Creating a forum for understanding how firms can engage in global collaboration to sustain their...

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Creating a forum for understanding how firms can engage in global collaboration to sustain their capabilities to innovate

Katz Graduate School of Business - Echo Strategies - International Business Center, University of Pittsburgh Forum on Global Collaboration for Innovation January 7-8, 2011

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How did this all come about?

How did we collectively make it happen?

Are there lessons in this for global collaboration?


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Forum creation as a microcosm of global collaboration for innovation: Spotting the opportunity


CIBER (Centers for International Business Education and

Research)International Business Center at Katz awardsGAP (Global Academic Partnership) grants

Ravi Madhavan, recipient of 2009 GAP grant

Sue Cohen studies how where knowledge resides matters for innovation, interest in global locus

Rabi Chatterjee, Prof of Marketing

Members of Organizations

& Entrepreneurs

hip group, Strategy area Committee to

develop University Technology

Commercialization program

Lou Musante, Managing Partner Echo Strategies

Common interests in innovation,

collaboration, and education

National, Local

Institutions

Connect Connect

Connect

Connect

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Forum creation as a microcosm of global collaboration for innovation: The vision


Country differences(resources, market, institutions, culture, etc.)

Academic diversity:

Management, Law,

Economics

How do we understand the best ways for firms to collaborate globally for innovation advantage?

Industry differences(mechanisms to protect IP, nature of innovation, etc.)

Firm differences (global strategy or multi-domestic, innovation leader or follower, etc.)

Country diversity: U.S.

and China

Professional diversity: Business

Executives and Scholars

Bring together individuals who understand global collaboration from a diverse array of perspectives, to

get a broad sense of the landscape and to identify research questions with high payoffs for theory and

practice.

Content of the forum

Composition of participants

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Forum creation as a microcosm of global collaboration for innovation: Mobilizing resources


But what kind of experts in each domain do we need?

Our starting point for search was our understanding of the landscape of issues relevant to global collaboration, that we could sample from.

What issues do academics think are important and what issues resonate with our executive audience? Assessing the terrain and areas of high potential dialogue required iterative face-to-face conversation

between Lou and Sue over several months.

Our search for relevant experts in academia and practice occurred simultaneously to these discussions, and together this helped to define

the tracks for the forum.

Our search for suitable experts (those with competence and interest in subset of the issues deemed of relevance to both groups) was conducted globally and locally, all through personal networks.

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Forum creation as a microcosm of global collaboration for innovation: Engaging resources


Receptivity:

selection, based on common interests

setting conducive to conversation

Engagement & Exchange:

through themed tracks with issues that are tangible to most groups

designated roles – presenters, Q&A panel

periodic reflections, “take aways”

Synthesis:

discussion around themes amongst diverse groups

multi-media data capture

discussion around areas of agreement, areas of conflict or gaps in understanding, implicit theories behind ideas

distill, classify insights

Now, how do we facilitate a productive conversation amongst the members of this diverse group, in a way that increases the

chances that everyone leaves with something of value?

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Take Aways

Spotting opportunities (for innovation) Institutions create targeted opportunities (around specific agendas) Networks bring together the people that exploit them, more so than co-

location Collaboration around common interests provides richer insight into interests

and competencies, which suggests fruitful connections amongst other parts of people’s networks

Crafting a vision (for something potentially path breaking) Face to face interaction facilitates synthesis of diverse perspectives and

knowledge of different tools and how they might be used Overlapping absorptive capacity enables faster synthesis across disparate

thought worlds Mobilizing resources (for collaboration)

Innovation requires engaging a sample of good people with diverse competencies but a common interest - there is no optimal configuration - many potentially fruitful mixes of people and domains exist

Networks (that bridge thought worlds) provide access to people in diverse domains

Networks act as two sided quality filters – enables faster mobilizationKatz Graduate School of Business - Echo Strategies - International Business Center, University of Pittsburgh Forum on Global Collaboration for Innovation January 7-8, 2011

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Knowledge outputs from the collaborative forum: A synthesis of knowledge flows from Friday & Saturday


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Reframing the issues through discussion

Rather than debate whether firms need to locate R&D in specific places, to sustain their innovation capabilities, the more salient issue is: What to locate where ▪ Different factors drive success in Invention and

Commercialization and this could mean they should be located in different places

▪ Yet, success in invention can be influenced by an understanding of customers and the context in which products and services will be used, so there may be value in co-locating invention and commercialization

▪ So, we should ask: When is it important to locate invention and commercialization in the same place?

