How To Pull Ahead Of Your Competitors Through Cooperation

““Competition is the offspring of fear; cooperation, the child of confidence.”” – Mark Morgan Ford

If you remember the movie Wall Street, you may recollect the character Gordon Gecko (played by Michael Douglas) – a viciously ambitious stockbroker who broke every ethical rule and took advantage of every relationship to further his career. (KY reminds me that a gecko is a lizard that has adhesive pads on its feet, allowing it to climb vertically.)

After that movie was released, there was a lot of talk in the media about “cutthroat businessmen” and the competitive nature of Wall Street. “Funny thing about that movie,” JSN said to me after seeing it. “My experience on Wall Street was nothing like that. It was much more like ‘I’ll scratch your back if you scratch mine.’” JSN should know. He was one of the red-hot wonder kids during the “go-go” ‘60s, and the youngest ever (at that time) to buy a seat on the New York Stock Exchange.

Since that discussion, I’ve paid attention to this phenomenon in my own business life. I hear plenty of talk about how cutthroat business is, but most of what I see is softer. I do know businessmen who are rude and crude. I know some who lie and cheat. But most of the worst ones don’t do very well. They score a couple of scams, but then word gets out. Before long, they can’t find anybody but new, dumb meat to do business with.

Put differently, most of the business successes I’ve known or have seen firsthand were achieved by some form of cooperative behavior.

Take My Life . . . Please

Take the direct-mail publishing business as an example. When I got into it more than 25 years ago, there were many small-business owners around who were covetous both of the names they owned and the marketing secrets they had discovered. They wouldn’t rent out their names, and they wouldn’t talk to you about what they did. There were also business owners who recognized that by sharing ideas and cross-marketing names, they could grow faster.

Today, none of the former are still in business. (Or if they are, they have dropped off my radar screen.) But several of the latter have gone on to become extremely successful.

Among the “cooperators” is BB who has built a $100 million, international publishing empire by deploying many skills, not the least of which is a very accommodating nature. One example: BB spent six months resurrecting a failed British publishing company without any contracted compensation . . . only the hope that they would appreciate his help and allow him to buy half (and eventually all) of the business. They did – and now it is one of his most profitable businesses.

I can tell you from personal experience that in the jewelry business, the art business, the contest and sweepstakes business, the astrology business, the academic book publishing business, and many others . . . cooperation works much better than competition. And for large businesses, cooperation can work wonders.

There’s a story about Grolier Encyclopedia that I’ve told before. Here’s the short version: . Grolier’s publishers were hanging on by their fingernails when their primary competitor invited them into his offices to see how his company was succeeding at something Grolier was failing at. (It was a bounce-back telemarketing program.) Yes, this sharing saved Grolier – but it also provided the competitor with a continuous supply of Grolier’s names that he could mail his offers to.

How Competition Can Destroy Business From The Inside Out

This principle is also true when it comes to the internal management of business. Steven R. Covey (the Seven Habits guy) has recently become a business expert. (Why not? He’s a thoughtful man.) One of the mistakes he sees some entrepreneurs make is trying to get their people to compete inside the company.

“They think this will enhance productivity,” he says, “but what it really does is create conflicts and interdepartmental rivalry.”

He’s absolutely right about that.

I know. I have done it both ways. My earliest instinct was to set good people against one another, hoping it would drive them to achieve more. Instead, what I got was a lot of negative, unproductive behaviors.

For one of my businesses, this is still a major problem. We have managers withholding vital information from one another. We have managers taking potshots at others, creating conflicts that go on forever. We have energy spent on beating people down instead of on making better products and selling them more effectively.

I discussed this with JG, my close friend, former business partner, and fellow ruminator. He was, as usual, serenely in tune with this line of thinking. The ultimate purpose of martial arts, he made me understand, is not victory but peace. You learn fighting techniques not so you can go out and beat people up but so you can live in tranquility and not have to worry about being beaten up yourself.