By Barrett Cordero, a YPO member since 2016 and President of BigSpeak Inc.
Ever work with a rival to win? In adventure racing, it happens all the time.
Teams come from all over the world to compete in the harshest and most difficult terrains on Earth. Only one team can cross the finish line a winner. If you expect the competition to be cutthroat, you would be right. If I told you that rival teams help each other to win, you would think I was nuts. But I’m not.
In the book “How Winning Works” by adventure racing champion and three-time Guinness World Record holder, Robyn Benincasa, the author explained that one of the secrets to her team’s success in international racing was collaborating with her competitors. When the terrain is harsh, the weather unpredictable, and every minute counts, teams need to build distance between themselves and the pack to win. So, in the first six days of racing, the strongest teams used short-term synergy to put themselves out in front of the weaker teams. Then it was every strong team for itself.
Business is not an adventure race, but some very successful companies have learned the best way to succeed in business is to work with their rivals, not against them. For examples, look at NFL teams, operating system rivals Apple and Microsoft, and even the speakers bureau industry to see how industry rivals working together can profit everyone.
NFL revenue sharing
Before 1960, the U.S. National Football League was every franchise for itself. Individual teams made their money from separate television deals with networks to broadcast their games, ticket sales for attendance at their individual stadiums, and sales of team merchandise. While teams in large urban markets like New York, New York, USA, benefited from having a larger population base for broadcast deals and fan attendance, smaller market teams, such as Green Bay, Wisconsin, USA, were at a disadvantage.
This changed in 1960, when NFL Commissioner Pete Rozelle convinced all the owners in the league that it was in their best interest to collectively share revenues with his “league think” philosophy. That meant teams no longer followed every team for itself model and instead shared revenues across the league from broadcast deals, stadium attendance and merchandise sales.
Fifty years later, this model is still working. In 2016, the combined 32 NFL teams shared more than USD7.8 billion in revenue. That’s a cool USD243 million for each team whether the team was the Super Bowl winning New England Patriots or the 1-15 Cleveland Browns.
While the sharing of revenue seems counterintuitive to competition, this allows the league as a whole to prosper. Teams in smaller cities with a smaller revenue base, instead of being shut out because they cannot compete financially, can field good teams year after year. Good competition fuels fan interest, generating more revenue for all teams and players. Everyone wins.
In the early 1980s, Apple was becoming the one to beat in the personal computing industry. However, by 1985 Apple was lagging behind its rivals Commodore and Microsoft. Microsoft eventually dominated the computer operating system market. By 1997, after a series of missteps, Apple was on the verge of failure when Steve Jobs returned and came up with a plan to work with his main rival, Microsoft, and not against them.
Steve Jobs and Bill Gates forged a new partnership. Gates, instead of crushing Apple in its weakest moment, made a pledge to support Apple by making a Microsoft Office software package especially for Mac users. His support made Apple computers more attractive to users and businesses alike. Apple also agreed to support Microsoft’s browser, Internet Explorer, by making it the default internet browser on Mac computers.
Jobs summed up the strategy of collaboration nicely: “We have to let go of this notion that for Apple to win Microsoft has to lose. We have to embrace a notion that for Apple to win, Apple has to do a really good job.”
By the two rivals working together, Mac users benefitted by having Microsoft Office software, Microsoft benefitted by having more software sales, Apple benefitted by keeping its company competitive, and the business world benefitted by having a standard Office software package used across rival operating systems. Win, win, win and win.
When I joined the speakers bureau industry, it was every agency for itself. If you’re not familiar with the speakers bureau industry, our job is to connect the right keynote speaker with the right company. Like the filmmaking industry, we make money through booking clients — especially our exclusive clients.
So, for booking a gig, another agency’s win is our loss and vice versa. The result was whenever my bureau got a lead for a keynote speaker represented exclusively by a rival bureau, we would either lose that client, or try to convince our client to get a speaker that was not their first choice. In both situations, either we lost, or the client lost. I wondered: Was there a way we could all win? How do we leverage the network of competitors instead of keeping walls up?
We started allowing our competitors the right to market our exclusive speakers and provide them with a majority of the commission when a deal was booked. Instead of these speaker bureaus turning their clients to a speaker they did not want, they could direct that client to our rival roster but still profit.
This way the client booked the speaker they wanted, the speaker booked a job where they were first choice, and each speaker’s bureau made money. Win, win and win.
If you want to succeed in your industry, find places where you can collaborate with your rivals to mutually profit. The network of competitors is larger than any one company so creatively think who to enable and then empower those entities to become a sales channel.
The NFL does it with revenue sharing, the computer industry does it with software and hardware deals, and speakers bureaus do it with sharing commissions and marketing rights. As long as the deal is one in which the customer also wins, then there is nothing stopping the model from eventually working and being adopted. Those competitors that resist the change will be the ones left behind.
Barrett Cordero is the President of BigSpeak Inc., a leading global speakers bureau representing business icons, bestselling authors, world-class athletes, vanguard thought leaders, celebrities, technologists, consultants and entertainers.
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