Your Business Can’t Survive Alone: How Smart Partnerships Keep SMEs Competitive

For SMEs, supply chain disruptions can make or break a business. Recent crises, from the COVID-19 pandemic to geopolitical instability, have exposed vulnerabilities in rigid supply chains and the past few years have shown that no business operates in isolation. The COVID-19 pandemic and its aftermath, the Russia-Ukraine conflict, and inflation-driven economic volatility have exposed the fragility of supply chains and the risks of working solo. Companies that relied on a single supplier or a rigid partnership structure found themselves scrambling. 

So, how can SMEs build resilience, ensuring they can weather challenges and continue growing? The answer lies in smart partnerships and networked collaboration.

SMEs collaborating in a networked ecosystem (AI-generated with DALL·E)

Why Strong Partnerships Are Critical for SMEs

For SMEs, strong partnerships improve flexibility, efficiency, and market access. Companies working together can share resources, balance workloads, and support each other during disruptions.. Strong partnerships allow companies to:

• Diversify risk – Partnerships enable SMEs to distribute tasks efficiently. For example, small textile manufacturers specializing in fabric production, dyeing, and stitching collaborate to ensure continuity when disruptions occur.

• Increase agility – SMEs can quickly adjust operations by sharing distribution and logistics networks. Independent food producers, for instance, support each other during shortages to keep products available to customers.

• Share resources and expertise – Pooling skills, technology, and infrastructure leads to efficiency and innovation. For instance, small manufacturing firms that collaborate on joint warehousing can reduce overhead costs and improve delivery times.

• Boost credibility and market access – Some SMEs may have limited capacity to fulfill a large order. Partnerships can open doors to new markets, customers, and funding opportunities. 

But not all partnerships are created equal. Many businesses fail to select the right partners, leading to inefficiencies, misaligned goals, and wasted investments.

The Advantage of Collaborative Networks

Businesses that engage in collaborative networks create resilient ecosystems that allow for flexibility, risk-sharing, and joint problem-solving. But today’s most resilient businesses adopt a more flexible, Collaborative Networked Organizations (CNOs) approach, dynamic alliances that function as an interconnected ecosystem rather than isolated entities.

CNOs take partnerships to the next level by fostering adaptability and resilience. During the COVID-19 crisis, companies with collaborative business models fared significantly better than those with rigid structures. For example, businesses that proactively engaged in shared logistics or flexible sourcing arrangements were able to maintain supply continuity despite widespread disruptions.

• Creating redundancy – If one partner struggles, another can step in. For example, during the semiconductor shortage, automakers that had partnerships with multiple chip suppliers (such as Toyota) were able to continue production, while those relying on a single supplier (such as Ford and General Motors) faced prolonged delays.

• Enhancing innovation through collaboration – Partnerships allow SMEs to co-develop new products, services, or processes. For example, in Switzerland, the National Centre of Competence in Research (NCCR) has created a collaborative environment for robotics startups under the 'Swiss Robotics' umbrella. Through shared resources, joint projects, and industry events like Swiss Robotics Day, these startups accelerate technological advancements that none could achieve alone.

• Considering risk proactively – Factoring in force majeure events like a pandemic or war before their impacts become global. Amazon, for instance, expanded its network of warehouses and delivery partners to reduce dependency on any single location or supplier. This strategy allowed them to continue operations smoothly even when certain fulfillment centers were affected by disruptions like COVID-19 lockdowns.

Building Smarter Partnerships for Long-Term Growth

Choosing the right partners involves assessing strategic fit, risk preparedness, and decision-making frameworks. In my research on sustainable partner selection in CNOs, I found that businesses that integrated risk assessment alongside economic, social, and environmental factors in their partner selection process were significantly more resilient. Look for partners with complementary strengths, contingency plans, and structured evaluation methods to ensure sustainable collaboration.:

• Assess Compatibility & Strategic Fit – Look beyond financials. Do you share values, long-term goals, and complementary strengths? Ideal partnerships should avoid direct competition and instead leverage unique capabilities that create synergy. For example, a precision machining SME partnering with a robotics integrator allows both to benefit; one gains automated efficiency, while the other expands its market reach by tailoring solutions to a new industry.

• Evaluate Risk & Crisis Readiness – Can your potential partner withstand supply chain disruptions, financial downturns, or regulatory changes? Assess their financial stability, operational agility, and contingency planning. Look at their history, how have they handled past crises? Do they have backup suppliers, alternative distribution channels, or robust risk management strategies? 

• Leverage Multi-Criteria Decision Making (MCDM) Methods – Instead of making decisions based on gut feelings, use structured frameworks like MCDM approaches to evaluate and rank partners based on multiple factors, such as financial stability, operational efficiency, risk management strategies, technological capabilities, and alignment with long-term business goals.

Strengthening SME Supply Chains Through Collaboration

For SMEs, networked collaboration is key to supply chain resilience. The ability to pivot, share resources, and support one another enables businesses to navigate disruptions and seize new opportunities. 

If you run an SME, now is the time to assess your partnerships. Are you too dependent on one supplier? Do you have backup options? Are you part of a network that can support you during disruptions? Do they provide agility, shared innovation, and crisis resilience? If not, consider how networked collaboration can strengthen your competitive edge.