Company partnerships

Why more companies need to break their antisocial tendencies

June 16, 2011: 12:01 PM ET

Businesses that are more open about how they work with other companies stand to benefit immensely from unexpected discoveries and partnerships.

By John Hagel III and John Seely Brown, contributors

William and Victor Fung

William and Victor Fung

FORTUNE -- Behind many of the labels on clothing we buy in stores throughout the world, there is a company few know about -- Li & Fung. This company, based in China, runs a global supply network for the apparel industry that includes more than 10,000 business partners.

It is not just the scale and diversity of this network that is impressive. If you ask Li & Fung's business partners why they are part of this network, the top reason they offer is that they learn faster as part of this network than they ever could on their own or as part of any other network. Li & Fung understands that helping their business partners improve is a key to building a sustainable advantage in an extremely competitive industry.

Two brothers -- Victor and William Fung took over the family business in the mid-1970s and began to transform it into a sophisticated organizer of a vast, global network of companies. Li & Fung has enjoyed a sustained history of double-digit growth in a traditionally low growth business.

The company's transformation largely stems from its decision to hire a cadre of former managers of apparel manufacturing plants. These folks could do a 15-minute walk-through of a manufacturer and tell you exactly what the plant could do, even if the manager was claiming otherwise. More

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