Cooperation in Sustainable Business: 4 Key Success Factors

Submitted by Julien Goy and Mathieu Calles

Cooperation, every segment of business seeks it today. But ask what it means, in concrete terms, and the answers are variable, and not always clear. Founded in 1997 on the initiative of ADEME - the French Environment and Energy Management Agency - Club ADEME International brings together over 100 innovative French eco-companies active in the global sustainable development market, mainly SMEs.

A recent study by the World Bank showed that over the next decade, expected investment across 15 clean technology sectors in 145 developing countries will top $6.4 trillion overall. Of that total market, roughly $1.6 trillion will be accessible to SMEs.

What are the key success factors when it comes to reach new markets and team up with new partners? Based on 7 experiences of French consortiums, this article explores the various aspects of cooperation in the business of sustainability.

 

Complementarity

Some of the companies have known each other for a long time before deciding to tackle the markets together. But a partnership agreement can also occur as a way of seizing an opportunity. "When Phénixa - the Moroccan subsidiary of BURGEAP - contacted us, they had a very specific need", says Samuel Tochon-Danguy, who works for Lasa, an acoustics and vibrations consulting firm, "they wanted to respond to a tender, and the project included a section related to acoustics. We had never had contacts with Phénixa prior to this project." This did not prevent the consortium to win the bid and work on the first tramline of Casablanca.

How do you determine which member of the consortium will be in charge? Evidence show that a lean, horizontal organization with shared responsibility between members can not only avoid slow decision-making process, but also triggers a greater involvement and an increased sense of responsibility.

 

Local needs

In order to succeed when trying to gain new markets abroad, one needs to understand the demand, and gather first-hand knowledge: "You need to be able to understand how to make business, according to the country or the region in which you work", says Jean Henin, CEO of Pellenc ST, a company working with Vauché Group on waste recycling projects. Through cooperation with a partner who already has a knowledge of this market, a company can save money and time. Sardar Azimov - from Cerway, a company resulting from a partnership between Certivéa and CERQUAL - stresses the necessity to be close to the local needs, in terms of visibility, credibility, and reputation.

 

Group dynamics

Mixed experiences, skills and know-how can result in brand new ideas and working methods. "Working as a consortium allowed us to create a prototype of our product - a thermodynamic micro solar plant - currently based in France." Says Jean-Noël de Charentenay, Business Development Director at Exosun, member of the Microsol consortium. "The next step is to build a similar prototype in an African country."

Cooperation is a powerful means to maintain a capacity for innovation, adds Karine Léger, from Airparif, Air-China consortium. It has developed an integrated offer that provides a real added value that is greater than the sum of its parts. One of the other advantages to form a consortium is that it places the French eco-companies on an equal footing with their competition. Julien Le Roux - who works for BERIM, member of Archetype Environment, a consortium active in South East Asia - stresses that Anglo-Saxon companies focus on their capacity to manage a project from A to Z, with a one-stop shop approach. However, says Michel Raoust from UMO (Union de Maîtrise d'oeuvre) - consortium regrouping engineering companies covering all types of expertise for sustainable cities - this implies that they can lack expertise in various areas. A consortium, as a group of diverse companies, each with their specific skills, can offer excellence in every area of a project.

 

Critical Size

In a consortium, new opportunities become available to the eco-companies. Indeed, creating a consortium allows SMEs to attain a critical size. This size is vital in terms of credibility, trust and access to major clients. When a market is not mature and most aspects such as contractual, legal, insurance, quality control, etc. are not developed enough, which is often the case as regards sustainability in developing countries, you need to demonstrate this critical size in order to earn your clients' trust.

But trust works both ways. The members of the consortium can easily share information about how to respond to a call for tender: What are our strengths, our weaknesses? What do we know about the competition? Can we trust the client?

 

Conclusion

Opportunities in the BRICS and developing countries are numerous for an eco-company, especially if one is wishing to team up with other eco-companies. There are 4 key factors that can lead to success: complementarity; deep understanding of the local needs; group dynamics; critical size.

It is central to stress that the 4 key success factors have to be balanced. Companies need to understand that they have to be addressed on an equal basis. By doing so, even small and medium sized eco-companies can reach new markets abroad and make a difference.

This is where the Club ADEME International provides invaluable help, by supporting collaborative projects among its members, by facilitating networking and by capitalising on the experience of successful cooperation.