Collaboration Strategies<br />“People working together to solve a common problem”<br />
Bounded Innovation<br />Jeffrey Phillips describes several ways to “bound” the innovation process in order to improve its focus and productivity in relation to an organization’s strategic objectives. These approaches include:<br /><ul><li>Inside out technology approach</li></ul>Start with what you are good at and build out from there. <br /><ul><li>Concentrate on unmet or under met customer needs</li></ul>Study your customers and develop something new to meet their needs.<br /><ul><li>Project the future and anticipate trends</li></ul>Define a future state for your market or customers and focus on innovations that support that future state.<br /><ul><li>Disrupt an existing market </li></ul>This approach can have high risk and high payoff; to work for you, you must be able to take advantage. <br />
Technology enabled collaboration<br />The prime interest is in accelerating the various processes that make up such programmes, especially the processes involved in idea creation and innovation. We can include in “technology enabled collaboration” the variety of communication or information management technologies that make it possible for people to:<br /><ul><li>discover common interests
exchange information about those common interests
build and maintain personal and professional relationships over time that reflect those interests</li></li></ul><li>Challenges<br />The challenges involved in managing collaborative processes using such technologies can be significant in the context of govt. funded R&D programs that involve many different types of organizations:<br />1. The different people and organizations involved may not be accustomed to communicating or collaborating to accomplish common objectives.<br />2. Competing business objectives may exist among these different groups. <br />3. Voluntary participation by the private sector can be an important factor in driving success of a govt. supported R&D programmes. <br />
Collaborating to promote innovation<br /><ul><li>People from different backgrounds and organizations need to work together, pick each others’ brains, and bounce ideas around. Breaking down barriers that prevent people from communicating, making it easier for people to discover others with common or complementary interests, and then building personal and professional relationships that foster ongoing idea exchange, all seem to be good ways to promote innovation.
Fortunately, technologies that allow people to communicate and collaborate are rapidly evolving. Social media and social networking technologies that allow people to rapidly establish and maintain communications that bypass traditional organizational and professional boundaries represent a significant source for collaboration and innovation opportunities.</li></li></ul><li>A significant portion of innovation arises not from any single individual or organization, but instead from the collaborative efforts of multiple individual or organizations. <br /> Collaboration can often enable firms to achieve more, at a faster rate, and with less cost or risk than they can achieve alone.<br />
Reasons for Going Solo<br />A firm might choose to engage in solo development of a project for a number of reasons.<br />Availability of Capabilities<br />Protecting Proprietary Technologies<br />Controlling Technology Development and Use (retaining complete control over the firm’s technology development and direction)<br />Building and Renewing Capabilities (develop new skills, resources, and market knowledge)<br />
Why for collaboration?<br /> A firm may choose its technology mix by means other than internal innovation. This may happen for a variety of reasons such as:<br />The firm’s product line is quickly falling behind that of its competitors.<br />A new competitor enters or is about to enter the market, which will change the dynamics of the industry.<br />The firm discovers its processes are not a efficient and/or effective as those of its competitors.<br />The firm believes its current products or processes are not going to be successful in the future. <br />
Collaborative Arrangements<br />Collaboration can include partnering with suppliers, customers, competitors, complementors, organizations that offer similar products in different markets, organizations that offer different products in similar markets, nonprofit organizations, government organizations, universities, and others <br />Collaboration can also be used for many different purposes, including manufacturing, services, marketing, or technology-based objectives.<br />Collaboration arrangements can also take many forms, from vary informal alliances to highly structured joint ventures or technology exchange agreements. The most common forms of collaborative arrangements used in technological innovation include strategic alliances, joint ventures, licensing, outsourcing, and collective research organizations.<br />
