Collaboration nation: Why two heads aren't nearly as good as four, or eight, or...

Forget cut-throat competition, the hot topic these days is collaboration. Whether it’s companies in shared working spaces exchanging ideas around the water cooler, entrepreneurs picking other people’s brains via crowdsourcing, Xero start-ups teaming up to get customers, or big bosses of primary producers strategising at Stanford University, working together is de rigueur.

Collaboration is a pretty overused word these days. Mulling over your idea with a colleague over coffee? Collaboration. Renting out your house through Airbnb? Collaboration. Sometimes it’s for profit. Often it’s about sharing ideas, connections, or knowledge. Or just helping out. Sounds good, right? Sit around a long table, drink coffee and draw on whiteboards. There might even be pizza. Remember, there are no bad ideas.

But what does it really mean to collaborate? Are New Zealand companies collaborative enough? And how are some of New Zealand’s most successful and innovative businesses using collaboration to help one another succeed? 

As a nation and a culture, New Zealand prides itself on being inventive and resourceful. The myth of the tinkerer in the shed with some No 8 Wire is pervasive. But do these cultural touchstones become a hindrance in a technologically advanced world?

Out of the shed

Shaun Hendy thinks they do.

Hendy (pictured below) is a physics professor working at Auckland University’s Centre for Innovation and Entrepreneurship. He’s also the founding director of Te Pūnaha Matatini, a Centre of Research Excellence focused on the study of complex systems and networks, and he co-authored Get off the Grass: Kickstarting New Zealand’s Innovation Economy with the late Sir Paul Callaghan.

He reckons to move beyond an agricultural economy, New Zealanders have to leave the shed mentality behind.


Image: Professor Shaun Hendy, University of Auckland

“We must start thinking like a city of four million people and build scale and diversity in our collaboration networks,” he says.

“We’ve got used to working on our own,” he says. “It’s part of our national myth that we can be self-sufficient and we all have a garage in which to tinker. The reality is, that’s not where great ideas come from anymore. A hundred years ago, New Zealand was very successful with that model. We were patenting more things than anyone else in the world."

"But the complexity of today’s technologies has caught up with us and individual people can no longer master everything you need to master to make something world-beating.”

Fishing together

One recent example of collaboration leading to extraordinary innovation is Precision Seafood Harvesting, a 10-year project between CRI Plant & Food Research and three major (and competing) Kiwi seafood companies: SanfordSealord  and Aotearoa Fisheries.

The $52 million partnership has produced a technology to replace fishing nets with collapsible PVC tubes with holes (think those colourful plastic tubes at kids playgrounds). Instead of trapping everything in their wake, these tubes allow undersized fish to escape, and “off-target” species (the ones the trawler isn’t wanting to take home) to be returned to the sea alive and unharmed. 

Precision Seafood Harvesting says not only is the system significantly more sustainable than nets, but it should bring in a $100 million increase in export returns.

“It’s part of our national myth that we can be self-sufficient and have a garage in which to tinker. That’s not where great ideas come from any more. Individual people can no longer master everything you need to master to make something world-beating.” -- Shaun Hendy, Auckland University

Hendy has studied patent databases around the world, looking for patterns between the number of jointly-owned patents and the total number of patents registered. He’s found that approximately 10% of companies that file patents around the world share ownership with other companies or organisations. But astonishingly, that 10% accounts for more than two-thirds of the world’s total patents. 

In New Zealand, he found only three examples of companies co-owning patents. That’s right, three. And one of those was a patent for a collaborative invention between Fonterra and a now-defunct biotechnology company, Genesis R&D Corporation.

“I’ll do it myself”

Bram Smith (pictured below) is general manager of the Kiwi Innovation Network (KiwiNet), a grouping of universities and crown research institutes collaborating to commercialise scientific research. He sees many of the same Kiwi-in-shed problems in research organisations. 

