How cross-organizational collaboration solves value chain wide business problems

A year of co-creating sustainable solutions with Combient Pure has revealed us key insights about the dynamics and success factors within sustainable business and collaboration. The progress of Pure’s first projects shows that cross-organizational, value chain wide work can actually resolve challenges that individual organizations have not been able to overcome on their own. 

Today’s rapidly changing business environment creates new challenges and opportunities for organizations. Especially in terms of sustainability, new drivers appear constantly within regulation, customer expectations, and emerging technologies, just to name a few. While these issues have previously been managed by organizations through individual sustainability work, industry-leading organizations have started to notice the inevitable changes and aim higher in sustainability. These organizations create impact through sustainable business cases, where the value creation objectives are both on profit and sustainability. While balancing these two objectives requires a novel approach to strategy, it can lead to higher net value for the company through differentiation and innovation. Sustainable innovation may even lead to re-thinking operations and products, and ultimately new business.

Being able to adapt to the changes quickly and efficiently enough may require additional resources or knowledge through collaboration and co-creation. This is why many companies choose to collaborate to accelerate their sustainable innovation and make it in the constantly more demanding market environment.

Interorganizational collaboration helps with knowledge-sharing, rapid product development or innovation, sharing costs and risks as well as finding synergies.

In addition, some sustainability challenges cannot be solved by an individual organization. In order to fully leverage the value creation potential within these topics, companies must collaborate across value chains. On the other hand, collaboration also requires focusing efficiently on mutual value definition, communication and building trust.

Successful sustainability networks need an orchestrating party 

Sustainable business and collaboration are complex practice areas with their own challenges, but there is a key characteristic in collaboration why organizations such as Combient Pure can bring additional value.

Collaborative networks are rarely self-coordinating and require some central organization.

These central organizations, either members of the network or third parties, can help with creating structures to promote information exchange, formalizing initiatives, and keeping members accountable. 

However, this leadership differs significantly from leading individual organizations, as it requires not only coordinating organizations but the overall conditions on which the network of companies operates. If this role is taken by an objective third party, the members can more efficiently define value, build trust and make decisions. This has been the case for Combient Pure as well, and companies participating in Pure’s projects frequently report that having a neutral party running the collaboration makes it more efficient, transparent and structured. 

Value is created through five key success factors in the collaborative context

To further develop Combient Pure’s expertise on orchestrating such co-creation, a research study was conducted on how companies can achieve both sustainable and business value. Observing the co-creation projects and reviewing academic research on the topic have revealed some key dynamics about collaborative sustainable business projects. Firstly, even though the challenges between balancing sustainability and traditional profit-focused logics emerge mainly on an organizational level, these can be solved in the collaborative context. 

The success of Combient Pure’s first projects shows that cross-organizational knowledge-sharing and joint value definition can actually resolve challenges that individual organizations have not been able to overcome on their own.

This also means that defining, balancing and ultimately creating sustainable and business value alongside each other is feasible within a reasonable timeframe, at least through value chain collaboration.

Secondly,during the study five key success factors were identified to drive this value creation to build expertise on orchestrating sustainable co-creation. Five characteristics seem to be present in successful projects: 

  • sharing knowledge

  • building trust

  • having a synergetic approach

  • active joint learning 

  • sensemaking within sustainability strategies. 

Knowledge-sharing helps organizations tackle challenges and leverage opportunities more efficiently, whereas building trust allows members to be transparent on their capabilities and objectives and to ultimately aim for synergies.

While knowledge-sharing has been widely identified as a key success factor in collaboration, it is important to note that synergies can only be found if all members are open to sharing their expectations, incentives and challenges, which requires trust from both sides.

This means that both industry and organizational knowledge are valuable. Active joint learning means that members are willing to utilize external expertise and together with making sense of the learnings, this has resulted in effective decision-making. Joint learning processes create an environment for data-driven and fact-based decision making, but if the members are not discussing the learnings openly and structuring and labeling the information, it does not accelerate decision-making. 

All of these key success factors can also be initiated by an orchestrating party based on the findings from the study. This means that while the members ultimately make the decisions and create the progress, an orchestrating party can accelerate the way there by focusing on the success factors. Combient Pure is actively building all of these five factors, in addition to other insights from the study, into the co-development process that is constantly iterated and developed to deliver value to participants.

Author: Sanni Vilmi

The author recently finished her Master’s Thesis for Combient Pure and Aalto University on Strategizing an Interorganizational Collaboration in Pursuing Sustainable and Business Value.

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