Just last month, BMW Group, Intel and Mobileye; three leading players from the automotive, technology and machine learning sectors, announced they would be working together to help self and fully-automated driving technology become a reality by 2021.
“Highly autonomous cars and everything they connect to will require powerful and reliable electronic brains to make them smart enough to navigate traffic and avoid accidents,” said Intel CEO Brian Krzanich.
“This partnership will help us to quickly deliver on our vision to reinvent the driving experience.”
Such partnerships are becoming more and more common in the business world, as businesses look both within their own industry and across sectors to leverage on each other’s unique capabilities. Invariably, those capabilities tie to the workforce skills and knowledge in each prospective partner, giving HR departments great responsibility in the success or failure of each collaboration.
Closer to home, Stephane Michaud, Senior Director of Human Link Asia, tells HRM Asia that its parent company Mitsubishi Corporation has made it a practice to collaborate at times, but to also compete on other occasions with its sibling entities. That, he says, is the nature of a general trading company.
“A simple example is in sharing HR policy data between general trading houses in Singapore,” says Michaud.
Collaborating in hospitality
Likewise, Lim Rui Shan, Executive Director of the Restaurant Association of Singapore (RAS), says the association has witnessed a recent increase in collaborations among like-minded food and beverage (F&B) players.
“Their purpose is to tap onto each other’s strengths for a greater advantage in the market,” she explains. In particular, working together enables each partner to do more with fewer resources, including staff.
One instance of collaboration involves well-known seafood establishments Tung Lok Seafood, Palm Beach, The Seafood International, and Jumbo Seafood in Singapore. They have teamed up together to create a joint brand, Singapore Seafood Republic, located in both Singapore and Tokyo.
The quartet wanted to bring Singapore-style seafood cuisine to a larger, international audience.
Another high-profile collaboration between F&B players in Singapore occurred last year, when 22 local Indian restaurants linked up together to form two consortia. They aimed to enhance productivity levels and to also craft skills development programmes for their staff (see: boxout).
Indian Restaurants Association Singapore adviser G Shanmugam says getting so many competitors to collaborate was difficult, despite most acknowledging that it would reap benefits for them over the long term.
“The biggest challenge was getting all the restaurants together - because we are competitors - and executing the job together,” he said.
“Rather than dying, this is the best idea to keep us alive.”
RAS’ Lim says these tie-ups in the F&B industry have led to an increase in solidarity. She says there is now a “greater sense of unity” among restaurants.
Positives and negatives
What are the right conditions that encourage firms to collaborate with their competitors?
Michaud says it can make sense to enter into partnership when organisations have non-overlapping resources that could be best used in combination to compete.
“For a time and within a defined scope, it can help bridge gaps in resources or capacity to face the market more efficiently,” he elaborates.
For example, he says Mitsubishi Corporation often bids in major infrastructure projects using coalition partners, some of which may compete with his company on other projects.
“It’s about assessing the strengths and weaknesses of an organisation and their relationships, and making optimal use of them at any given point in time,” he shares. Typically, this will mean creating merged teams across the partners, often with their own spaces to collaborate and work.
Lim says F&B businesses can learn from each other and be exposed to new opportunities that wouldn’t be available if not for the collaboration.
“RAS organises many activities and regular networking sessions which allow the key staff of industry players to know more people and explore collaboration opportunities,” she states.
As with all potential company collaborations, there is a huge sticking point in the form of trade secrets; something Michaud certainly takes care around.
“Of course, there is the risk of sharing trade secrets that could reduce our competitive advantages,” he says. “Also, it could reduce competition in the market and therefore, do a disservice to business and progress.” Another possible disadvantage of collaboration is that relying on competitors for solutions may stifle the spirit of continuous improvement and innovation that is required for sustainable businesses, he adds.
Michaud stresses that Asia Link and Mitsubishi each has policies to protect their interests.
“Although we frown upon the sharing of trade secrets, we do not prevent employees from collaborating with traditional competitors, provided that proper channels of authorisation have been cleared, that it serves the interests of the company, and that it complies to applicable laws,” he explains.
Staying within the boundaries
While collaborations do reap rewards for organisations and whole industries alike, what, if any, limits are there?
Michaud says joining partners need to clearly define boundaries in terms of the scope, purpose, and length of the collaboration. Clear roles and responsibilities for each partner and their staff should also be outlined.
“These elements are not unique to partnerships between competitors but they become all the more vital to mutual success,” he explains.
“A company needs to evaluate the mid-to-long-term risks of the partnerships before signing on the dotted line.”
Lim meanwhile, says given care in the choice of partnership, the possibilities are endless.
“As long as the organisations are like-minded, and have conducted sufficient due diligence to ensure a fruitful collaboration, there are no limits as to how far they can bring their partnerships forward,” she says.
Safeguarding trade secrets
One of the biggest risks of cross-organisation collaborations is the increased chances for confidential information to end up in the wrong hands. HR departments may consider these suggestions when it comes to the protection of intellectual property and internal intelligence during a temporary partnership:
Source: Intellectual Property Office of Singapore
Indian eateries team up
In light of the tight labour market in Singapore, 22 Indian restaurants joined forces last year to create two shared preparation facilities. The mass tie-up will reduce the amount of manpower required, and also stabilise the industry workforce, leaving each partner less vulnerable to absences and turnover.
The two “central processing units” will handle the preparation of raw ingredients using “cook-chill” and “cook-freeze” methods, before delivering to participant restaurants for the final stages of meal preparation and serving.
By also incorporating new technologies and the food processing techniques, the Kitchen Solutions (for non-vegetarian restaurants) and Veg Kitchen consortia expect to save 40% and 20% in their members’ manpower costs respectively.
The participating restaurants are all members of the Indian Restaurants Association Singapore.