Thursday, April 6, 2017

Where Does Collaborative Value Come From?


When it comes to the creation of value, not all collaborations are equal, as the Collaborative Value Creation (CVC) Framework reveals. The framework helps us understand how value creation can change as the partnering relationship evolves through the four stages of the Collaboration Continuum: philanthropic, transactional, integrative, and transformational (Renz 2016). The increased potential for value at each stage coincides with changes in three drivers of value: alignment, engagement, and leverage (Renz).

The philanthropic stage is the most common and traditional type of relationship (Austin 2003). The Timberland-City Year relationship started this way in 1989 when the youth service organization requested and received a donation of 50 pairs of boots from Timberland. Given the shared goal of community service, the relationship evolved into the transactional stage where Timberland employees were mobilized to participate with City Year in community service events. Key benefits of the synergism between the partner’s resources were increased business and visibility. In 1994, the collaboration evolved into a strategic alliance that included integration of the vision and values of both companies and the formation of a joint enterprise to create the City Year Gear product line of apparel and gear. In this integrative stage, the missions, strategies, organizations, and resources merged, and the collaboration took on the characteristics of a joint venture (Austin). While integration has much greater strategic value, it is more complex to manage than other forms of collaboration (Renz). In this case, an added complexity was the potential conflict of interest of the CEO of Timberland serving as the chair of the non-profit’s Board of Directors. Yet, the multifaceted form of engagement in this partnership points to a deeper commitment that will help to sustain the collaboration through challenges (Renz), including the financial setbacks that both entities experienced in 1994. 

While geared toward the nonprofit-business relationship, the Collaboration Continuum can also provide insights about the generation of value in nonprofit-nonprofit and nonprofit-government collaborations. 

The Seattle Art Museum-Housing First relationship, for example, was a nonprofit-nonprofit transactional collaboration. The organizations determined there was mutual benefit in cooperating on the “Citizens for a Better Seattle” capital campaign, rather than compete for project votes at the ballot box. The strategic importance of this relationship is limited to alignment on a single activity, though considerable value was derived from the ability to leverage available resources and assets. Increasing the strategic value of the partnership is hampered by mind-set of the partners, namely the lack of trust among housing advocates for their museum partners.     

On the nonprofit-government front, La Alianza Hispana, a “self-help alliance for Hispanics” is confronted with a take-it-or-leave-it contractual proposition from the Massachusetts Department of Social Services (DSS). Namely, the current transactional collaboration around the provision of “soft” services, would be replaced with a higher dollar value collaboration around the delivery child protection and case management services. In this case, an examination of value drivers points to the conclusion that La Alianza would be well advised not to enter into the proposed collaboration due to a lack of alignment on mission and lack of resources. While these challenges could potentially be overcome, we are told that DSS is limited in its ability to help La Alianza measure up to contractual expectations and that the DSS' proposed rate would not adequately cover legal and other overhead expenses.  

In summary, it is useful to consider how the stages in the Collaboration Continuum exhibit differences in strategic value, engagement level, importance to mission, and resource deployment (Austin). The organization’s stance on these strategic aspects can provide an important guide in organizational decision-making relative to the current and potential value of a collaborative relationship.

References

Renz, David O. The Jossey-Bass Handbook of Nonprofit Leadership and Management (Essential Texts for Nonprofit and Public Leadership and Management) 4th edition, 2016.

Austin, J. (Summer 2003). Strategic Alliances: Managing the collaboration portfolio. Stanford Social Innovation Review. Retrieved from: https://ssir.org/articles/entry/strategic_alliances

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