Magazine article New Zealand Management

Thought Leader: Collaborate & Cooperate to Grow

Magazine article New Zealand Management

Thought Leader: Collaborate & Cooperate to Grow

Article excerpt

Explaining what a cooperative is has become second nature to me during the past 12 months. Surprisingly, it seems many New Zealanders, particularly in the business world, have an antiquated view of just what these enterprises are.

A simple definition is 'an organisation owned by, and democratically operated for, the benefit of those using its services'. The earliest cooperatives appeared in Europe during the Industrial Revolution to protect the interests of less powerful members of society -- workers, consumers, farmers and producers.

And whilst these simple cooperatives are still growing in their thousands in the developing world, in more sophisticated economies like ours, cooperatives have evolved to encompass financial entities like credit unions and building societies, as well as purchasing and shared services cooperatives. This collaboration allows independent business owners to collectively enhance their purchasing power, lower costs and improve competitiveness.

Historically, businesses have focused on finding a competitive edge by developing the latest product or service enhancement. But, technology now allows us to transfer information around the globe at light speed, meaning your time as market leader is often much shorter.

So, the competitive edge may just have to be gained through other means. It sounds an oxymoron to say that collaboration can enhance your competitiveness, but I really believe it's time that SMEs, in particular, collaborated more to grow their business on a greater scale. The proliferation of SMEs in New Zealand is the perfect breeding ground for collaborative arrangements, and it doesn't necessarily require a radical transformation of your business model to officially form a cooperative.

Cooperative arrangements can be informal or formal. On an informal level, mutually beneficial collaborations really can work. It could be as simple as combining to achieve greater purchasing power, sharing resources like HR and training or market intelligence. By adopting a cooperative mentality, smaller businesses can drive their cost base down, become more cost effective and, as a result, grow their business.

To thrive, we still need to be competitive and there's obviously a fine line between cooperation and competition, but I think we can be competitive in a way that ensures we also benefit from collaboration. After all, a cooperative arrangement works on the fundamental basis of creating a win-win solution for everyone involved, which should be the driving philosophy behind all good business, especially those that are customer focused. …

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