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Innovation through Global Collaboration: A New Source of Competitive Advantage

Posted on by Brandon Klein

Excellent article (PDF download) about collaboration. Abstract below:

Many recent studies highlight the need to rethink the way we manage innovation.
Traditional approaches, based on the assumption that the creation and pursuit of new
ideas is best accomplished by a centralized and collocated R&D team, are rapidly
becoming outdated. Instead, innovations are increasingly brought to the market by
networks of firms, selected for their unique capabilities, and operating in a coordinated
manner. This new model demands that firms develop different skills, in particular, the
ability to collaborate with partners to achieve superior innovation performance. Yet
despite this need, there is little guidance on how to develop or deploy this ability.

This article describes the results of a study to understand the strategies and practices used
by firms that achieve greater success in their collaborative innovation efforts. We found
many firms mistakenly applied an “outsourcing” mindset to collaboration efforts which,
in turn, led to three critical errors: First, they focused solely on lower costs, failing to
consider the broader strategic role of collaboration. Second, they didn’t organize
effectively for collaboration, believing that innovation could be managed much like
production and partners treated like “suppliers.” And third, they didn’t invest in building
collaborative capabilities, assuming that their existing people and processes were already
equipped for the challenge. Successful firms, by contrast, developed an explicit strategy
for collaboration and made organizational changes to aid performance in these efforts.
Ultimately, these actions allowed them to identify and exploit new business opportunities.
In sum, collaboration is becoming a new and important source of competitive advantage.
We propose several frameworks to help firms develop and exploit this new ability.