On Our Radar: “Enlightened” Competition: Coming to an Entrenched Rivalry Near You?

31 Aug 2011 – Mohammed Al-Shawaf

What was your reaction when hearing that Ford and Toyota will co-develop a hybrid powertrain system for pickup trucks and SUVs, in addition to collaborating on each other’s in-vehicle telematics systems? If you had a knee-jerk response of “Really…._them?,” you were in good company. The automakers’ fierce rivalry makes them some of the strangest of bedfellows, but while the partnership was unexpected, its motives are unsurprising. Given the new, much more stringent EPA fuel standards announced last month, both companies recognized that they would be more successful coming together in this instance, than going at it alone.

Ford and Toyota are far from the only rivals who’ve recently made this kind of calculus. Greenpeace’s high-profile campaign “Dirty Laundry,” which has called on some of the largest clothing brands to commit to eliminating hazardous chemicals in their supply chains, has spurred Adidas to begin talks with rivals Nike and Puma (among others) to establish an industry-wide initiative to develop an integrated chemical management program. Similarly, Imperial Oil (of which Exxon Mobil is a majority owner) and six other energy companies racing to develop tar sands oil in Northern Canada, created the Oil Sands Tailings Consortium this spring to jointly develop technology for cleaning up wet tailing ponds, a dirty composite of water, sand, clay and chemical residues left over from development that has attracted the ire of prominent environmental groups and government officials.

But there is an important distinction between the Ford-Toyota partnership and these industry initiatives. Whereas the footwear and oil industry examples focus on resource/risk management (areas largely shrouded from the view of most consumers) and have been driven, in part, by persistent and prevalent NGO campaigns, the automakers’ alliance came from a mutual recognition that there are certain aspects of R&D and production where a single-minded focus on competitive advantage does not create added value.

We have long talked about the pressing nature and scale of the issues our society faces today. It is simply impractical to wait for the genius of one company’s R&D team to develop the kind of breakthroughs that are required to materially and positively impact sustainable development. “Enlightened” competition re-evaluates the pros of single-minded propriety concerns and asserts that collaboration—the type that facilitates selective knowledge transfer and speed scaling—is no longer anathema to market share and competitiveness. Here’s to seeing many more “enlightened” rivalries.

—————

For more than two decades companies have valued our ability to serve as their early warning system, to interpret what is happening in the world today and how it may impact their business tomorrow.

Our “Radar” services range from the general – monthly cross-industry trending digests – to the bespoke – tailored analysis of the most critical emerging issues to your business, and recommendations on how to tackle them.

This is the sixth in a series of blogs giving a glimpse of what’s on our radar. If your company could benefit from an early warning system, to identify key threats and opportunities as you navigate the rapidly evolving sustainability landscape, please contact us.