“What I hear a lot is ‘I don’t need to collaborate, I’ll do it all myself’,” he says. “But in order to keep up with what the rest of the world’s doing, it’s not a matter of inventing everything here, we need to be importing innovation from overseas, adapting it for our particular needs and then exporting our innovations back overseas to other markets. 


Image: Bram Smith, GM, KiwiNet

“We spend too much time locked in our workshops and not being inspired by what’s going on around the world, or not being inspired by what’s going on in companies in our own communities.”

Canterbury University Professor Andy Buchanan is an example of a researcher collaborating with commercial organisations to meet a community need – in this case for earthquake-resistant wooden buildings. 

Buchanan and his team are developing ways of using structural timber that can compete with concrete and steel for large span and multi-storey buildings, giving architects more options in innovative building design. 


Image: Canterbury University Professor Andy Buchanan

Buchanan’s research has been funded by $5 million of private investment from the likes of Carter Holt Harvey, Nelson Pine Industries, and others, plus another $5m in government funding. 

Buchanan has now set up the Structural Timber Innovation Company, which is looking to commercialise this research with industry partners around the world, particularly in markets like Japan and Canada, where there is lots of wood and high earthquake risk.

Mine those Kiwi networks

There’s no reason for New Zealand businesses to be battling away on their own, says Nick Houldsworth (pictured below), chief marketing officer of Vend, when easy access to our communities and companies is one of the biggest assets New Zealand has. 

“It’s a small market and people know each other and it’s pretty easy to build connections,” Houldsworth says.

“New Zealand culture lends itself well to start-ups because it’s a very flat culture, where people are generally accessible. And it’s a meritocracy – if you have a great idea, people want to hear about it, whereas in other countries there may be more hierarchy and layers to get through.” 


Image: Nick Houldsworth, chief marketing officer, Vend

“People are inspired by success,” he says. “If you get a couple of people who are doing very well in a particular sector, people want to follow suit. And they recognise that the best way to get advice is to work with others and to build on the success of others. 

“If you want to chat with Rod Drury, you can find him on Twitter and he’s generally pretty responsive.” 

If Rod Drury isn’t your man, there are other ways entrepreneurs can pick each other’s brains: two of them being crowdsourcing and shared workspaces. 

Crowdsourcing is better known as a way for start-ups to raise money, often by showing a prototype or design to prospective customers, and then asking them to pre-purchase the prospective product. 

But it’s not just money entrepreneurs are after. Increasingly, people are crowdsourcing expertise, asking strangers, often with no financial reward, to contribute their skills and knowledge to a project. 

The internet is full of examples of crowdsourced collaborations. Take Egyptian-born designer Karim Rashid,  who used his Facebook page to ask his 400,000 fans to help him design a seven-storey building in New York. As well as choosing their preferred ideas, commenters provided feedback and ideas for Rashid, some of which he incorporated into the final project.

Helped at his own game

Closer to home, Wellington entrepreneur (and game design rookie) Mark Major used crowdsourcing platforms 99designs, Reddit and Facebook to get experts to help him with design and features for his new iPhone game, Plummet Free Fall. The game has been downloaded more than 350,000 times and was number one on iTunes in four countries, including Russia.

People are also coming together in a more physical way through use of co-working spaces. Designed to give lonely start-ups the power of the group, shared spaces offer cheap infrastructure, but also a community of other people working in a similar situation. 

In a quick Google search, Idealog found almost 20 such spaces, from the well-established Icehouse incubator and BizDojo networks, to newer facilities like the Hanger in Queenstown. 

De rigueur is a cool name (The Aviary, Iron Bank, Innovation Precinct etc), a fast internet connection and (one suspects) a bit of alcohol to get the combined creative juices flowing. 

Freelance PR guy Paul Brislen, who works out of GridAKL in Auckland’s Wynyard Quarter (pictured below) says encouraging collaboration is a deliberate act. “There’s a team of people from BizDojo in the Grid every day ensuring there’s always someone talking at lunchtime, there’s always opportunities to meet new people, so everybody’s engaged and everybody’s involved.”

