Cross-sector partnerships are here to stay

McDonald’s staffing employees at Aldi to help support customer increase, UberEats delivering Carrefour products to customers’ doorsteps, IKEA selling products through Alibaba’s Chinese e-commerce platform Tmall or JBC allowing local entrepreneurs to set up shop in their stores. These are just some of the examples of cross-partnership collaboration that have emerged over the past few months.

Although they've become more common in recent years, the number of cross-sector partnerships now truly skyrockets because of COVID-19. But what is the added value? What’s to gain for both partners? And how do these partnerships affect the customer experience? In our latest Beyond Digital, the knowledge-sharing discussion club organised by digital transformation guide Ariad, we discovered it’s all about achieving more together than alone. This thought-provoking session was led by member Bram Vromans, CIO & Country Digital Lead for IKEA.

(Want to join in next month's discussion? Sign up to join Beyond Digital, our knowledge-sharing club connecting Belgium's most ambitious digital minds.)

A shared goal

For quite some time cross-sector partnerships have existed where alliances of individuals and organizations from nonprofit, philanthropic business sectors or the government (public-private partnerships) use their diverse perspectives and resources to jointly solve a problem and achieve a shared goal. Also, cross-industry collaboration is about collectively seeking opportunities for differentiated value propositions in order to target customer segments that may not have been accessible before. Maybe one of the more known examples is the partnership between the French government and private companies such as Sanef and ASF to build and mantain the French national highways.

“The challenges of our time present an opportunity to co-create changes and new outcomes. As such, in the search for solutions, COVID 19 has become a catalyst for cross-sector partnerships, a concept of which companies and organizations have now come to understand the benefits more than ever,” says Vromans.
 

All shapes and sizes

Cross-sector collaboration leverages differences in resources, experience, demographics, industry and sector, as well as differences in perspective, such as assessments of risk, time and scale. So of course, these partnerships come in all shapes and sizes: technical or strategic, structural or temporary… Yet each kind brings a unique value to both the partners as well as the customer.

Some partnerships entail a personnel exchange. A fine example were the idle McDonald’s employees staffed at Aldi to help support the sudden increase of customers when the coronavirus first hit. In other partnerships, retailers sell the products of another retailer, like Decathlon offering Carrefour bio food in-store. The sports retailer doesn’t have bio food in their product range, but by offering that of Carrefour, they create more business for themselves, provide a wider offering for their customers of whom they know like to stay fit and healthy and support the supermarket in the process. Other cross-sector partnerships are about co-launching products, such as Ikea and the Lego Group introducing Bygglek, a creative product solution that combines play and storage. In doing so they open new markets and attract new target audiences.

How to develop cross-sector partnerships

But how do you establish a strong cross-sector collaboration? Here are 5 steps towards building successful partnerships:

1. Understand the issue
   Explore your customer journey to determine where partnerships can be linked. Define your major needs but also your own strengths to look for complementarity in the strengths of possible partners.
    
2. Know and respect your partners
   Understand your partners’ resources and values, as well as their limitations and challenges. Be open-minded and transparent about your own limitations.
    
3. Start small and scale up
   Sometimes a partnership appears to be a match made in heaven, but trying to sell it internally holds back implementation. So don’t start company-wide, but with a coalition of the willing to take a broad approach afterwards. Build trust, do a lot of testing and adjust the partnership’s operationality and arrangements on a smaller scale before moving to more ambitious plans. Understand that it’s a marathon, not a sprint.
    
4. Co-create a partnering agreement
   Establish clear roles and responsibilities along with objectives and a decision-making structure, ensuring proper accountability and efficient delivery.
    
5. Ensure strong communication
   Strong communication is key both within the partnership and externally to generate success and continue to build buy-in with other stakeholders.

Win-win

“In the end, cross-sector partnerships are about achieving more together than alone. Achieving more for each other’s businesses, but also for the customer,” says Vromans. Whether the partnership entails a personnel exchange or the offering of products of another retailer, the impact on the customer experience is always for the better. A faster service, a wider array of products, attractive discounts or promotions, customers always benefit from cross-sector partnerships. As such, it’s a win-win and for that reason cross-sector collaboration will without a doubt be embedded as a viable business strategy for companies in the future.
 

Curious how this topic and others will develop into the future? Join the Beyond Digital LinkedIn community and sign up to join in the next session.