Co-opetition: Working with the Enemy

by Jessica Lipnack and Jeffrey Stamps

ASID Report, January/February 1996

American Society of Interior Designers

The design community faces a dilemma common to most small businesses. In a world of rapid change, new technology and fierce competition, small firms can try to go it alone, tough it out solo in hard times and only do projects that you can carry out completely by yourself. Or, you can consider another route, one which might appear a bit riskier - working with other firms while still retaining your autonomy. That can even include working with your competitors, a practice that ASID's 1994-95 president Gary Wheeler, FASID of The Wheeler Group deliberately uses to strategic advantage.

Instead of only competing with his Minneapolis arch rival, Shea Architects, Wheeler finds ways for the two firms to work together. Informally, the principals of the two companies, Gary Wheeler and David Shea, meet every few months to talk about their businesses; formally, every few years, their companies do a project together.

"It's perfect co-opetition," Wheeler said. Co-opetition is the word coined to describe how firms alternate between cooperation and competition. Depending on the specific opportunity, firms can choose one or the other. "They're our biggest competitor and when we lose to them, I'm upset but not angry. They are also people we highly respect. It's good competition instead of bad competition."

And when they work together, it can be very powerful. Having now done several projects together, including "a great restaurant, Patty's" and a St. Paul law firm, their most successful project to date came at the request of the client.

Wheeler had done the corporate headquarters for Wilsons, an international suede and leather retail store division of Melville (which also owns Tannery West and Snyders, both leather stores) with approximately 580 stores across the U.S. Now Wilsons was facing its next challenges - how to reach its target market through the new stores it planned to roll out. Dissatisfied with the prototype designs produced by the New York designers theyíd used in the past, Wilsons came to Wheeler.

"Paul Tomlinson, (then) their vice president of marketing, approached me and said, 'I have an unusual problem. I also admire the work done at Azur'," Wheeler explained. This very famous Minneapolis restaurant had been done by Shea Architects. So to test the possibility of the two firms working together, Tomlinson invited Wheeler and Gregory Rothweiler of Shea Architects, who had designed Azure, to dinner - at Azur. They talked about the restaurant and its design as a whole.

"Paul was really testing whether we could work together,î"Wheeler recalled. "Toward the end of the meal, Paul turned to Gregory and asked if we would work together. Gregory said, 'Sure, sure, I'd be happy to'."

And off they went to do the prototype design for the new store. But it wasn't just any little prototype they were designing. This one was for the still-to-be-opened Mall of America store of 12,000 square feet, three, four and six times larger than their typical stores. "We had to come up with a flexible plan that could be adapted by the client with Shea's help over time," Wheeler said. "The first really big obstacle was to make sure that there was no competition during and after the project because the dollars could be quite large."

But there was no fight about dollars because they spent their first meetings clarifying roles over the life of the project. "We divided the project into two phases," Wheeler said. His group was responsible for design development and Shea was responsible, as the architect of record, for construction documentation. "We knew that our role would go down and theirs would increase as the implementer. We would come back in on an occasional basis. That was predetermined and not a surprise. There was no jockeying for position and we weren't trying to keep the client. We both knew what our roles were."

The next obstacle was working out what Wheeler calls "a true team relationship as opposed to the traditional architect and designer in which someone works for someone else." An added complication was rivalry within Wilsons. Would their own construction and design people be involved or was it marketing driving this? In the end, it worked, Wheeler said, because everyone worked to keep everyone else informed. "We overcame our frustrations by being very honest. If we felt like someone wasn't holding up their end of the deal, we talked about it," Wheeler remembered. "Our offices are only a couple of blocks apart and we would go there and they would come here a lot. It was almost like I had a desk there for a while." The vast majority of communication was face-to-face, with a great deal of faxing back and forth as well.

Critical to the project's success, Wheeler believes, was the fact that the same original people remained with the project from the beginning: Tomlinson, Rothweiler from Shea, and Wheeler. The teams expanded out from there in each company at all levels "from the CAD operator to the most senior person. We had constant involvement at all levels and we actually came in on budget," Wheeler said. The reasons that he cites for this project working are critical to any successful undertaking that companies pursue together:

1. the purpose has to be clear and mutually agreed upon;

2. each organization has to maintain its autonomy;

3. there has to be lots and lots of communication and good relationships among the people;

4. roles are clearly defined with leadership shared over time;

5. people at all levels of the companies have to be involved.

With these simple principles, any group of companies can work together.

The last time we saw Gary Wheeler, he was sitting across the table from Janice Linster, another principle in Shea Architects, at a roundtable luncheon with a dozen other leaders of the architecture and design communities in the Twin Cities sponsored by Dayton's Interiors, a Minneapolis dealer. Their topic? How to work together better. Co-opetition is reaching out to the larger community.