Collaboration implies sharing. Sharing of many things is common with the exception of IP. Somehow IP remains out of bounds. And yet, in today’s economy this is precisely what collaboration could be based on.

Toyota and Mazda are teaming for a noble purpose: to “make cars better.” That’s how the two Japanese automakers termed their partnership, which was announced this week.
Source: http://www.autoblog.com/2015/05/16/weekly-recap-toyota-mazda-volvo-ford-top-gear/

Recently, two automotive giants and competitors Mazda and Toyota entered into a collaborative arrangement whereby they intend to share technology. This is no small thing. Technology is the product of very expensive research and knowledge bases. This example of large business collaboration is not the first such high level broad initiative, but it is somewhat less common when it comes to sharing of IP. This foray into the world of business collaboration is a strategic response to a significant challenge that the automotive industry in particular has to grapple with; the cost of research and development.

What is very interesting about this specific collaboration between the two carmakers is that they are both entrepreneurial. They do not see collaboration as the silver bullet. Instead they seem to recognise the simple fact that collaboration comes with a range of unknown factors that only can be uncovered during the process of collaboration. Innovation is one of those activities that can produce solutions that are hard to forecast before collaboration starts. Thus their enterprising approach; which is well reflected in the way Dr Peter Klein, author of The Capitalist and the Entrepreneur, sees entrepreneurship; ‘judgmental decision-making under uncertainty’,

Most decision makers, particularly those in profit-oriented ventures, would seek some evidence that collaboration provides return on investment. That is one of the sound principles of good business decision making. However, most collaborations are not easy to measure to the same extent as other processes. This is due in part to the fact that collaboration is also disruptive; which leads the decision makers to rely on an acute sense of strategy which can compensate for the uncertainty factor.

Yet another interesting insight emerging from the Mazda – Toyota alliance is a telling story of Mr Sergio Marchionne, chief executive officer of Fiat Chrysler Automobiles, who has come from outside the automotive industry and managed to turn the fortunes of the merged Fiat and Chrysler company with his innovative thinking. Mr Marchionne has been a known advocate of business models that lean more towards collaboration and/or full mergers. Collaborative strategies are, so it seems, sooner or later the more apparent way forward. The difference is only in the clarity of thought that managers can establish by arming themselves with knowledge about this increasingly irreplaceable discipline.