Strategic Alliances can be an effective method of promoting innovation

Hybrid Organizations as a Strategy for Supporting New Product Development is the title of a research paper by Alison Rieple, Adrian Haberberg, and Jon Gander of the University of Westminster. A summary of their findings:

This article focuses on strategic alliances, in which one firm (normally a large, multi-product corporation) obtains critical product-development resources, such as design or technological know-how, from an independent firm (normally a smaller and more specialized design consultancy or a technology developer). The two firms develop a fairly close relationship—perhaps only for the period of a specific assignment, but often over a longer period spanning several projects. These hybrid relationships are governed through informal means, such as unwritten agreements between key individuals, as much as through the more usual form of legal contracts.

Crucial to the success of a hybrid are “boundary-spanners.” These are members of the partner organizations who are able to move freely within both, translating the requirements of each into language and behavior that is acceptable to, and understandable by, the other. Trust between the senior managers who set up a hybrid in the first place, and the boundary spanners who maintain the relationship subsequently, is a critical factor. Trust lowers cost and raises productivity. Cooperation increases under conditions of trust, because with trust such costly barriers as formal contracts and detailed monitoring can be removed. The resulting less-formal specifications can also allow the parties to respond more rapidly to any changes in circumstances.

Hybrids protect the smaller firm from the stifling effects of the larger firm, while allowing its creative knowledge to be exploited. This happens through what is, in effect, a “semi-permeable membrane” in which certain features are blocked from movement while others are transferred.

Boundary-spanners, or bridgers, as they are sometimes described, are people who move between both organizations, translating the norms of each into language and behavior that are acceptable to, and understandable by, the other. There is almost no research on the role that boundary-spanners have in hybrid organizational structures, and yet they are likely to be one of the most important factors in the success of those structures. After all, new product development is a social-, collaborative-, and interaction- intensive process involving experimentation and negotiation over the lifecycle of the new product’s evolving form, bringing together knowledge, expertise, and technologies from different sources into a whole. Learning involves the negotiated resolution of constraints and generates new knowledge, which may then be embedded in the design of new technologies, products, or processes. Thus boundary-spanners need to be skilled first of all in the nuances of creating a new product.

A perfect example of successful boundary spanners can be found in an article written by Tom Mulhern and Dave Lathrop, of Conifer Research and Steelcase Inc., respectively. Their article,“Building and Tending Bridges: Rethinking How Consultants Support Change,” detailed the way in which design consultant Conifer Research used its methodological expertise in furniture and workspace design to improve Steelcase’s product innovation and organizational performance. Although Mulhern and Lathrop had not worked together before, they had “worked around each other” and knew a lot of the same people. They were both part of an established network of relationships and reputation, and this is likely to have facilitated the development of trust between the two organizational boundary-spanners.

Mulhern and Lathrop also epitomize the internal boundary-spanner role. Steelcase had previously gone out of its way to seek external perspectives from a “host of brilliant, innovative, but generally outside resources, with the outcome generally packaged as a ‘deliverable.’” But in order to achieve the impact they sought, Mulhern and Lathrop recognized that their job would be to inspire insiders to take up the cause. They described this process as developing “experience bridges.” The bridges they established linked people, information, and process and thereby “dramatically accelerated” progress through the development of shared understanding.

In conclusion, it seems as though a strategic alliance between a large corporation and a small creative house works effectively for product innovation, with the role of the boundary spanner being crucial to the success of this approach.

First published June 3 2005

This entry was posted in Business, Culture, Design, Frameworks, Innovation Planning, Literature review, Perspective, Process, Strategy and tagged , , , , . Bookmark the permalink. Post a comment or leave a trackback: Trackback URL.

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