MT Masterclass - Co-opetition

What is it? Does business have to be a zero-sum game? Is there only death or glory, or can we compete in some areas while co-operating with rivals in others? Co-opetition stems from the idea that fight-to-the-death competition is inefficient. Competitor firms can pool resources, share ideas and have non-aggression pacts where it makes sense (and is legal). Don't worry that it's an ugly neologism, absent from Microsoft's spell-checker. Co-opetition calls for a new way of thinking altogether.

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Last Updated: 09 Oct 2013

Where did it come from? The founder of software house Novell, Ray Noorda, is usually credited with coining the term, which became much better known after the 1996 publication of Adam Brandenburger and Barry Nalebuff's book on the subject. (Brandenburger is a Harvard man, while Nalebuff teaches at Yale - schools that both compete and co-operate.) Their inspiration came from game theory - 'maths plus a dash of psychology' - the discipline of building a strategy based on your strengths and objectives in relation to your understanding of what competitors will do. Think Russell Crowe in A Beautiful Mind, but with less fighting.

Where is it going? To some people, co-opetition sounds terribly new economy and touchy-feely. Surely in business it's kill or be killed? The term does betray its 1990s roots and has been favoured most by high-tech firms that have benefited from collaboration (open-source software is a giant exercise in co-opetition). And yet the latest thinking on effective team working argues that internal competition, at least, is dead. Smart firms analyse their social networks to exploit tacit knowledge. In the outside world, successful competitors help markets grow and build customer awareness. So don't rule out a spot of judicious co-opetition just yet.

Fad quotient (out of 10) Six and steady.

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