Is collaboration critical for community business success?

Steve Wyler and Margaret Adjaye, November 2018

It has often been said that collaboration is ‘the suppression of mutual loathing in the pursuit of public funding’. Cynical maybe, but who has worked in the community sector and not had experience of this? And we don’t have to go far to find examples of collaboration, not least at local level, which have been costly, in both time and money, distracting, inward-looking, protectionist, inefficient, and a downright pain in the neck.

But is this the whole story?  Of course not. It is also possible to find many stories of collaborative success, sometimes genuinely inspiring. And it is difficult to think that any community organisation can truly achieve the changes it wishes to see without building alliances, without finding those willing to work for the common good and set aside a narrow organisational self-interest, without understanding that complex problems can only be successfully addressed through a concerted approach.

We were recently asked by Power to Change to explore whether or not there is evidence for two of its hypotheses, which are that community businesses which collaborate with each other in a local area are more successful, and that those which share a common vision are more resilient.

We soon discovered that the evidence base, whether for or against these hypotheses, is weak. While there are many studies on theory and practice of collaboration in the business sector, and to a lesser extent in the charity and not-for-profit sector, there are few studies that directly throw light on the Power to Change hypotheses.

But nevertheless we were able to draw some tentative conclusions.  There first is that at local level collaborations which only involve community businesses are relatively scarce.  Far more significant are collaborations between community businesses and other social sector organisations, as well as organisations from across the public, private and social sector, and also collaborations with local citizens. In part this is because there are few local areas where a substantial number of community businesses exist, but also because successful and sustained collaboration requires shared goals, and this can be more important than organisational similarity.

It quickly became clear that the term ‘collaboration’ embraces a very wide range of activities, including informal exchange of knowledge, ideas and contacts, co-location and sharing of resources, bidding alliances, joint ventures, and group structures. Collaboration can be driven by the pursuit of money, by efforts to reduce cost, by attempts to win new business or grow a market, by an appetite for greater influence, or – perhaps most importantly – a desire to achieve greater community impact. And the available evidence suggests that collaboration can be a viable strategy to achieve all these outcomes, although in each case the arguments in favour of the benefits produced by collaboration can, at least in part, be offset by arguments against.

Most collaboration is informal, and in the UK only 26% of small charities enter into formal written agreements. Among community businesses we spoke to the quality of relationships was the main factor in success, or failure for that matter.

Indeed, it seems that collaboration is never easy. Those who engage in collaboration, if they are to succeed, need to find ways to manage complex aspects of organisational behaviour, including trust, control and risk. Indeed, most community businesses operate on the basis of ‘co-opetition’ a term used to describe business behaviours which are a combination of competition and co-operation.

Collaboration is shaped by many local factors, including the quality of leadership, organisational histories, policies of funders, and the behaviour of statutory bodies. This means that a model of collaboration which is successful in one context will not necessarily be successful in another. But nevertheless there is much that can be done to build a practice and culture of positive collaboration by community businesses, and models of collaborative commissioning, encouragement by independent funders, and the building of networks by sector support agencies, all have important parts to play.

Our conclusion was that the Power to Change  hypotheses as they stand are not supported by the evidence, but that alternatives could be usefully drawn up, for example: ‘community businesses which collaborate with local people and with other public, private and voluntary agencies are able to tackle complex community challenges more successfully because they can co-ordinate local efforts better.’