Category: Collaborative business models

Case studies and visions on how to shape collaborative models and partnerships, envisioning its benefits

Collaborative business modelsCollaborative cultureCulture change

BCG six rules for managing complexity come down to one: make cooperation happen

As it has been explained in previous posts, Destinations 3.0 are developed upon cooperation between a wide variety of agents, encompassing DMO, DMCs, Tour-operators, Government, local suppliers, local community, etc. To make this cooperation work and manage such a complex network of players, the Boston Consulting Group has developed a new approach to managing complexity, called smart simplicity, which hinges on six simple rules. Guess what? All six rules come down to just one: make cooperation happen.

How do companies create value and achieve competitive advantage in an age of increasing complexity? That’s the question authors of “Six Simple Rules” Yves Morieux and Peter Tollman try to answer. For them, the winners of the new much more complex context will be the companies that can transform complexity into competitive advantage. For that to occur, they provide six managerial rules that go for companies, managers and employees with less-direct control, fewer systems, more flexibility and more autonomy. If read carefully, all six are about increasing cooperation at organizations, but three of them talk about it more directly.

Rule number two is “Look for Cooperation”Authors ask managers to find out how cooperation happens and who makes it happen; identify the “integrators”, the people and units who bring others together and drive processes; and eliminate layers and rules and give these integrators the power, authority, and incentives to make the entire task succeed.

“Six Simple Rules” differentiate between Cooperation and Collaboration. For them collaboration is about teamwork and good interpersonal relationships, which could even lead to the avoidance of real cooperation. Cooperation is a demanding activity that involves taking individual risks because individual contributions to the joint output can’t be directly measured. People only cooperate when, by cooperating, they can win as individuals. “Remove managerial positions if they don’t influence people to cooperate”, authors advise.

Rule number four: “Increase Reciprocity” (to make cooperation happen). Instead of relying on dedicated interfaces, coordination structures, or procedures, authors recommend managers to increase reciprocity, which ensures that people have a mutual interest in cooperation (as their success depends on each other). “Reciprocity makes people cooperate more autonomously and, therefore, makes organizational life simpler.”

And finally, rule number six: “Reward Those Who Cooperate”. If people think cooperation is risky, make it riskier not to cooperate. Most organizations punish failure. But that can make people risk averse. The challenge is to encourage risk taking that improves performance.  For Yves Morieux and Peter Tollman the solution is encouraging cooperation. “People take personal risk, and risk becomes fruitful for the company, when they know they can count on others to compensate, relay, absorb, or provide a safety net in case things go wrong”, they consider.

The original article is available at Why Managers Need the Six Simple Rules

This article is from www.co-society.com/half-bcg-six-rules-better-simpler-management-cooperation/

Collaborative business modelsCollaborative cultureCulture changeInnovationInnovative culture

A fresh outlook to public-private sectors relationship where a Co- mindset is key

Since the latest global financial crisis, new evidences prove the mindset shift ingrained in the private sectors in accordance with the trends of Marketing 3.0, namely referring to the business mission driven purpose and the cooperation between businesses and also with governments. This article deepens in the new role of governments in this new paradigm. For Willian D. Eggers and Paul Macmillan, authors of The Solution Revolution, it’s time to contemplate a fresh outlook to public-private sectors relationship where a Co- mindset and practice is key.

As tough societal problems persist and government budgets tighten, citizens, social enterprises, and even businesses, are relying less and less on government-only solutions. The Solution Revolution describes how, as the subtitle puts it, “business, government and social enterprises are teaming up to solve society’s toughest problems”.

These wavemakers range from edgy social enterprises to mega-foundations that are eclipsing development aid, to Fortune 500 companies delivering social good on the path to profit. In order to make the biggest impact, they have started to think holistically about their role and their relation to other players, not as competitors fighting over an ever-shrinking pie, but as potential collaborators. By erasing public-private sector boundaries, they are unlocking trillions of dollars in social benefit and commercial value.

For the “Solution Economy” new players, government is an essential part of the solution but government’s role have to change dramatically. The traditional boundaries between public and private sector should blur in order to get better results when dealing with social problems. There are some on both sides of the divide who doubt whether there should be such a divide at all. They are realizing that each sector stands to do better with a little help from the other.

Fortunately, as The Solution Revolution points out, international companies are increasingly seeking “progressive structures” through which co-operation is endorsed and regulations are created to engender higher levels of trust and mutual interest between companies, sectors, supply chains and markets.

