Internal Co-opetition & Value Networks

Co-opetition - an ugly word formed by splicing "competition" & "cooperation" - refers to organisations that compete in some markets & cooperate in others. Like the TV serial cliche (usually hit upon late in the second season or early in the third) where sworn foes must collaborate against a common enemy or face extinction. Unlike TV serials (where both sides are at each other hammer & tongs again at the end of 60 minutes - although with an extra frisson of sexual tension) such relationships may go on on for years.

Obviously the bigger the footprint of your corporation, the more likely you are to hit on co-opetition. IBM operates in the hardware, software & IT services markets and both cooperates & competes with the likes of Accenture, Oracle, etc. In fact the IT industry is similar to your standard high-voltage TV soap* in terms on bed-hopping & revenge plotting. But even the evil twins in daytime soaps have better personalities than half the IT industry (and yes, of course you, dear reader, are obviously in the better half - any visitor here demonstrates taste & style).

One observation I would make is that most people assume co-opetition occurs outside the enterprise, that corporations are bounded entites. In fact co-opetition is alive & well inside most organisations. But surely business units must cooperate to grow & survive I hear you say, why would they waste time on internicine warfare? Well for two reasons:
- Resources within firms are limited. And "Limited" may mean only "billions of dollars" but trust me, factories, fancy advertising, IT systems and oodles & oodles of people can't be bought with Monopoly money. Business units compete for captial & investment.
- Business units may well be closer to their partners outside the business and other groups within their own enterprise. After all, these people might literally be buying them lunch rather than just metaphorically. Have you ever enjoyed a metaphorical lunch more than a real one?

Canny executives will move managers between business units in a bid to stem the latter problem but usually undo these efforts with siloed measurement systems that focus on individual product sales rather than total returns from a customer or territory. If you are being paid to work with your new friends and screw your old ones then many people find a way to live with the cessation of christmas cards and BBQ invites.

Most organisations find some sort of compromise to deal with this. More people are moved, cross-LOB teams are formed, measurement systems are tweaked and heads are knocked together (though some might be rolled).

A useful tool you could use for analysing this situation are value networks. Only rather than dealing at the corporate level, focus on roles that explore units with both your organisation & your partners. Now if someone has already done that, I would love to hear about it.

*Back to TV again, don't go to business school - 2 years siting in front the box with "The Bold & The Beautiful" on repeat is easily equivalent to an MBA. End up as obese as the average middle manager for a mere fraction of the cost!