▪ To address this question we need to be clear about what we mean by invention and commercialization? What are the boundaries of R&D?


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Questions worthy of further research

Boundaries of R&D need to be rethought… possible linkages:

Research = Science from Invention and Discovery…but how much development of scientific knowledge do firms actually do? in many industries, most of this kind of research has shifted to Universities.

Development = Development of Technology where Technology is defined as the application of Science to solve problems / usually the Technology is actually a Platform Technology that can solve many problems AND that is good and bad. What problem should a platform technology solve? To make money and receive funding to commercialize you have to FOCUS usually on specific problem in a specific market.

C = Technology applied to a specific problem to solve in a specific market


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Rather than debate whether firms need to locate R&D in specific places, to sustain their innovation capabilities, the more salient issue is: What to locate where ▪ It may be more useful to think about separable

discovery and design tasks and consider their ideal locations apart from whether they reside in a traditional functional R&D unit.

▪ Perhaps R needs to connect with parts of the C function – to better prioritize potential problems that emerging solutions could solve….there may be less need to connect R and D

▪ The role of IT in each, and the function of IT in connecting people, may differ for distinctive discovery and design tasks.Katz Graduate School of Business - Echo Strategies - International Business Center, University of Pittsburgh Forum on Global Collaboration for Innovation January 7-8, 2011

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Interesting observations about R&D that affect the answers to these questions: R&D as a function is really about the care and feeding of scientists Projects are the only truly manageable locus of capability – The

potential to reconfigure the ”pipes and prisms” of intra- and inter-organizational knowledge flows resides here

Benefit of separation is to allow for immersion in one ‘place’ – distinctive experiences, to sustain pools of diverse understanding

How we define R&D matters.. Connecting the potential in medical micro-dosing technologies with the functionality in the Freestyle Coke dispenser – Collection of fine-grained customer data from the machine that can be used to refine customer experience Which part of this is R&D? Same mechanisms for opportunity sensing and creation, just different groups involved?

R, D, C all operate in different temporal windows of opportunity


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From how much contact/overlap should we have between Research and Development (an issue that affects their country co-location), to: How do we manage design and discovery driven

innovation in the same organization?▪ To create fluid organizations,▪ That can exploit opportunities provided by open

innovation and IT, and shifting centers of global excellence

▪ Thereby continually creating unique innovation spaces where the firm invents/innovates faster than others, despite diminishing abilities to protect IP/knowledge outflows


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Reframing the issues through dialogue

From considering the role of IT mediated communication as a vehicle for reducing the need for presence to: Considering how firms can develop IT infused

innovation capabilities:▪ Involves conceptualizing IT not just as a communication

tool, but also as a means of:▪ Shrinking all distances – not just physical distance (WalMart)▪ Changing what location means (not solely geographic or functional)▪ Sensing and searching for opportunities (Dick Kouri)▪ Empowering customers to create their own interaction with the firm

(Abercrombie)▪ Facilitating others’ search for you – make our “connectability” visible▪ Inputs and outputs to IT are interpretive – need to connect domain

experts to utilize – so infusion means integration into interpersonal networks as well as cognitive frames


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From considering the role of IT mediated communication as a vehicle for reducing the need for presence to: Considering how firms can develop IT infused innovation capabilities,

cont’d:▪ But, there are cultural barriers between IT and R&D – How do we overcome them? ▪ Project planning mindset dominates in IT▪ Involvement of CEO, CFO is critical – need a “seat at the table” for IT and R&D▪ Who is pushing for change matters a lot to whether and how it will happen▪ Individuals at all levels of the firm need to assimilate a sense of the potential

of IT to transform not only how they work but also the value, functionality embedded in the end products they create

▪ How do we build trust without face to face engagement? How is engagement via IT different from face to face? What understanding do we lose?