Thus, the business world is undergoing such profound change that a fundamental rethink of the relationship between companies and governments is required. For instance, the so called “Purpose Economy” or “Purpose-Driven companies” where a new CSR mindset is less about PR and more about looking at problems as opportunities, including social problems as education, water, low-cost healthcare, sanitation, recycling, or reducing traffic congestion.

The Solution Revolution examines scores of examples of how this kind of Co- approach is already solving social problems. Here are some of them:

  • Recyclebank turned recycling into a game by uniting cities, citizens and companies around a system of exchange and rewards. Citizens are encouraged to recycle more by earning points that can be redeemed for discounts and deals on products and services from Recyclebank’s network of more than 100 corporate sponsors.
  • Unilever created an entire ecosystem of diverse partners to address an urgent sanitation problem affecting more than 600 million poor Indians. It acted as a partner with NGOs, banks and schools to create a profitable market for cleaning products in rural India.
  • NASA partnered with SpaceX and other private space companies when fiscal constraints shut down the agency’s space shuttle programs. SpaceX’s unmanned Dragon capsule successfully docked on the international space station in May 2012.

You may find the original article in The Solution Revolution

This article is from www.co-society.com/fresh-outlook-public-private-sectors-relationship-co-mindset-key

Beyond the proposed destination models 3.0, which other public-private partnerships do you envision for tourism destinations?

Business model innovationBusiness trendsCollaborative business modelsCollaborative cultureCulture change

Business ecosystems come of age

As it has been explained in many posts and Whitepapers, one of the key success factors of destinations in their evolution towards the Vision of Tourism 3.0 is to develop an innovation ecosystem integrated by different types of contributors. In that regard, Business Trend Series Deloitte’s report Business ecosystems come of age presents a series of articles describing how businesses are moving beyond traditional industry silos and conjoining networked ecosystems, creating new opportunities for innovation.

The report offers a glimpse of how some view the rise of ecosystems as an opportunity for creating powerful new competitive advantage as it becomes increasingly possible for firms to deploy and activate assets they neither own nor control and expand the possible beyond of their expertise and activities.

This brief summary outlines the various subjects and ideas dealt with:

Introduction: A brief history of the concept of ecosystems applied to business and how it all started in the technology sector but now is also taking root far beyond.

Blurring boundaries, uncharted frontiers: Long-standing boundaries and constraints that have traditionally determined the evolution of business are dissolving, allowing new ecosystem possibilities to flourish.

Wicked opportunities: Many kinds of complex, dynamic, and seemingly intractable social challenges are being reframed and attacked with renewed vigor through ecosystems formed by unprecedented networks of NGOs, social entrepreneurs, governments, and even businesses coalescing around them.

Regulating ecosystems: Regulators are challenged to create policies and solutions that protect the public’s interests and are also dynamic enough to keep pace with innovation born through ecosystems.

Supply chains and value webs: A set of powerful developments have worked together to help transform the business environment, changing how supply chains are configured, further heightening their strategic significance for many firms, and creating new leadership imperatives for the years ahead. Now “companies don’t compete—supply chains do.”

The new calculus of corporate portfolios: The rise of business ecosystems is compelling strategists to value assets according to an additional calculus, often generating different conclusions about what should be owned.

The power of platforms: Properly designed business platforms can help create and capture new economic value and scale the potential for learning across entire ecosystems.

Minimum viable transformation: Business model transformations are not unprecedented, they have always happened. It is not even new that business model transformations must consider the evolution of a company’s broader ecosystem. What is new today is that such transformations must be considered and accomplished routinely—not as storm-of-the-century events.

You may download the document at Business ecosystems come of age

This article is from www.co-society.com/official-business-ecosystems-come-age-deloitte-confirmed/

Business model innovationCo-creationCollaborative business modelsInnovationMarketing 3.0

Case study: Trip4real. Tourism experience collaborative business model

Trip4real is a paradigmatic example of how the collaborative economy flourishes in new business models for the tourism industry. Founded in Barcelona by Gloria Molins, it connects local experience developers with tourists eager to discover the destination through tailored experiences for them. Trip4real is a collaborative platform where any local may market a tourism experience to help the tourist discover the destination from a particular point of view or live special interest experiences.

The platform acts like a marketplace and also as an intermediary, so the payment is controlled by the platform and it gets a commission out of it. After the payment is done, the supplier and the client are connected to meet and live the experience. The motivation behind this business model is the will of the tourists for discovering the destination off the beaten track, where the locals go, and the hidden secrets that cannot be found in the Guides, as well as the authenticity brought by the interactivity with locals, who facilitate a deeper understanding about the local culture.

