Just as a marriage needs commitment to survive, so do relationships between partnering businesses. Try to partner with too many businesses, and it will be far more difficult to achieve a meaningful relationship, according to “The Benefits of Commitment,” a recent article in the MIT Sloan Management Review.
Authors Andreas B. Eisingerich of Imperial College Business School in London, Matthias Seifert of IE Business School in Madrid and Gaia Rubera of Michigan State University interviewed 152 managers in several countries to study how service businesses were affected by their number of partnerships.
They found that companies with more collaborations were less profitable, less innovative and less skilled at communication efforts.
On the other hand, companies with a small number of committed partners reaped the following benefits:
- Greater focus on introducing new products
- Reduced uncertainty regarding the nature of the collaborative relationship
- Efficient knowledge sharing
- Ability to better evaluate the capabilities of business partners
- More innovation and more commercial success as a result of those innovations
The authors are careful to point out that their findings don’t mean that companies should abandon collaboration altogether. They call collaboration an “important driver” of how companies perform and look to Apple as an example of a company with the right number of partnerships:
Often cited for its successful innovation, Apple collaborates with numerous businesses. However, Apple is highly selective in choosing its exchange partners and how it commits to them. For example, it conducts almost all of its R&D and product development near its headquarters in Cupertino, California.
Chalk another one up for the less-is-more mindset. Do you find that a smaller number of partnerships works better for your company?
Image courtesy of WikiMedia Commons.