Export collaborations

On a bigger scale, organisations like Export NZ and New Zealand Trade and Enterprise are also actively fostering collaboration between New Zealand companies. 

The Family of Twelve consists of 12 independent New Zealand wineries focused on promoting Kiwi wine overseas. They join together organise tastings and events in key markets and to get prominent critics, sommeliers and retail buyers to visit New Zealand. 

Importantly they share not just costs and logistics, but knowledge and contacts. 

Meanwhile a strong push to get Kiwi avocado growers to “communicate and collaborate like never before” is already reaping rewards, industry body CEO Jen Scoular says. A newly-united sector has doubled sales to $135m for the 2014-15 season, and wants to double them again by 2023, she says. 

“As an industry we want to share data and knowledge and provide people in the avocado industry access to insights that will help improve decision-making and orchard productivity.”

“If you’re an exporter you are hamstringing yourself if you don’t have a rich collaboration network in New Zealand. Your competitors will, in general, be enjoying a much more collaborative environment.” -- Shaun hendy, Te Punaha Matatini

It’s a logic you can’t argue with, Hendy says.

“The smart move is to try and be more open and try and get a return from your ideas and your technologies as they go out into the world,” Hendy says. “If you’re an exporter going into offshore markets, you’re hamstringing yourself if you don’t have a rich collaboration network in New Zealand, you’re at a disadvantage against your international competitors who will, in general, be enjoying a much more collaborative and innovative environment.”

But don’t just collaborate, says Serge van Dam, a Wellington entrepreneur currently chairing three SaaS start-ups, Wipster, Montoux, and Coachseek.

Collaborate with purpose 

Extend your network, van Dam says. Build relationships.  Be interested in what others are up to and don’t be so secretive about what you’re doing, he says. Trust other researchers, inventors, entrepreneurs and companies. Business and innovation aren’t zero sum games. 

“There’s an emotional impetus to working together because we want to see New Zealand perform on a global stage and there’s this almost natural, circumstantial advantage that we can draw on,” van Dam says.

“We’ve just all got to be willing to not just use loose terms like collaboration, but be very specific about how we can help each other. Whether it’s introducing people via email, or giving access to a contact list or sharing experiences to make other people smarter, I think we’ve got a real opportunity to make each other better. The world’s an enormous marketplace and a rising tide lifts all boats. If everyone gets smarter, we all benefit.” 

World-beating

So if collaboration is vital in an innovation economy, how can it work for you, in your company, in your industry? We look at three New Zealand examples where collaboration is providing significant benefits for all the players concerned.

Software as a service

Software as a service is a perfect breeding ground for collaboration. There’s the background of the internet to start with – that open source nirvana of geeks saving the world. Then there’s the fact many Saas companies are born from the desire to solve a single problem, which may have once been one small aspect of a comprehensive (and expensive) software suite. 

“By solving a single pain point you can make a much better product, much faster,” explains Nick Houldsworth, chief marketing officer of cloud-based point of sale software service company Vend. “But customers still need different systems to be connected together.”

Vend is one of over 400 service providers integrated on the Xero accounting software platform. Xero CEO Rod Drury (pictured) says that by opening his system to other app developers, Xero doesn’t lose sovereignty. Instead other companies add functionality to his products. 


Image: Xero CEO Rod Drury

“Anything that can be automated will be automated,” he says. 

And while the level of collaboration varies greatly between those 400 providers, Xero actively works with start-ups to increase the value of the system as a whole, and to foster talent in the ecosystem, Drury says. 

“We love having companies camp out in our offices and taking advantage in the investment we’ve made in them.”

Vend started as one of those companies, realising quickly that by collaborating with an existing service provider, they could concentrate on solving a specific problem while also having access to Xero’s growing customers base. 

“So there was a pretty compelling reason for us to collaborate, both from creating a unique proposition for the market, but also achieving a new channel to market for ourselves,” says Houldsworth. 

