Industry looks to 'co-opetition' for strategic sales

Internet Strategies for Education Markets: The Heller Report, Nov, 2002

There's an old saying: keep your friends close, but your enemies closer. But keeping a watchful eye on the competition has morphed into extending a wary handshake to competitors in many cases, as companies look for new ways to cooperate in order to make large, complicated business deals. The term 'co-opetition' is literally a combination of the terms cooperation and competition, and it applies to companies who work together on strategic projects, while going head to head in other areas.

The term has been credited to a number of people, including Ray Noorda, the founder of Novell, and Sam Albert of Sam Albert Associates (Scarsdale, NY) a consulting firm that specializes in developing strategic corporate relationships. Albert says he coined the term in the Wall Street Journal back in 1990 -- regardless, the theory was first laid out in full in the 1996 book Co-Opetition: 1. a Revolutionary Mindset That Redefines Competition and Cooperation; 2. the Game Theory Strategy That '2 Changing the Game of Business, by Adam Brandenburger and Barry Nalebuff. Whatever its beginnings, more than a decade later, the co-opetition concept is finally beginning to get some traction in the education business, according to Albert.

"People are starting to understand that managing these relationships are certainly as important as the technology or educational subject matter," Albert notes. "Underlying this is the fact that no one entity can do it all."

Brandenburger and Nalebuff explain that the key is looking at business as a game, and that once you do, ifs easier to spot both cooperative and competitive pieces of the puzzle. Once you've analyzed what's happening around you, some simple concepts from game theory will guide which steps can be taken to improve the outcomes.

Is real co-opetition possible in the educational technology and telecommunications space? It depends on whom you ask. According to John Super, vice president of Strategy and Business Development at PLATO Learning, what with data management, integration of products and services, and accountability and assessment requirements, nobody has all the pieces anymore. Simply to fill the needs of customers, companies will have to find ways in which to work more strategically together.

But Jim Behnke, president, Addison Wesley/Benjamin, says he doesn't buy it. Behnke has spent 27 years in publishing, both at small independents and larger firms. He says the mega-corporation Pearson now owns Addison-Wesley, and it has an interesting model of internal competition that can get really fierce -- though obviously everyone is playing on the same team, and thus 'co-operating'. But Behnke believes that externally, corporate giants such as Pearson will simply buy up the competition, rather than work out deals. "Industry consolidation makes co-opetition with true competitors at Pearson's level almost impossible to imagine," Behnke argues.

Whether you go along with Super's or Behnke's way of thinking on co-opetition, it's critical to remember that making the deal is only the first step, says Albert. "It's not rocket science to imagine the relationships between companies," he claims. "It is rocket science to manage these relationships."

Contact: Email: samalbert@samalbert.com, 914-723-8296