Professional Documents
Culture Documents
111, 2006
2005 Elsevier Inc. All rights reserved.
www.organizational-dynamics.com
Collaborative Entrepreneurship:
GRANT MILES
CHARLES C. SNOW
INNOVATION,
COLLABORATION, AND
ECONOMIC DEVELOPMENT
Over 70 years ago, economist Joseph
Schumpeter first advanced the argument that
innovation is the primary driver of economic
development. The value of creative destruction, as Schumpeter described the innovation process, has been confirmed recently by
William Baumol, whose book The Free-Market
Innovation Machine demonstrated empirically
that firm and inter-firm ability to innovate
explains why capitalist economies histori1
project partner(s). Where new or shared markets are served by a jointly designed product
or service, the participating parties draw lots
in advance to determine which firm will take
the lead in proposing market-delivery
responsibility and an equitable distribution
of returns.
The heavy focus of OpWin firms on continuous innovation often limits their interest
in taking an active role to create wealth via
the long-term production of goods or services. In those cases, OpWin firms work with
outside partners to produce components or
even complete products for OpWin markets.
After assuring the market success of a product or service, OpWin firms may license
designs to outside partners for their own
long-term sales and service. Licensees, too,
are required to meet OpWins customer satisfaction and environmental standards.
To become a member of OpWin, a firm
must demonstrate its competence and trustworthiness. This can often be achieved by the
successful completion of a single collaboratively generated innovation project. At any
point, a firm can apply for membership,
which must be voted on by all members after
an OpWin review team has assembled a
sponsorship document. Alternatively, a firm
may be affiliated with OpWin on a temporary or infrequent basis, typically as a licensee
or other type of contractual provider.
In summary, OpWin member firms operate independently in their own markets and
in collaborative alliances with members of
the network to design and take to market a
continuous stream of innovative products
and services. However, OpWins alliances
differ from other alliances in several important ways. For example, OpWin initiatives
are based on ideas and activities that are
viewed as openavailable to all member
firms, with users responsible for acknowledging the source of their ideas and the
contributions of their partners. Also, OpWin
alliances are open-ended rather than specialpurpose, and rewards are determined after
the fact rather than in advance. Finally, roles,
responsibilities, and returns are governed
not so much by contracts (though these are
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on products that might ensue, will give Syndicom the financial returns it needs to survive. Second, and even more important,
Syndicom understands how the process of
collaborative entrepreneurship works and
how to manage the kind of organization in
which collaboration can be used to create
innovative products and services. For example, members of Syndicom worked closely
with the spine doctors to identify the objectives, both technical and behavioral, that the
product would have to accomplish. Continuing in the collaborative mode, the parties
developed a set of protocols that would
encourage the community of spine doctors
to use the product properly and thereby help
their geographically far-flung colleagues
improve patient care (Send in your unusual,
difficult cases; Reply promptly and constructively; and Close the loop by reporting outcomes and giving credit). Building
on its organizational strengths and early
successes, Syndicom is now pushing outward, first by attempting to develop innovation communities within other medical
specialties so that physicians can freely
exchange ideas and insights, and second,
by reaching out to related types of firms
(e.g., medical device manufacturers and distributors) that might play a role in future
innovation projects.
LESSONS LEARNED
As we discussed, the consensus of prior
decades was that barriers inside firms and
markets were constraining knowledge-driven innovation, and therefore efforts were
made to fix existing business models, organization structures, and management processes. Now, the emerging consensus is
that rather than attempting to rework old
approaches, the focus should be on creating
new models that open more avenues to collaboration within and across firms. Our fictional OpWin is one such model around
which firms like Syndicom can experiment.
Indeed, in a truly innovative economy, as one
venture capitalist told us, every entrepreneur
new values and behaviors but also unlearning many old habits. Still, it is possible that
many experiments with the collaborative
entrepreneurship model will fail because
the required investments of time and training
will exceed the expectations of even the most
well informed managers.
In the Syndicom organizational design,
there is no central owner. All participants,
including Syndicom, are investing voluntarily in a jointly owned process of collaboration. Although the company has no formal
means of measuring intangible assets such as
the ability to collaborate and develop and
sustain trust, there is a widespread intuitive
belief that certain intangible assets are valuable and are providing significant returns.
CONCLUSION
We have been most encouraged by the
response to our ideas and suggestions
regarding collaborative entrepreneurship.
We have presented our work in a variety
of settings, including business programs on
the radio, executive development programs,
entrepreneurship conferences, and M.B.A.
specialty courses. Based on these initial
experiences, we believe that the time may
well be right for broad experimentation with
OpWin-like business and organizational
models. Indeed, we are struck by two themes
that seemed to emerge in each of the various
audiences we have addressed. First, the
potential for collaborative communities to
enhance innovation-driven wealth creation
makes sense to those who thoughtfully consider it. In contrast to other recently proposed
ways of doing business, there has been very
little knee-jerk reaction to the collaborative
model as one that will not work. Multi-firm
collaboration does not hamper the efforts of
individual firms to innovateit simply augments those efforts by providing individual
firms which possess collaborative capability
a much enhanced competitive advantage.
Second, because it is based on positive
human motives and characteristics, the process of collaboration offers a much desired
respite from the constant concern that ones
innovative efforts will fall victim to a system
focused on the appropriation of wealth
rather than on its creation. We are fast
becoming convinced that many people are
simply fed up with the crass, exploitive, even
criminal behavior of managers evidenced in
the past few years. Collaborative entrepreneurship, in stark contrast, offers a way of
doing business that is exciting, productive,
SELECTED BIBLIOGRAPHY
Our book Collaborative Entrepreneurship: How
Communities of Networked Firms Use Continuous Innovation to Create Economic Wealth
(Stanford, CA: Stanford University Press,
2005) discusses the growing need for the
multi-firm collaborative network organization in todays global economy and the major
barriers that stand in the way of its arrival
and development. Our description of OpWin
Global Network shows managers and organizational designers how a multi-firm collaborative network can be formed and
operated. Also, all three authors have been
involved in various capacities with the development of Syndicom, and are tracking its
growth and management challenges in order
to learn more about the process of building
collaborative communities for business purposes. You can visit Syndicoms web site
(www.syndicom.com) and/or contact members of its management team for additional
information about the practicalities of community building.
For an overview of the process of collaboration, see the classic article by D. G. Appley and A. E. Winder, An Evolving
Definition of Collaboration and Some Implications for the World of Work, Journal of
Applied Behavioral Science, 1977, 13, 279291,
where the authors argue persuasively that
collaboration can only occur when certain
conditions are present, such as voluntary
Raymond E. Miles is Professor Emeritus and the former dean of the Haas
School of Business at the University of California, Berkeley, CA 94720. He
is also a former director of the Institute of Industrial Relations at UCBerkeley and has served as a visiting professor at numerous universities
in the U.S. and abroad. He is a Fellow of the Academy of Management
(Tel.: +1 510 642 3860; fax: +1 510 643 1412; e-mail: miles@haas.berkeley.edu).
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