IBM’s Global CEO Study 2006 revealed that CEOs were placing a high priority on innovation. To drive this innovation, many of them were collaborating beyond their organizations — with their extended networks of suppliers, customers, business partners, and others. Such collaboration, however, is easier said than done. Indeed, the growing trend toward extended enterprise models, involving more external partnerships, makes collaborative innovation harder to do well. In 2005, David Ernst and James Bamford reported that 50 percent of strategic alliances fail (“Your Alliances Are Too Stable,” Harvard Business Review, June). We believe collaboration problems across organizations are key contributors to the failure of strategic partnerships. At IBM Global Business Services, we have developed a framework — the ABCs of collaborative innovation — that can improve the chances of such partnerships succeeding.
Our research and experience show that alignment, boundaries and commitment are the best building blocks for avoiding the pitfalls of collaborative innovation:
• Alignment entails synchronizing the strategic vision and innovation goals with their implementation throughout the organization, focusing on collaboration both vertically and horizontally.
• Managing boundaries enables collaboration across organizations, establishing structures and processes regarding governance, operations and technology.
• Finally, an ongoing commitment is required to orchestrate and systematize collaboration for innovation throughout the organization and its extended enterprise over time. These ABCs can be done separately or in combination, depending on an organization’s capabilities, strategic goals and innovation objectives. Note that by calling these the “ABCs” we do not mean to imply that this is in any way easy, but rather that there is a way of simplifying the complexities of collaborative innovation (see diagram below).
A = Alignment
Vertical alignment translates the business strategy’s innovation objectives into an organizational strategy and an implementation plan. Horizontal alignment typically requires the creation of a new organizational unit or the redefinition of existing ones. Key here is the elimination of structures and processes that may have been effective in the past but are no longer conducive to collaborative innovation. Often, job functions, responsibilities and performance measurements will need to be altered to include collaboration for innovation. By translating the business strategy into operational goals, and by creating structures and processes to enable collaboration across all segments of the organization, innovation leaders can motivate and enable new behavior.
B = Boundaries
Strategic partnerships require building trust, navigating different approaches to decision-making, agreeing to legal terms about ownership and other issues that are often contentious, collaborating across cultures, managing communications and operations, and so on. Defining the partnership, establishing governance terms and then building a technological and operational infrastructure for ongoing collaboration across organizations can significantly improve the chances of success.
C = Commitment
Organizations that are serious about collaboration for innovation make an ongoing commitment to transformation and change. Creating a collaborative culture happens over time through leadership communication and reinforcement, the development and ongoing tracking of key measures, and institutionalized learning and knowledge management to continually develop the capabilities needed for collaborative innovation.
Capture the Knowledge
For optimal results, the knowledge gained through collaboration should be captured, shared and reused. In this way, by establishing processes for learning and changing, collaborative innovation can be improved over time. Eli Lilly is a strong example of a company that helped set the standards in the pharmaceutical industry for collaborative innovation. And in the highly competitive aerospace industry, Airbus has been able to accelerate innovation by working closely with its network of suppliers and other partners to develop innovative solutions collaboratively.
We have developed a set of 25 questions based on the ABC framework that can help you to identify that areas where your organization is already doing well and that that need improvement. Just contact one of us for a copy.
Global Leader, Organization and Change Strategy Practice,
IBM Global Business Services
Americas Leader, Organization and Change Strategy Practice,
IBM Global Business Services
Senior Managing Consultant,
IBM Global Business Services.
Leader, Strategy and Change,
IBM Institute for Business Value
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