The first platform was developed for Barcelona, but other platforms have been developed in Madrid, Lisbon, London, Paris, Rome, Dublin, Berlin, Amsterdam, Edinburgh and a handful of Spanish destinations.

As has happened with Uber, do you think that these business models may be treated as unfair competitors to the local “official” tour guides and incoming agencies? Do you think there should be any kind of restrictions to letting it legally compete with standard tourism service suppliers?
You may check further details at www.trip4real.com

Business model innovationCollaborative business modelsStrategy

Small local brands: You either collaborate or you’ll be intermediated

In Destinations 3.0, DMOs work as marketing platforms intermediating for the local businesses and joining efforts with those businesses to reach the global market, just in the way that thousands of niche companies are willing to enjoy the benefits of the level of visibility and consistency that only a more “mainstream” brand can offer. This article explains the imperative need for small businesses and brands to develop cooperative marketing platforms to avoid being intermediated by wholesalers with a much higher negotiation power.

Some early Internet evangelists promised anybody with a website and an e-commerce platform can have a global market no matter how small the company or where it is located. A theoretical true, that statement does not take into consideration the laws of Attention Economics that Internet itself is boldly proving right from the very first moment.

It’s also true “Long Tail” niche offers can overcome this barrier by the same differentiation and exclusivity that made them niche in the very first place. Yes, it’s possible to create a global audience or market by offering something nobody else is offering and then establishing a relationship with your customers leveraging all new media and tools available today. Yet, still, this level of differentiation is not always and for everybody possible.

Collaboration with others such niche brands can make this strategy less difficult and more potentially fruitful.  Good news is people seem to be rejecting the notion of large corporations and are looking for companies whose people and story they can connect with. Bad news is Attention Economics apply, making impossible for customers to have a relationship close enough with all niche brands that could be relevant to them in a particular moment.

This is why even living in a flat world we still need intermediaries. A different kind, but still intermediaries. But in the digital paradigm, once eliminated geographical proximity as a factor, we only need one of these intermediaries for each of the limited list of categories our minds can deal with, making monopolies or oligopolies a natural and logical outcome for every market.

Good for those understanding becoming the perfect interface for a particular category of products or services is the fast lane to success (and dollars) in the digital realm. Too bad for the ones who will have (or already have) to deal with a monopolist in order to make their products or services visible and purchasable. Too bad for thousands of musicians or app developers taken a cut of a third of every sale that would have been considered outrageous if taken by a local record or software shop. For every Etsy or Zappos of the world, there is the menace of them taking advantage of a dominant position, the threat of the “Upper Hand” syndrome we wrote about referring the case of Fulfillment by Amazon.

Collaboration will be the only possible answer for the convergence of a growing number of niche offers and the challenge for these companies of having enough scale for their offers to be visible and purchasable. If these companies do not create and own their own intermediation by collaborating with others, somebody else will create a digital intermediation for them.

Co-Society was recently involved in a project for an association of cooperatives looking for new roles in a changing, much different world in which the Co-op concept was born. There is still an opportunity to build many middleware platforms between consumers and niche offers, an opportunity for umbrella organizations representing smaller or local brands and offers with a promise to the consumer of a guaranteed consistency and quality. But for these to be owned by the smalls brands themselves, there will be no other way that to be implemented and managed by a more collaborative, democratic and horizontal organizations we are used to, organizations similar to the structure and mindset with which cooperatives were born more than a century and a half ago.

This article is from www.co-society.com/small-local-brands-either-collaborate-youll-intermediated/

Up to what extend could the local niche brand be differentiated from the destination brand if this niche business has to be marketed through the destination branded platform?

Collaborative business modelsCollaborative culture

Seven habits for a highly successful Co-initiative

As you may have read in previous post or some of the Envisioning Tourism 3.0 Whitepapers, destinations approaching Tourism 3.0 have to develop a culture of collaboration to enhance the success in the development of collaborative business models and co-creation activities. This article from McKinsey & Company sums up to seven the number of ways to make partnerships successful. Marco Albani, the author, refers specifically to advices to take into consideration when creating and maintaining an alliance to address social and environmental issues, but tips can be likewise applied to any kind of partnerships and all sorts of Co- initiatives.

These seven habits for a highly effective Co- are the result of a research consisting basically in the interview of dozens of business, government, and NGO leaders.

These were the seven essential principles identified for success in a Co- initiative:

01.- Identify clear reasons to collaborate

Any collaboration must make sense for all parties. Commitment can be weak if partners sign up for an alliance simply because they don’t want to say no. A nascent partnership must identify strong incentives.

