Benefit by Befriending the Competition

Cozying up to the competition may seem counterintuitive, but a growing body of evidence seems to indicate that—at least in some cases—it works. Competing CEOs who are friends become more successful leaders of their companies.

Charles O'Hearn, CEO of Summit Educational Group, a Boston-based tutoring firm, found that his friendship with at least one competitor has boosted his company.

For the last 10 years O'Hearn has cultivated a friendship with Lisa Jacobson, the CEO of New York-based Inspirica, one of his competitors. While he doesn't share every detail of his business, being buddies with Jacobson has given him a sounding board for problems and helped him get a handle on emerging business trends.

Jacobson is a good CEO, and O'Hearn sees that as a positive feature of their friendship. “I like playing with people who are better than me,” O'Hearn says. “That makes me a tougher competitor.” And, he figures, if Jacobson bests him at something, at least he can call to find out how she did it.

O'Hearn and Jacobson may be on to something. Kaihan Krippendorff, a professor of entrepreneurship at Florida International University believes that competition isn't the name of the game. Krippendorff analyzed 400 business case studies and found that business people who felt they were in business to knock off the competition were less successful than those who sought instead to maximize profits or increase corporate value.

So keep your business secrets close, but remember: A friendly competitor may just be able to give you insights that an “enemy” never could.