by Matthew Lynch, Global Head of Research, Woods Bagot
The experience for MBA candidates in Sydney recently reached new heights. Some lucky students at the Macquarie University Graduate School of Management (MGSM) will undertake their study from the InterContinental Sydney Double Bay – a luxurious five-star hotel with rooftop pool and bar overlooking Sydney harbour.
"This partnership offers real mutual benefit," said Sarah Ball, global head of education for Woods Bagot. "It introduces the next generation of business leaders to the hotel brand, and it also provides the university with tremendous bragging rights and co-branding opportunities."
This hook-up between the MGSM and InterContinental points toward a broader global trend toward strategic alliances.
Some 51% of chief executives plan to enter a strategic alliance in the next year, according to PwC’s latest Annual Global CEO Survey of some 1,300 chief executives across 77 countries. This continues a decade-long trend toward corporate partnerships, of which there have been more than 42,000 worldwide according to research led by Andrew Shipilov, associate professor of strategy at INSEAD.
The trick, according to Ball, is to figure out how to best support a partnership through real estate solutions.
Of course, inter-organisational collaboration is the lynchpin of businesses such as WeWork, which curates collaborative environments for entrepreneurs and small businesses.
But on a larger scale, this emerging trend demands a unique property solution to inter-organisational collaborations between multinational corporates, between institutions, and between public-sector organisations.
Trend: Breaking down boundaries
The Qantas / Emirates partnership, for example, boosted Qantas’ underlying profit from AUD 95 million to AUD 192 million in the year after the codesharing program; it expanded Emirates’ connectivity to an additional 40 destinations and 5,000 flights per week; and it now allows travelers to earn both Qantas Frequent Flyer points and Emirates Skywards miles.
This kind of collaboration within and between corporations has always existed in some form.
Because corporate alliances can offer considerable advantages to both the business and to its consumers.
"We’re realising that inter-organisational and cross-organisational collaborations can be a really effective way to do business," said Sarah Kay, Director and Global Workplace Interiors Leader, Woods Bagot. "We’re noticing a lot of organisations are working collaboratively with other organisations – on an ad-hoc basis for individual projects, and also within the context of formalised long-term enterprise alliances."
Philips, for example, recently extended its corporate relationship with Salesforce.com beyond that of buyer-supplier. The two firms are now jointly-establishing the HealthSuite Digital Platform – an open, cloud-based, health platform for patient relationship management that will facilitate self-care, diagnosis, treatment, recovery and wellness.
Taking this one step further, Philips has also partnered with the Radboud University Medical Center to develop and test the platform to ensure adoption by hospitals and their patients.
Philips has created an Alliance Management office... [to] manage regular meetings in which the Philips executives in charge of the Salesforce.com alliance can learn about what is going on in the alliance with Radboud and vice versa. This helps build multi-billion market opportunities across the three partnerships.
Source: Harvard Business Review
This innovation, says the Harvard Business Review, was made possible by the way Philips manages its alliances.
"The partnership has a lot to gain," said Kay. "Corporate collaborations have been demonstrated to benefit from an increase in market share and to achieve higher profit margins."
"Boundarylessness is an innovation that helps enterprise collaborations," said Kay. "Boundarylessness refers to a building or a portfolio that is shared by two or more corporations that achieve more than the sum of their parts through co-locating. This is a multi-tenanted space that drives innovation through collaboration, but also achieves efficiencies through shared building infrastructure, amenities, and services."
Take, for example, Campus London, which is Google’s effort to co-locate with other tech-sector organisations as an ‘engine for collaborative innovation’. The campus includes spaces, events and programs designed specifically for inter-organisational collaboration, while still achieving privacy and security requirements.
The Campus London development perfectly engenders organisational collaboration by leveraging from latent corporate synergies.
And the benefits speak for themselves.
Google has since launched further campuses in Madrid, São Paulo, Seoul, Tel Aviv and Warsaw.
In another example, the University of Rochester’s Simon Business School relocated last summer to the high-tech urban campus of New York Law School (NYLS), from where the two schools have since been co-located.
Located in Tribeca, the campus leverages from its position in the global epicenter of business and law.
Anthony Crowell, dean of NYLS, says that the move was intended as ‘a unique opportunity to harness the synergies that exist between the two institutions’.
While business school students primarily attend classes on the weekends and law students attend coursework during the week, there is deliberate crossover. Law students receive business education as part of their legal studies, and business school students undertake legal coursework.
And the classrooms, library, meeting spaces, event spaces and other amenities are available to everyone.
The innovative partnership optimises resource utilisation and capitalises on the different schedules and programs of the two institutions.
Kay, who recently relocated to New York, offers a final piece of advice:
"It’s important to keep in mind that boundarylessness achieves success only where collaboration is actually wanted."