Collaboration — key in high-risk environments

2019-04-18T11:04:38+00:00 April 18th, 2019|Risk Management|

In a business landscape of increasing complexity, uncertainty, and sociopolitical conflict, well-managed collaboration is the key to unlocking growth and allowing organisations to thrive in difficult environments, writes Professor Brian Ganson.

In 2011, when the Arab Spring erupted in Egypt, business suffered — with the effect being felt all around the world, according to a report by Grant Thornton. But some, like multinational food giant Danone, continued, strangely, to thrive despite the political and social turmoil.

How did they buck the trend? Danone’s success in difficult circumstances was due to strong relationships with the surrounding communities who were their milk suppliers. They survived a revolution because they had invested in good relationships and sophisticated business arrangements within the local community.

These kinds of solid relationships are increasingly important in a world of rapid and unpredictable change. “It is becoming increasingly difficult for companies to mitigate risk and unlock opportunities in challenging environments and unfortunately, complex environments are becoming more universal.

Even when companies are trying to do the right thing, political, economic, and social conflict — related or seemingly unrelated to the company’s operations — can have devastating consequences for business. Consequences include costly disputes with communities and unions, reputational damage, and labour unrest, which can result in major infrastructure projects being slowed or stopped.

Well-managed collaboration and conflict resolution are essential to mitigate these risks, not only in times of crisis, but as an integral part of meeting the company’s operational, financial, legal, reputational, and social goals. This also holds the key to unlocking opportunities in difficult places.

This type of stakeholder engagement has also proven to be an essential element of market expansion. For example, the milk processing and packaging company Tetra Pak saw enormous success in Bangladesh through support for dairy hubs that worked in collaboration with local processers and farmers, instead of investing in large-scale commercial farms.

Tetra Pak created an entire dairy business out of nothing and the lynchpin was extremely well-structured stakeholder engagement. The dairy hubs provided free support and education to local small-scale dairy farmers, increasing their assets and production. Between 2010 and 2012, more than a thousand farmers, who may previously have had one or two cows, were in a position to own 10 cows and rely on milk production as a primary source of income. This model of collaborative investment provided a sustainable solution for long-term growth and profitability.

Collaborative investment and collaboration, simply speaking, are low-cost and high-return. True company-community collaboration involves treating communities with dignity, in a way which empowers them, and lets them increase their agency in their own lives.

In my book, Management in Complex Environments, I combine analyses, case histories, and reflections from business leaders on how to navigate the risks and challenges of doing business in difficult places and show how it is possible to thrive and secure growth and stability.

What we find is that it is really difficult to unlock opportunity in difficult places. Companies are often struggling to do the basics well. The first step when dealing with complex sociopolitical environments is to assess and analyse the landscape. The more complex the environment, the broader the landscape seems to be. Only once we have a good picture of the landscape — how all the players and pieces relate to one another — can we come up with a cogent plan of action.

After analysis, suddenly we see that there are paths forward, when all we saw before were walls and blockages. The mediation course draws on extensive experience and research to teach the necessary analytical tools and then offer a practical operational approach to go about taking constructive action. We show people what good conflict resolution looks like, so they can actually go and do it.

About the author

Professor Brian Ganson is the convener of the Advanced Training in Company-Community Collaboration and Conflict Resolution in Complex Environments course at the UCT Graduate School of Business (GSB).

To find out more about the course, visit  UCT Graduate School of Business (GSB)