Friday, September 05, 2008
This is a conceptual paper attempting to uncover the mechanisms of organizations managing innovation outsourcing to business partners. In a business environment characterized by the development of deep, niche expertise in a particular domain, business partnerships can provide a source of innovative rejuvenation by outsourcing the innovation to business partners who have complementary skills and expertise. This paper addresses a critical challenge that organizations are currently facing: how do you manage outsourcing of innovation to business partners effectively while maintaining your strategic competitiveness?
In this paper, we conducted multiple exploratory case studies of over 30 innovative European and US companies. It involved 50 semi-structured interviews with senior executives from research and development, product management, information technology, and marketing. We identified three complementary models of managing outsourcing of innovation to business partner: acquisition, strategic alliances, and open source (OS). Based on these, a three-dimensional ‘‘Co-Innovation Space’’ is proposed that can help in analysis and planning of current and future innovation projects.
The practical implications of the study are that partnerships can open the door to multiple knowledge sources. Accessing and integrating information from these sources can greatly enhance knowledge base of organizations and can help fuel sustainable innovation. The models proposed in this study provide a lens to examine existing innovation project portfolios and/or to plan for future innovation programs.
However, although the research is carefully designed, it is an exploratory study and has the limitation of generalizability of the findings. Nevertheless, findings from multiple case studies from diverse organizations shed a light to current innovation and strategic alliance literature. The value of this study is that it is probably among few to study such a large, diversified, and geographically scattered group of organizations. Although exploratory and preliminary, this makes the findings of the study insightful.
Summary provided by Sanjeev Jha