Particularly in light of the current climate, and given that 2020 is well on its way to being a year that may ‘live in infamy’, the recent news of the Big Four accounting firms’ collaborative efforts to collectively develop a framework for environmental, social and governance standards is refreshing to say the least. If the initiative is indeed successful, (or even if it is not), this still serves as an example that even direct competitors may work together to seek to achieve a common goal.
Historically, the joint-venture market has shown us that, when opportunities present themselves, corporations in direct competition do assist one another, even when in the midst of historic litigious proceedings (e.g. did you know Samsung supplies mobile display screens to Apple?). Contrary to most of our traditional commercial intuitions, where we automatically refrain from fraternising with our business competitors, the reality is that there are various important and fundamental tangible benefits to be gained from pursuing a mutually beneficial symbiotic relationship with those who we may be seen to be in competition with, whether for the greater good or otherwise, and which can include:
(i) diversifying risk and costs associated with developing new products and technologies;
(ii) collaborating research to enter new marketplaces, or seek to overcome similar challenges in current markets;
(iii) improved time-efficiency, and identifying synergies capable of complimenting each other by optimising one another’s resources; and
(iv) if nothing more, having the opportunity to objectively and mutually acquire knowledge on how to improve internally and set higher benchmarks of performance within our own organisation through comprehensive analysis and a comparative assessment.
With the above in mind, it’s not to say that we should all fall victim and become naïve and gullible to the fact that competitors may be equally forthcoming or reciprocal to the idea of mutual co-opetition. Nevertheless, if the Big Four can do it, then the phrase ‘keep your friends close, but your enemies closer’ may seemingly ring truer than ever. As they say, two heads (or in this case, Four) are better than one, especially where the status-quo of the commercial landscape is subject to changes from a plethora of external pressures of the likes of Covid-19 and Brexit.
Thus, it would be prudent to keep in mind, whether by joint-venture or otherwise, the concept of ‘co-opetition’ (meaning: the collaboration between business competitors) in the hope of mutually beneficial result.
The leaders of the Big Four accounting firms have come together in an unusual joint initiative to unveil a reporting framework for environmental, social and governance standards.