To compete or not to...?
A question worthy of Hamlet. Market dynamics mean that competition between brands and business is a primary business driver. Get your competitive edge right, the MBA professors tell us, and the market will reward you well.
Even when it comes to sustainability, competition drives progress. This is particularly true in the UK retail sector, where an ‘I’m greener than you are’ contest has been on the go for a few years now.
But collaboration, too, drives progress. It has to: some issues, notably big hairy supply chain challenges, are just too great for one business to tackle alone. We know collaboration works. Collaboration along value chains (the ‘vertical’ variety) can be very successful in making serious reductions in carbon and water use. ‘Horizontal’ collaboration across different businesses can provide commonality in standards: look at the Higgs Index borne from the Sustainable Apparel Coalition. And then there’s the mother of all collaboration, the multi-stakeholder variety. The Roundtable on Sustainable Palm Oil is a bit of a poster child in this category.
So maybe a better question might be when to compete, and when to collaborate? Here, a systems perspective helps to frame the answer. If our aim is to make sustainable products and services the norm, which systemic barriers are preventing this step change?
Of course, they vary according to sector, but there are constants: the lack of mainstream consumer engagement on sustainability would be one. The failure to ignite mainstream investor interest in sustainability would be another.
In order to change the mood music among mainstream consumers, we need new collaboration. We need to see the dial shift between what companies believe will give them competitive edge and what they see as ‘pre-competitive’ – moving a bunch of activities into the pre-competitive box. True, EU competition law doesn’t help here, but a mindset that sees the value of both competition and collaboration goes a long way.
And here is the rub. Businesses need to rethink the purpose of competition and collaboration. Of course there will still be room to compete, but against a backdrop where the systemic barriers to the realisation of a sustainable future have largely been removed.
Sally Uren is Deputy Chief Executive at Forum for the Future.