“We were finding new retailers and they were finding new accountants and we knew that if we could combine forces we could find new customers together.”

But the two companies don’t just collaborate vertically. They also collaborate horizontally, sharing practical knowledge and market insights. 

“We’re always happy to share information because we’ve had the benefit of learning from others as well. We also get to learn things in reverse, even if the company is smaller than us. They’re often trying new tactics we aren’t thinking about.” -- Nick Houldsworth, Vend

“In those early stages it’s really helpful to have a collaborative working relationship not just to find new customers but to just get better at your craft,”  Houldsworth says. “Because you’re effectively trying to sell a similar product at a similar price point to a similar audience, and in a lot of ways are trying to figure it out as you go along.

“So the more you can share ideas, the better equipped you’re going to be tackling some of those problems.”

And as Xero helped mentor Vend, Vend is helping younger companies which are providing ancillary services on its own platform. 

“We’re always happy to share information because we’ve had the benefit of learning from others as well,” Houldsworth says. 

“We also get to learn things in reverse, even if the company is smaller than us. They’re often trying new tactics that we’re not thinking about.”

Earlier this year Xero and Vend were selected to help Apple develop and promote the business capabilities of the iPad. One of the biggest companies in the world collaborating with two companies started half a world away. 

Apple doesn’t want to have to build its own Xero or Vend; it wants to make its iPad better by helping make Xero and Vend better.

Primary collaboration

It’s not just cloud-based software that’s proving fertile ground for collaboration. 

A group of New Zealand’s primary industry leaders decided to look to Silicon Valley to learn how to collaborate and better adapt to a volatile commodities sector.

In 2012, John Brackenridge, CEO of Merino New Zealand, and Keith Cooper, CEO of meat company Silver Fern Farms, visited Professor Baba Shiv, an expert in marketing and “neuroeconomics”, at Stanford University in Stanford, California. 

While there, Brackenridge and Cooper realised that many primary sector CEOs didn’t even know each other, let alone work together. The two started inviting primary sector leaders for a week-long annual boot camp at Stanford, where alongside university professors and Silicon Valley leaders, they talk and think about how New Zealand’s primary industries can shift from being commodity producers to generating more value through better understanding the changing consumer behaviours.

Since 2012, the boot camp has grown to 50 participants, including CEOs and senior managers from Zespri, Sealord, Fonterra, and others, hosting a diverse range of speakers from American designer William McDonough to former US Secretary of State, Condoleezza Rice.

“In Italy, the companies which have survived, the ones which have prospered, are the ones that have collaborated, even with their arch enemies, as long as they are in the same philosophical space.” -- John Brackenridge, Merino NZ

 As well as being inspired by the speakers and the Silicon Valley ecosystem, Brackenridge says by nurturing relationships and establishing trust, primary industry leaders have begun working together to help each other in overseas markets.

The most prominent practical outcome of the boot camp is Primary Collaboration, a geographic grouping set up by Andy Borland, managing director of Scales Corporation, helping New Zealand primary industries access Chinese markets. The collaboration includes fishing company Sealord, Silver Fern Farms meat, Synlait Milk, Villa Maria Estate winery, Maori food and beverage producer Kono, and Pacific Pace, itself a collaboration between three Hawkes Bay apple-based companies Mr Apple, CrasbornGroup and J M Bostock Group

Brackenridge is excited about the project.

“You’ve got New Zealand’s biggest apple producer, New Zealand’s biggest seafood company, New Zealand’s biggest meat company and one of the biggest wine companies all saying, ‘Rather than going into Shanghai in a silo, why not go in collectively and share insights, share resources, learn from each other?”

After this year’s boot camp, Brackenridge travelled to Italy, where the economy has had to radically transform, after losing much of its manufacturing business to China. Brackenridge sees Italy, where collaboration has become a necessary part of success, as a model for New Zealand’s primary industries.

