Collaboration for resilience
Shaping coalitions

The pandemic crisis is far from over. We don’t even know if we have seen the worst or if the worst is yet to come. The best thing a company can do right now is trying to become as resilient as possible to be able to deal with the worst and what might be ‘the new normal’. 

 

In our opinion, to become resilient means to be advancing despite adversity. To have the courage to reimagine a stronger future, to become creative and make bold decisions. To be able to do this properly, organizations first must deliberately address the vulnerabilities the crisis has exposed. However, due to the fact that the impact of the pandemic is still very unpredictable, most companies do not have the time or resources to completely change their business models.

 

The good news is that a changing environment comes with hidden opportunities. And now is the time to take action ahead of time to prevent things from going (further) downhill. These opportunities might lie within your own company, but also outside. We believe that collaboration is one of the key drivers of resilience. Exchanging insights, data and capabilities with other organizations from within your ecosystem or business with similar problems could not only lead to new commercial opportunities (e.g. lower costs), but also an improvement of customer and supplier relationships while minimizing the collective risk in the ecosystem.  
 
We believe that collaboration will be most successful by shaping coalitions. A coalition is ‘a temporary bonding of two or more parties aiming to reach a common goal’. 

 


Four critical success factors of a coalition are:

1. Coalitions are designed small to be effective and with the potential to scale. 

2. Coalitions are initially formed by those that have the most to gain at solving one or more collective problems. 

3. Coalitions form a fair risk and reward system. 

4. Coalitions adopt a consensus-based governance that enables democratic steering of each step in the coalition itself and the delivery of the expected value.

A great example of an industry that could highly benefit from shaping a coalition is the travel and tourism industry. In this industry, services are very interdependent. The impact of an airline bankruptcy immediately impacts the whole value chain. From airports, to hotels, to local entrepreneurs etc. Collaboration within the industry could help to share the burden and the revenue and therefore help business to become more resilient. In response to an article written by the OECD, McKinsey suggested revenue-pooling structures for hotels as a good example of collaboration to become more resilient. Hotels competing in the same district and the same segment, instead of having all hotels operate at 20 to 40 percent occupancy, would have a subset of hotels operate at a higher occupancy rate while the others would be closed. The revenue would be shared by all hotels. This would optimize variable costs for all hotels.  

 

This is a very creative way of looking at the whole ecosystem and only one example of how collaboration could be beneficial. Other examples could be to create collaborative bargaining power to reduce costs for products and materials. Or maybe you could share business intelligence allowing for benchmarking. There are many possibilities. 

 

As Fæbric we are currently in the process of crafting multiple coalitions in the travel sector. We find that the involved parties are eager to cooperate in a time where leaders search for new anchor points in the management of their business. Changing needs from travelers require all parties to synchronize their business planning and to redesign the customer experiences.  
 

To make sure the collaboration creates value, you need to make sure that you: 

1. Take the lead in shaping the coalition 

2. Instigate equality between all parties 

3. Empathize with each other’s challenges 

4. Find common ground in the design of solutions 

5. Act now! 

Don’t be afraid to collaborate. It may surprise you what it can bring to your business, even within legal and competitive restrictions. Do not distance socially but draw other organizations closer as if they were part of your household. 

 


Please contact Lisette Leuftink or Roy Scheerder for an open dialogue on crafting coalitions.