard to break even if there were good reasons to do so. Rigid ways of thinking and traditions may prevent us from seeing opportunities right in front of us. Networking opens new sceneries.

In a functioning model, a partner brings new ideas to the table and this might lead to surprising solutions. ”Networks break set ways of thinking when competence is combined in a new way,” says Professor Doz.

New ideas are created, for example, when Kemira, a chemicals supplier and an equipment manufacturer combine their strengths. Companies engaged in different operations may have synergistic know-how. The difference is not just about technology. These companies also know their clients from different perspectives. Both may do business with the same company, but their representatives discuss different topics with the client.

“Integrating these discussions may help develop completely new solutions for the client’s needs,” says Jansson.

International networks bring numerous benefits

When a network has players from different countries, all parties gain a variety of advantages. Sometimes an advantage may come from the very different ways countries look at and respond to things. Those differences may create new solutions in customer service, technology, and company management.

Sometimes the varied operating conditions partners work in may create advantages. For example, Kemira’s products are used in many parts of the world in very differing environments. “Among other things, environmental challenges, drought and water quality differ a great deal. Those kind of differences have a huge impact on our business operations,” says Jansson.

That is why it is very important for Kemira to find partners in both research and distribution that know the local conditions best.

Collaboration must be learned

In a networking model, companies must grasp that developing collaboration is as important as developing the company itself. Unsuccessful collaboration creates even more expenses than benefits. For that reason, one must work for the partnership, just as one would for relationships. One must understand the goals of the other party and have the ability to be flexible when needed.

The partners must have a common goal for the collaboration right from the outset. In a successful collaboration, the partners seek benefits for all parties and not just for themselves. In practice, this is reflected in making agreements as well.

“Previously, the starting point was to allow a partner to sell the new innovation only with the other party’s consent. Today, both parties are generally allowed to run with the innovation. We avoid building obstacles and instead, strive to hit the market as quickly as possible,” Kaj Jansson says.

A common goal could, for example, be a new customer solution or combining strengths in a new market area. Nevertheless, the final objective always is increasing profits. One should not set goals that are too detailed since they may restrict innovation.

Multicultural advantages and challenges

Professor Yves Doz also stresses that international networks provide enormous benefits for innovation. ”However, at the same time a different language, culture and way of thinking may cause surprises. That is why the success of networks is highly dependent on how skilled we are in making use of their multicultural aspects,” says Doz.

Cultural differences are not caused by different nationalities only. Among other things, the companies’ line of business, history and size significantly affect its ways of operating.

The worst mistake is to believe in the superiority of one’s own culture and to try to force it on others. Sometimes companies try to deny the existence of cultural differences and attempt to agree on a so-called common culture. The reason for this may be that dealing with cultural differences feels awkward. However, by denying differences we lose the benefits that we are seeking by looking for partners that possess different kinds of competence.

“Cultural differences add color to life. When you know how to adapt to them, you get the most benefits out of them,” Jansson says.

Text: Risto Pennanen
Read the full article in Kemira’s stakeholder magazine Waterlink 3/2009