Avoiding the resource curse through investing: A crash course on sovereign wealth funds at home and abroadRead More ›
Collaborating for the Competitive Advantage in the Market of Social Innovation
Despite being worshiped as a valuable trait, collaboration in the social sector is still an illusion created by regular get-togethers. The costs of collaboration, fundamental distrust, and structural boundaries weigh against meaningful dialogues and collective actions.
“Collaboration is the New Competition”, Ben Hecht, the President and CEO of Living Cities, says in his Harvard Business Review blog. Especially in the field of social businesses, cooperation and collaboration have been credited ethos for solving complex social problems. In my capacity as a research fellow at Surge, I have the privilege to interface with different social organizations, catalyst intermediaries, funders, academics and the government in Taiwan. What I observe, however, is that trans-disciplinary and cross- sector partnerships do not occur more naturally in the social sector.
Why not collaborate?
Costs: Collaboration is costly: participating parties need to invest significant time, money and other resources to have continuous communications and to build trust. There are also opportunity costs associated with not using resources directly on the projects or staff within the organization. During our recent revisit to a government-sponsored think tank in Taiwan, its research project on social enterprise legislation was halted due to the budget cut. It was only half a year ago when this think tank was discussing in enthusiasm with us regarding collaborative research. And even then, their interactions with local practitioners or other relevant government departments were extremely limited.
Parochialism: Most social organizations in Taiwan are clustered in a few industries, such as employment of marginalized population and organic food. Although sharing similar social missions, these organizations are in challenging positions to compete for funds, resources, and clients. In fact, inter-organizational relationships in the social sector still privilege market-driven behaviours. Monopoly of information, customer retainment, and loyalty to commissioners’ expectations…behaviours that can be considered as strategic moves in purely private market can be very hurtful to social businesses, causing them to drift from serving the beneficiary.
Risk and Distrust: Similarly, competitive relationships determine the fundamental distrust between different parties. Although sharing information on service beneficiaries and funding sources can result in mutual growth and learning, such behaviour involves the risk of exposing an organization’s weakness to its competitors.
Structural boundaries & Inertia: Except for the collaborative difficulty for those social organizations in a broad sense, cognitive boundaries in terms of profession and culture prevail among other important stakeholders including investors, government agencies, social innovation incubators, and scholars. The inertia of these players to improve knowledge exchange or agreement transaction cries for third-party mediation, facilitation and brokering.
Roles of Collaboration Brokers
New Norms of Collaboration: Some social problems are well defined and solutions are technical enough to be solved by one or a few organizations. And yet in most cases, no single organization can adequately respond to big- scale problems; effective solutions need to engage multiple entities. Taiwan is not short of cheerleaders for collective impact, but it is short of a systematic paradigm to coordinate and allocate necessary resources for collaboration. Collaboration brokers can intervene by scoping partnership, maintaining engagement, reviewing procedures, and sustaining outcomes. More importantly, brokering in the social sector can commit all parties to tracking, evaluating and refining performance over an entire continuum. This will lead to the observance of new norms of creating competitive advantage through collective data-informed learning and decision- making.
Mitigate the Transaction Costs of Collaboration: Collaboration brokers can take advantage of their position as the mutually trusted party in a structure of relationships for “boundary spanning” – facilitating transactions of knowledge, information, and resources between groups that previously have no basis of trust or have cognitive distance between each other. All parties gain efficiency, because not only brokers mediate and coordinate information flow, but they are capable of liaising with “unlinked” groups, communicating and translating differences, and synthesizing perspectives.
Achieving Economies of Scale: Bounded by their sizes, social organizations in Taiwan often have difficulties of bringing their initiatives to scale, while funder or investors pin their hope on the most effective solutions and centralize resources on those they think can grow their impact more widely. Small organizations do not have the capacity to develop internal economies of scale, or leverage external preferential treatment. Collaboration brokers, however, can band together small players in the interconnected value chain and create cluster effect both geographically and virtually.
In today’s business world, the “flying solo” strategy makes less and less sense. This is even so in the field of social business. And yet, collaboration is not as intuitive; it takes time, money, imagination and creativity. Efficient, credible and value-added management of trans-boundary partnerships demands a new type of profession – collaboration brokers. Effective brokering will enhance learning-driven practice and stimulate innovations in strategy. It is not about seeking consensus, but breaking through the tenacity of conventional boundaries. So if you think your organization is not functioning at your optimum capacity alone, let’s talk how we can do things differently together.
Editor’s Note: This piece is featured on SocialFinance.ca thanks to our ongoing content partnership with SURGE Taiwan. Visit their site to check out more of their work or read their quarterly newsletters here!