02.- Find a ‘fairy godmother’

As in any other kinds of projects, first movers take the biggest risks. Behind most successful collaborations are one or a few organizations that are willing to invest more than the rest to make the effort a success. And that’s ok. For any idea of Co-, you can probably find a high-performing, credible institution that can be a fairy godmother for the project because is passionate, credible, and courageous enough about the idea. Take profit of such organizations if you find them.

03.- Set simple, credible goals

One main barrier for collaboration success is partners with different agendas. Is therefore necessary to avoid this by setting. An aspirational goal that everyone agrees on… and everyone involved can achieve.

04.- Get professional help

When organizations come together, they each could have their own incentives, biases, and organizational cultures. Odds of conflict are highest when organizations are from completely different sectors and cultures. The first few months tend to be particularly rough. Collaboration projects increase their chances of success if a “neutral” facilitator is included in the project. A professional facilitator not only has an expertise on how to implement collaboration but, more importantly, represents a common and neutral ground to work with.

05.- Dedicate good people to the cause

Successful collaborations, at least at the start, are led by senior leaders from the founding organizations. A co- project it’s usually difficult enough to need dedicate qualified staff. A co- project it’s usually strategic for organizations involved, so they should resource it like it is strategic. So not trainees or time dedicated besides business as usual. The good news are a co-project effort is like a start-up, so talented individuals will give their all if they believe in the goals and allows them to work differently as usual. Working on a major collaboration should be an exciting career builder, not a dead end.

06.- Be flexible in defining success

A Co-project if successful if it changes somehow the rules of a game in a positive way. But a Co-project (as most of any other kinds of projects) hardly will change the world. So it’s not a good idea to think so and then when it doesn’t, think that it failed. Understanding the nature of the change aimed will help not to dismay when trying to get it.

07.- Prepare to let go

No collaboration should be kept alive beyond its useful lifetime. Once set up a goal, it should be planned a process for the collaboration either wind down or become an independent entity.

This post is from www.co-society.com/seven-habits-highly-successful-co-initiative

The original article includes several real cases for each lesson learned. See the original post at     Creating partnerships for sustainability

Would you consider any other profitable habit to enhance the cooperation success?

Co-creationCollaborative business modelsInnovationMarketing 3.0Open innovation

Product development through co-creation

Beyond customization right before or during the experience, co-creation may take place in many different ways:

  • Co-creation workshops, organized as a creative and educational activity open to all stakeholders, which in turn may provide valuable ideas to develop products.
  • Product development contests, organized to promote contribution to the open innovation system providing elaborated ideas on how to develop new life-changing experiences.
  • Ideation bank contributions, permanently accessible as a section of the open innovation system, where innovation needs are posted, and solutions are submitted and voted.
  • Product Manager’s creation based on inputs from creative reviews and new stories, permanently inspiring and nurturing the marketers’ creativity.
  • Local service supplier creation based on own creativity, inputs from reviews and stories, and the technical support of the Product Manager.

The Product co-creation workshops play a critical role as both educational and productive events. There, Product Managers explain the product development process and the key success factors for creating life-changing experiences according to the destination’s mission. The workshops educate the attendants in the art of ideation and team working to generate and refine ideas leveraging all group members’ creativity.

Attendance should be mandatory for local DMC like the micro-entrepreneurs from the base of the pyramid, but also the participation of all other community stakeholders should be encouraged. Other interesting targets could be school students as part of their education, members of mission driven organizations such as NGO, etc.

Do you think of other ways to develop products through co-creation?

Collaborative business modelsMarketing 3.0StrategyStrategy planning & execution

Destination models’ partnership & ownership related variables

Partnership structure: even if most destinations –cultural destinations- are driven by many DMCs and one DMO, there may be many different formulas to structure their relationship in terms of partnership. In most cases the DMO is controlled by the government, but there may be different levels of participation from the private operators (DMCs) in the strategic direction, funding and management of the DMO. In some cases the operators are just listened to during the definition of the destination strategy in order to consider their valuable inputs, whereas some other models are more integrative. More integrative models are those where both the private sector and government provide funding for the DMO activities, both have the power to appoint members of the DMO board, and have to agree on the DMO strategic direction and management. In some cases, the DMO is exclusively run by the private operators.

