March 2014

Pre-competitive Agreements

Corporations are the fastest diffusion mechanism we have to shift global consciousness.

Pre-competitive agreements, within industries, are perhaps the greatest leverage point we have to rapidly change the world we live in. By making pre-competitive agreements amongst peers and along distributed supply-chains within industries, we can create the new ground for a playing field/marketplace that is more reflective and responsive to current global conditions.

Pre-competitive agreements seek to address the underlying root causes of social, cultural, and environmental issues. The business case for pre-competitive agreements is threefold: efficiency, in terms of reducing waste and costs; growth, through increasing brand appeal and preference for a company’s products; and long term risk mitigation, that is avoiding supply security risks by supporting the health and well-being of those people in the supply-chain responsible for product assembly, and for the cultivation, production, and harvesting of valuable commodities.

While a relatively new phenomena in the general business world, they have been used for years in bio-tech in order to share research and speed time to market for pharmaceuticals. Recently, there have been pre-competitive agreements amongst salmon farmers and fisheries in which 70% of the industry signed-on to the Global Salmon Initiative;  and amongst the clothing industry in which 53 companies signed-on to the Sustainable Clothing Action Plan.

In another example, there was a successful pre-competitive agreement made between wholesale cacao consumers, to insure the health and well-being of cacao farmers and their families, while also insuring the sustainability of the environments where they live and farm. Mars was the keystone company responsible for convening the group and as an outcome, committed to 100% sustainability by 2020.

Typically, the agreements are driven by a scoping exercise between competitors to identify what is competitive advantage (off the table) and what is pre-competitive (on the table) in order to ensure survivability and sustainability. The second step is the facilitation of collaborative action around a common set of goals.

For instance, in the Global Salmon Initiative the main areas the pre-competitive agreement focuses on is knowledge sharing with regards to feed and bio-security. Sustainable Clothing Action Plan focuses on commitments to metrics for reducing carbon reduction, resource usage, and waste.

Here is a link to a thoughtful article about sustainability as a precompetitive issue.

This is a link to a second article on precompetitive initiatives in the cacao industry.

Another on the Global Salmon Initiative.

And yet another on the Sustainable Clothing Action Plan initiative in the clothing industry.

I am very interested in this opportunity space. It requires a truly multi-disciplinary team to be successful. I would like to hear people’s experiences, thoughts, and interests with regards to an offering in this area.

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