“The companies that have survived, the ones that have prospered, are the ones that have collaborated, even with their arch enemies, as long as they’re in the same philosophical space,” he says. “We need be able to collaborate with somebody who’s getting market insights and knowing when to collaborate and when to compete.” 

Collaboration is a process not an outcome, Brackenridge says. “The outcome is greater value, greater consistency, less volatility, as a consequence of us being far more sophisticated in our value chains and our branding, and therefore less dependent upon commodities. 

“And the way to do that is through better investment in talent, better awareness of digital, and the utilisation of a far more collaborative approach to market.”

Public / private collaboration

The Kiwi Innovation Network (KiwiNet) was launched in 2011 as a grouping of university and Crown Research Institutes.  It now includes 15 partners which represent 6000 New Zealand researchers (67% of the total). Its aim is to get scientists and businesses working together.

KiwiNet general manager Bram Smith, says getting collaboration happening is all about establishing trust, and the only way to establish trust is through relationships: 

“When we first set up we were really worried about confidentiality, so we had quite complex arrangements around making sure that if somebody disclosed information, it wasn’t shared or didn’t blow any competitive advantage. “But what happened was over time, that really started to break down. People started to build trust and pursue confidentiality and nondisclosure agreements only when it was really necessary.” 

A key part of getting that sort of trust is encouraging people to form personal relationships, he says. “Organisations don’t collaborate, people do. So you’ve got to enable people to form personal relationships and get to know each other. You can’t just force people together and expect them to collaborate.”

In June this year, KiwiNet held the inaugural NZ Mathematics in Industry conference, where six companies paid $6,000 each to have 100 of the country’s top mathematicians take on their real world mathematics problems – together. 

“It’s great for the business because they get really sharp minds working on their opportunities,” says Smith. “It’s great for the mathematicians because they get good experience of the kinds of problems businesses have and how to solve them. And it creates a really good culture of getting people collaborating together from across multiple organisations to pursue innovation opportunities and solve technical challenges.”

In less than a week, some problems were solved, or well on the way, and some mathematicians were offered contracts to continue their work. 

“We see researchers who could do so much more for companies around them if they could get out and talk to them, if they could immerse themselves in what those companies are dealing with,” Smith says. 

“And we see so much more that companies could do if they had more capacity to engage with the science community. A lot of what KiwiNet does is just get people together in the same room so they can get to know each other and form relationships.” ⋅


Three shades of collaboration


Image: Serge van Dam

“Collaboration’s a catchphrase,” says Wellington entrepreneur Serge van Dam. “I hate the word personally because it’s ill-defined and not meaningful.” 

Idealog would pretty much agree. With modern parlance, it’s sometimes hard to separate the sharing economy from the collaborative economy; crowdsourcing from being paid to lend your car to the guy down the road (surely not collaboration, but just another form of one-on-one transaction). 

We asked van Dam to break it down more. He says there are three types of meaningful collaboration: vertical, horizontal and geographic.

Vertical: Collaboration between companies in the same industry selling to the same parties – often called ‘clustering’. Companies share resources, information and contacts for their mutual benefit. This can be particularly useful when one company can leverage its good reputation to the mutual advantage of other companies.

Horizontal: Collaboration between companies with similar functions that don’t necessarily sell to the same people. Horizontal collaboration is more about sharing skills rather than contacts. 

“There’s a lot we can learn from each other, so the benefit is in intellectual property, not in escalating sales,” van Dam says. “We don’t help any individual sell more, we just help everyone be better at their jobs.” 

Geographic: Collaboration between companies in the same territories, even if they are participating in different markets. Geographical collaboration is “one of the best things you can do for moral support and logistical support, helping people establish themselves in a market and giving them cultural guidance. It helps but it doesn’t necessarily move the needle.”


The good and the bad

Apple

Apple is great at collaboration – there are dozens of partnerships behind each i-product. I mean the company even collaborates with Microsoft. The latest gossip is around talks between Apple and BMW. The iCar?