Ownership structure: even if most destinations are run by many operators of all kinds –accommodation, activities, food & beverage, transportation, etc.-, in some destinations there is one operator dominating the business, and in some cases –ski resorts, theme parks, etc.- the destination has only one operator, or many operators belonging to the same owner or holding. Regarding the composition of the operators’ ownership, there are many models:

  • Integrated resorts: all businesses are controlled by the same owner. This is the case of some theme parks, ski resorts, golf resorts, etc.
  • Resort based destinations: one resort is the main attraction but many other operators can also take advantage of the tourist flows.
  • Cultural destinations: their natural and/or cultural heritage is the main attraction, with many operators of different sizes but without a dominant one.
  • Destinations 3.0: it may correspond to different kinds of attractions, and the ownership may be shared between government, investors and small stakeholders, in partnership with other small businesses and other types of organizations.

 

Would you consider other variables concerning partnership and ownership?

Collaborative business modelsStrategyStrategy planning & executionSustainability

The destination model as a key factor for competitiveness and sustainability

The competitiveness of a tourism destination is not just a matter of tourism operators’ performance. Instead, the potential of a destination for competing in the travel market is determined from the top government policies regarding urban planning, public services, territory planning –protecting natural interest areas-, and tourism development planning, determining tourism related regulations, license policies, investments in facilities and infrastructures and also cross-destination marketing planning and execution.

So long as the tourism activity affects not only the tourism operators, but also the residents’ lives, other business sectors and the image of the territory, it is necessary to elaborate a thorough model attending to the needs and aspirations of all stakeholders. The complexity and challenge of tourism development planning is namely in the need for reaching a balance point, considering all the stakeholders’ interests.

A destination model is to provide answers to three main questions:

  • What can we do to develop tourism in the destination?
  • How can we do it?
  • What vision do we want to strive for?

Finding answers to these questions means choosing among different alternatives related to the tourism to be developed: the development pace, intensity, the limitations to the business growth, etc. Furthermore, a development model works like a guide and reference framework for the activities of both public and private agents, and to articulate cooperation between different public bodies and between public and private ones.

Other advantages and benefits of defining a destination development model are:

  • The territorial structure –cluster definition- of the tourism development is clearly defined.
  • The destination takes advantage of the market opportunities more effectively.
  • The destination’s resources and attractions are leveraged more adequately.
  • Government leaders and local operators have a reference framework to orient their strategy.
  • The need for infrastructures, facilities, financial, technological and human resources are clearly defined according to established goals.
  • Investors have a reference framework that provides them with valuable orientation.
  • Resources are assigned more rationally, effectively and profitably.
  • The tourism management has a reference framework to orient the decision making.
  • The reaction versus certain changes in the market is faster and more effective.

Once the model is defined, if this is brought into practice, there are even more benefits:

  • The destination creates and develops solid and sustainable competitive advantages.
  • The destination positioning and image is stronger.
  • The tourism businesses operating in the destination are more profitable and increase revenue
  • The service quality and tourists’ satisfaction increases.
  • The destination inhabitants perceive the positive impact of the tourism activity more clearly.
  • All stakeholders have more confidence in the future of the destination.

Do you think of other benefits of defining the destination development model?

Business model innovationCo-creationCollaborative business modelsEnvironmental sustainabilityInnovation

Story innovation concepts: added value & crowd game driven experiences

Beyond the explained details of the four prototypes, there may be many other added value experiences to support the main one in fostering its popularity and conveying new contributions both in virtual and real world platforms. Some of these story related experiences could be video games (in the case of the prototypes 3 and 4 the video game is an essential component), comic based stories, theater plays, board games, movies, spin-off stories, merchandise products, etc. This is actually what film series such as Harry Potter, Star Wars or Lord of the rings have done to some extent, trying to satisfy the desires of their followers for more story related experiences.

With regards to the crowd game driven experiences, the environmental challenges would be driven by volunteers, usually entailing some kind of field work to achieve a certain goal in relation with the environment protection in the form of a game driven experience to make it more fun and stimulating. In the case of the creativity & cooperation challenge, it would be driven by contributors willing to prove their creative skills, in the form of a game driven experience where participants also have to prove teamwork capacity by solving one or more innovation challenges related with the mission purpose, which also serves as an educational experience in collaborative innovation. Finally, the educational fun experience is for tourists willing to entertain while taking away some significant learning outcomes related to skill development or social consciousness, for instance.

In the case of contributors in creativity & cooperation challenges and also in the case of story making contributors, there should be a system that not only facilitates but also rewards contributors based on a reputation and incentive system, in order to stimulate talented followers to bring in their passion and imagination to build the story world. This is not only crowd sourcing but also providing the audience members an opportunity to live a life-changing experience by exploiting their skills. The Whitepaper “Envisioning Open innovation in destinations” is to further develop the idea of the incentive and reputation system for contributors.

Do you envision other story innovation concepts to enhance the aforementioned ideas or to inspire new story based experiences?