Solving Complex Problems Requires Competitors to Collaborate
Companies produced an estimated 2.7 billion meters of denim in 2016. But those chic distressed or skinny jeans can leave a toxic trail.
Water waste, polluting processes, and labor violations plague the industry.
A possible solution: competitor collaboration. When an issue – like safety or product stewardship – matters to an entire industry, it can make sense for competitors to come together to find solutions.
Competitor collaborations bring cutthroat rivals together to share ideas and find solutions. And the results can be amazing: new technologies, shared standards, effective government policies.
In her groundbreaking research for NBS, Dr. Lori DiVito (Amsterdam University of Applied Sciences) identified different types of competitor collaborations and recipes for success.
Now, she’s applying those insights on the ground, convening the Alliance for Responsible Denim
, based in the Netherlands.
Amsterdam has emerged as an internationally renowned centre of denim expertise (AEB, 2014). It is a place where international denim brands have design centres, denim suppliers and mills have local offices and local, young brands begin. It's also the hub for sustainability innovation in the denim industry. In 2016, the Alliance for Responsible Denim brought together leading denim brands from the Amsterdam denim industry to collaborate on reducing the use of scarce and/or hazardous resources.
The Alliance has two working groups for: (1) creating common measurements and benchmarks for chemical, water and energy use in chemical processing and (2) defining buying specifications and a roadmap for using Post-Consumer Recycled Denim.
50% of competitor engagements fail. It can be hard for companies used to fighting tooth and nail to work together effectively.
Dr. DiVito offers research-based guidance to the alliance. Her top tips for companies working with competitors:
DiVito suggests having a team member focused on communication with companies in the alliance. In the Alliance, the communication leader hears brands' concerns in one-on-one conversations. He also lightens their workloads, getting needed information between meetings.
Not everyone will have the same level of engagement. DiVito notes that many Alliance members do not want to be publicly associated with ‘sustainability’ since it either increases stakeholder expectations or their customers see the products as over priced. “These brands acknowledge that there is no other solution but the sustainable one, so they are at the table,” DiVito says. “But they are not ready to openly communicate their commitment, and that’s okay.”
Companies have committed to the Alliance for three years – that’s a long time to stay committed and offer time and input. DiVito works to have valuable takeaways from every meeting: ‘ah-ha’ and insights, and tangible outputs like results of the benchmarking study or simply a visual of the water use in chemical processing. The Alliance celebrates each milestone. For example, all brands signed a pair of denim jeans at the Alliance’s kickoff (see image below).
Competitor collaboration isn’t always necessary. Yet sometimes, it’s the only way to achieve complex goals.
Is your company dealing with:
- the reduction of reputational risks that threaten the entire industry
- the advancement of new technology development
- implementation of shared standards for businesses within the industry
- effective communication to guide regulators on public policy
If so, it may be time for competitor collaboration.