Coca-Cola

As part of a $US150m+ move to develop plastic bottles made 100% from plant-based materials, Coke formed a research collaboration with Heinz, Ford, Seaworld and others to support development of renewable feedstocks. The first PlantBottles were unveiled at World Expo in Milan in June.

Toyota-General Motors

Nummi was a GM-Toyota JV car plant opened in 1984. The collaboration gave Toyota the foothold it wanted in the US; GM gained experience of Japanese manufacturing practices. The experiment was initially successful, but the plant was sold in 2010 and the collaboration was never repeated.

Boeing

One of the oft-quoted reasons for Boeing being forced to ground its entire 787 Dreamliner fleet after a string of incidents, including fires, is mismanaged collaboration between the company and its many partners.


Making it work – the experts

Three's a crowd

Triangular collaboration is increasingly common, particularly in the tech sector (Microsoft-Intel-Cisco, for example). But a three-way partnership brings an exponential increase in potential headaches, according to Professor of Entrepreneurship Jason Davis

Last resort collaboration

Canadian corporate collaboration expert Ann Svendsen warns against the "collaboration when all else fails" approach. Companies unable to solve a problem unilaterally sometimes reluctantly seek a partner, she says, but that's a bad start. 

Sweat the big stuff

A long-term view, rather than a focus on short term objectives, problems or failures can often make the difference between sturdy and shaky collaborations, Davis says – and that may make all the difference when it comes to innovation.

Rotate the leadership

Davis's study found successful collaborations rotated control of the project back and forth between the two partners.  Rotating the leadership worked better than either one company dominating throughout, or a consensus-based approach. 


Making it work – the soft stuff

Up close and personal

An Economist  Intelligence Unit (EIU) survey suggests face-to-face collaborations are most likely to be successful. Meeting the people you are working with catalyses the relationship – particularly early on. Rely on virtual stuff later. 

Trust each other – a bit

Major obstacles to collaboration include culture clash, divergent strategic interests and fear of IP poaching. No wonder trust is important. But it isn't critical. The EIU report found very few collaborators totally trust their counterparts. Doesn't seem to matter. The report said most collaborators expect and forgive lapses in judgement, and colaborations without trust can still be successful.          

Keep it civil

Play nice in the sandpit. Always be courteous (ABC), and turn off the sarcasm channel.

Celebrate

Celebrating successes, big and small, becomes more important the more people you have involved in a project, because that's a way to keep motivation high. Experts suggest people are often more incentivised by a celebration than by a few extra dollars.


Collaboration in the chocolate factory

One of the most publicly collaborative brands in New Zealand right now is Whittaker’s, who over the last two years has collaborated with a number of other New Zealand companies, sometimes causing voracious social media buzz and unprecedented consumer demand.

“It’s about developing Whittaker’s into other indulgent areas,” says chief marketing officer Philip Poole. “Through the collaborations, we can innovate together. L&P, hundreds and thousands, Jelly Tip, Lewis Road are all very innovative and exciting products, so if you get the collaboration right, one plus one is bigger than two.”

For Whittaker’s, the collaborative process started internally, searching for ways the company could innovate both its product and its marketing. Then it expanded outside. 

Poole says companies looking to collaborate on products “have to be very careful in terms of the brand fit, and ensuring the partner has the same ambitions and motivations in producing a quality product.”

After the first few collaboration successes, working alongside other brands has become part of the Whittaker’s brand, Poole says, and now when a new collaborative product is launched, customers immediately start speculating about what will come next. 

When the Jelly Tip chocolate, a collaboration with Tip Top, was released in June this year, #whittakersnewflavours started bouncing around Twitter. 

Whittaker’s now receives a steady flow of pitches for collaborative products, but is careful about who to partner with. 

“Having done a number, there’s a certain expectation of what are we going to next,” he says, “but we wouldn’t do anything for the sake of doing it. Collaboration is part of the brand strategy, but collaboration has to be adding to the wealth of the brand. It has to meet the criteria. We would never do a collaboration just for the sake of doing it.”