How Uber, Adidas, and Tesla Use Strategic Relationships To Get Ahead
Two brains can be better than one. Some of the most successful companies evolve by forming strategic relationships with other innovative minds.
“Even the most progressive companies are forced to constantly think about the evolution of their business,” says David Nour, author of Co-Create: How Your Business Will Profit From Innovative and Strategic Collaboration. “They know what got you here won’t get you there. Strategic relationships allow companies to rethink their businesses and their evolution.”
The important word is “strategic,” says Nour. “No one builds relationships because they’re bored,” he explains. “They’re created because nobody has all the answers. The collaboration is to make the end result different–smarter, stronger, faster. It happens when you both have a vested interest in each other’s success.”
Relationships With Other Companies
Strategic relationships with other companies are different than partnerships, says Nour. “Partnerships are transactional,” he explains. “Strategic relationships are transformational. You create something you wouldn’t be able to do by yourself.”
Hilton and Uber recently joined forces to cocreate value in the hospitality industry, says Nour. Hilton had hung a lot of pride on the fact that it was the first hotel brand to place color televisions in rooms and offer room service, but executives realized that these things aren’t important to the millennial audience. The company had to think beyond its walls.
Recognizing Uber’s growing market reach, Hilton created a new service that presets the hotel as the recommended destination on the Uber app. “By joining forces, the two companies are cocreating value when none previously existed,” says Nour. “In other words, the space between a hotel and various events or between the airport and the hotel used to be a bit of an anonymous wasteland. But now it is becoming a seamless extension of both brands.”
Hilton’s guest satisfaction is no longer limited to the experience inside the hotel property; it is deeply linked to the outcome that brought the guest to that hotel location. Uber is getting the opportunity to be the transportation provider to events and activities outside of the hotel.
Relationships With Employees
Strategic relationships can also happen between companies and their employees. In 2015, Adidas decided to challenge its business model, with its new CEO, Mark King, asking employees for their best ideas to move the brand forward. Nearly 500 viable projects were proposed, and the winner was an idea that included three simple words: Netflix for runners.
A year later, Adidas launched Avenue A, a subscription service for runners that delivers a box of items curated by well-known runners, such as fitness instructor Nicole Winhoffer.
“Adidas’s Avenue A took them way out of their comfort zone as a sports apparel and footwear company and into curated, cobranded merchandising where those curators do not work directly for Adidas but bring their own leading-edge brands to the table,” says Nour. “This activates an army, and now Adidas is taking curation to other parts of their business.”
The success of forming strategic relationships with employees also prompted Adidas to create the Adidas Group Innovation Academy, an online learning platform that encourages employees to be more creative and invites them to submit more ideas. After 1,000 employees had passed through the academy, Adidas announced a Shark Tank-like competition to choose more winning ideas.
“This is CEO King putting his money where his mouth is, while at the same time ensuring that the right risks are being taken and firing up employees around the world,” says Nour.
Relationships With Customers
Tesla has evolved its company by being deeply aware of the customer experience and forming relationships with drivers, says Nour. In September 2015, the company launched its Model X, an electric sports utility vehicle that also competes with traditional SUVs on the interior space and amenities. But the design of its doors is where the Model X leaves iteration in the dust, says Nour.
“Every facet of the design of this car takes into consideration all the complaints about today’s minivans and SUVs,” he says. “The falcon-wing doors solve several of those with amazing elegance.”
For example, buyers with children need to install car seats in the second row, which makes the third row of seats nearly impossible to access. Parking in tight spaces is also challenging to buyers who need to help their children out of the car.
“The Model X’s falcon-wing rear doors rise up and fold out of the way,” says Nour. “While Tesla obviously has bright engineers, I suspect that the company is actively cocreating its future with its customers, anticipating their needs and innovating radical, effective solutions.”
How To Form A Strategic Relationship
To form a strategic relationship with another company, your employees, or your customers, you need five things, says Nour.
1. Strategic thinking. Strategic relationships aren’t simply about iteration, says Nour. “Too often, companies innovate by coming up with a better product, new color, or new flavor,” he says. “They’re doing the same thing a little bit better. Few companies do that intuitively well, but fewer do disruption. That’s about new things make the old things obsolete.”
“Forget five to 10 years’ strategic plan; it’s impossible to predict that far,” says Nour. “You can forecast the next 18 to 36 months. How do we need to behave differently to succeed to the next chapter?”
Nour suggests asking yourself, “If I’m your biggest competitor, how will I disrupt you?” “If you don’t disrupt yourself, someone else will,” he says.
2. A visionary leader. Great companies start with visionary leaders who challenge the status quo, not defend it, says Nour. “Business has to evolve and fundamentally change,” he says. “We don’t admit that we don’t have all the answers.”
This can be scary because when you cocreate, you give up part of yourself, says Nour. “It’s intrusive and invasive, and it’s not for just anybody,” he says.
3. Another party. Find another party that can bring a unique perspective or lens around common mission, vision, or enemy. “Who has a vested interest in your success?” says Nour. “Who will dramatically benefit? Who can bring a very different part?”
Each party needs to bring a piece of the puzzle and together create something that’s different.
4. Executive buy-in. “If reinventing business isn’t one of the top three priorities of senior leadership or board, it becomes somebody’s pet project, and the rug will get pulled out from under it,” says Nour.
5. Someone who owns the execution. Someone has to be in charge of the project, identifying what works and creating a prototype. “Be realistic about your resources,” says Nour. “How much time will this take? What does the strategic relationship need to think and execute? What are your milestones and metrics? Then how do we take it to market?”
A lot of great ideas die on the vine, says Nour. “Progress trumps perfection every time,” he says.
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