Keep Your Enemies Close: When to Suck It Up and Partner with Competitors

More than ever, companies that compete for work on most occasions are combining forces on other projects. If you’re not doing it yet, you will be. Here’s how to make it work for you, your competitor and, most importantly, the client.

It wasn’t long ago that the idea of working with your competitors was a foreign or taboo subject for most business owners. But these days, some of the biggest names in the integration world have decided to set aside their differences and partner on some of the industry’s largest and most complex projects.

While some companies have been quietly working with their rivals for years, anecdotal evidence suggests the phenomenon has gained serious steam in the past five to 10 years. CI broached the topic with several integrators, who revealed why they engage in such collaboration efforts and how they effectively capitalize on this seemingly antithetical process.

“Having a good relationship with the competition helps to keep local business local,” says Victor Valliere, COO of TPI, which partnered with longtime cross-state rival and CI 2013 Integrator of the Year CCS Presentation Systems on a $4 million bid package at Arizona State University.

“We knew the project would attract outside interest from other states. We knew if we went in together, we could keep everyone happy,” he says.

Because CCS was dealing with an extended backlog at the time, the firm hadn’t been planning to put together a package for the ASU project, says CEO and founder John Godbout.

“Neither company could’ve handled it singularly very well,” he says. “By doing what we did, we felt like we offered the best solution. If we win a [job as large as the ASU project] on our own, we’d be anxious to do it and anxious not to do it. We knew we wouldn’t be the least expensive option, but we wanted to get in front of the client.”

“Neither company could’ve handled it singularly very well,” says CCS Presentation Systems’ John Godbout of a recent project bid collaboration. “By doing what we did, we felt like we offered the best solution.”

Certainly CCS and TPI aren’t the only competitors who decided to put their differences aside and think first about the best interests of their clients. Spinitar is among the companies with the longest history of working with its competitors, dating back more than 20 years, when principal Jay Rogina and his firm worked with Cibola Systems. These days, La Mirada, Calif.-based Spinitar has projects going with several companies across the U.S. and around the world.

“We average one every other week,” says Rogina. “Some [competitors] are very nervous and want a nondisclosure agreement; some are worried you’re going to take their customers.” But in counting well-established names such as HB Communications, Verrex, McCann Systems, Vistacom, Technical Innovation and Diversified Systems among its competitors/partners, Spinitar has built a level of trust with many companies.

“We’ve had enough conversations over the years that we personally trust each other. You don’t want to work with anybody who’s not at the same level of quality or who doesn’t have the same work ethic you do,” he says.

Spinitar and Diversified Systems partnered most recently on a project for Pimco, a large investment firm, in which Diversified outfitted the auditorium and broadcast space and Spinitar took responsibility for 21 floors of conference rooms.

“You’ve got to develop that level of trust,” says Rogina, a former president of InfoComm International. “People get comfortable over the years. The big advantage we have with 30 people in our service organization is in service, with margins on products down.”

Keep Your Enemies Closer

About half of the phone calls NSCA executive director Chuck Wilson fields have something to do with background checks, references and the like on other members as part of a vetting process for potential partnerships, he says. It’s a phenomenon that’s been going on for years, but largely in the shadows.

“What drives it a lot of times is licensing,” says Wilson, meaning some companies have licenses in some states but not in others so they need a partner to give them the ability to expand their reach. “Bonding capacity is another issue. Integrators don’t want to tie up their entire bond amount or most of it on a single project if they can find someone else to share that burden with them.”