Strategic Alliance<br />A strategic alliance is a partner of two or more corporations or business units to achieve strategically significant objectives that are mutually beneficial. Thus, a strategic alliance needs to be a relationship in which the strategic advantages outweigh the transaction costs involved with the alliance.<br />Alliances can enhance a firm’s overall level of flexibility.<br />Alliances are also used to enable partners to learn from each other and develop new competencies.<br />Alliance partners may hope to transfer knowledge between the firms or to combine their skills and resources to jointly create new knowledge.<br />Alliance relationships often lack the shared language, routines, and coordination that facilitate the transfer of knowledge- particularly the complex and tacit knowledge to lead to sustainable competitive advantages.<br />To use alliances for learning requires a serious commitment of resources, such as pool of dedicated people willing to travel between the home firm and partner firm, test-bed facilities, and active procedures for internalizing what has been learned.<br />Alliances can be differentiated along several dimensions. These include level of formality, duration, and location. <br />
<ul><li>Joint Ventures:</li></ul>Two or more firms combine their equity and form a new third entity. It is common to have very detailed agreements covering what each party is to provide, what each can expect, and how each is to operate in the joint venture. Joint ventures are a particular type of strategic alliance that entails significant structure and commitment.<br /><ul><li>Franchise agreement: </li></ul>Another type of formal alliance is a franchise agreement and a contract is established between the franchisor and the franchisee to sell a given productor conduct business under the company’s trademark. The contract between these two parties typically specifies: time period and geographical region; how the franchise is to be operated; loss of franchise.<br /><ul><li>Consortia:</li></ul> Are characterized by several organizations joining together to share expertise and funding for developing, gathering, and distributing new knowledge.<br />
<ul><li>Licensing: </li></ul>It is a contractual arrangement whereby one organization or individual (the licensee) obtains the rights to use the proprietary technology (or trademark, copyright, etc.) of another organization or individual (the licensor). Licensing enables firm to rapidly acquire a technology (or other resource or capability) it does not possess.<br /><ul><li>Subcontracting:</li></ul>This is a type of alliance that is growing in importance as firms seek to position themselves strategically. Firms subcontract some technical services because of the difficulty in keeping up-to-date with innovation in the area. The operation of economies of scale can provide significant benefits to the firm offering the subcontracting services.<br />
Measuring real costs and profits from the alliance</li></li></ul><li>The critical questions that the partners entering a formal or informal alliance (Partner Monitoring and Governance) should ask are:<br />Do we have clear goals and expectations?<br />What is each member of the alliance responsible for, and what does each bring to the alliance?<br />Will each member of the alliance promise to develop solutions that will solve the problems and needs of the members?<br />Will members promise to meet the goals of the alliance?<br />Who will be responsible if the solutions fail? What compensation will be offered?<br />What are the conditions for dissolution of the alliance?<br />How will disputes be resolved?<br />
Evaluation of Potential Partners<br />Impact on Opportunities and Threats in the External Environment<br /><ul><li>How would the collaboration change the bargaining power of customers or suppliers?
Would the collaboration impact the threat of entry?
Would the collaboration impact the firm’s position vis-à-vis its rivals?
Would the collaboration influence the availability of complementary goods the threat of substitutes?</li></li></ul><li>Cont…<br /> Impact on Internal Strengths and Weaknesses<br /><ul><li>How the collaboration leverage or enhance the firm’s strengths? Does the collaboration put any of those strengths at risk?
How would the collaboration help the firm overcome its weaknesses?
Is the collaboration likely to yield a position of competitive advantage that is difficult for competitors to imitate? Is such a competitive advantage achievable without collaborating?
Would the collaboration leverage or enhance the firm’s core capabilities?
Is the collaboration likely to impact the firm’s financial strengths or weaknesses?</li></li></ul><li>Cont…<br />Impact on Strategic Direction<br />Assessing the fit of the collaboration with the firm’s strategic direction includes:<br /><ul><li>How does this collaboration fit with the firm’s statement of strategic intent?
Is the collaboration likely to help the firm close any resource or technology gap between where it is now and where it would like to be?
Are the objectives of the collaboration likely to change over time? How are such changes likely to be compatible or incompatible with the firm’s strategic direction?</li>