▪ “Adaptive structuration “suggests unexpected gains from forced collaboration – but the power redistribution that can result from new information (e.g. customers drive innovation, IT shares decision rights) makes it difficult to implement in established firms


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One answer to “what to do where” is not to conduct core R&D activities where a firm cannot protect its IP. But markets and a need to be close to customers can create the opposite pull. Rethinking the way a firm benefits from particular locations suggests other ways of answering this question.

▪ Think more broadly about ‘how’ to be there (from location as a way to access country-specific resources, to location as a place to create firm-specific resources) : Is being there virtually sufficient for the discovery / design

activity? ▪ IT enables collection of fine-grained customer data remotely.

Does it provide sufficient insight into what the next leap in new technologies will be – over 5 years out? Can it provide insight into the next wave of functionality that customers will value?

▪ IT enables dispersed collaboration for platform technologies, solving known problems. Can it enable architecting, visioning, ideation as well?

▪ Does the potential to use IT to minimize the need to be there for invention/innovation depend on whether firm is sourcing information in unstructured form – silly putty <as yet undefined experience want customer to have, health care> or structured form - Legos <Apple platform technology, scientific knowledge>

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▪ What do I need from this place? Can I do these things remotely?▪ Opportunities are recognized through serendipitous encounters that

illuminate connections across domains – discovery of problems to solve

▪ Opportunities are created through synthesis, engagement, and interpretation across domains – solutions are designed

▪ Am I am going there to listen, to learn, or to lead? How should I engage in these activities?▪ Listen - taping into relevant talent net/customer networks versus sense

of place - hearing what is meant, developing subjective connection to the place

▪ Learn - what unique access to talent and customers can I develop? Consider varied routes your firm and others can access knowledge (e.g. third party technology providers). What happens if you don’t collaborate? Who will?

▪ Lead (here separation is better?) e.g. plot a way out of chaos, e.g. Apple, firm that creates a vision for markets in flux can attract others who fit within that vision, by providing direction and acting as a hub that connects the parties needed to make it a reality)

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How to be there (location as a place to create firm-specific resources)▪ To acquire resources, or to engage and transform resources? ▪ Transformation occurs not simply by investing in community resources and local

infrastructure, but by combining local resources with firm-specific resources, to imbue them with firm-specific value

▪ Transformation of community resources enables quasi-appropriation: Enhances the value of relationship with the firm over other potential

employers/partners Creates resources that attract other desirable partners to the region Produces a sense of place, which underlies firm-specific insight into local

opportunities Embeds firm uniquely in local innovation system, to better exploit

opportunities

▪ What is the first thing we should do to engage local resources?▪ Cities as life support systems – where can you help? Where is the pain? Will

getting involved here place the firm in a meaningful position to learn what problems it can solve or how? <IBM’s Smarter Planet initiative comes to mind, as a way to sense these things…>


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From what capabilities should we build, to how can we leverage global collaboration to innovate faster or smarter?

See also slide on fostering collaboration between IT and R&D

IT enables data processing – but being smarter means asking better questions – connect domain experts to jointly define the initial Qs - collaboration leads to new shared cognitive filters for sensing opportunities for invention and innovation – role of language in constructing shared understanding of desirable firm capabilities

Redefine the problem space to one where the structure of collaboration required to solve problems enables sustained differences in how firms sense, create, commercialize innovations….e.g. we are not sellers to our customers – we buy and bundle solutions for them, we co-create with them, we chart a vision and put in place the collaborative infrastructures, platforms to create for/with them

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From what capabilities should we build, to how can we leverage global collaboration to innovate faster or smarter?

Gang /Mier/ Allen – since IP is often of questionable value in protecting innovations, both for institutional reasons and because technology is available through so many different sources, firms need to position themselves to be better collaborators. This includes positioning firm in national/regional innovation clusters and networks and systems to sense early, mobilize faster, and suggest firms should worry more about knowledge inflows and how to exploit them then they worry about outflows. It also suggests there is no one best set of capabilities to develop – many possible ways for firms to create unique combinations of knowledge resources.

How should firms leverage R&D service organizations? How does this differ if you are the innovation leader vs. you are playing catch up?

How much R does a firm need to do? Does it depends on availability of absorptive capacity or bridging organizations, like TTPs?

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How to adapt to the “wrong” country?

How to look at differences across legal institutions as potential opportunities?

Regional transfers across regions within a country may be an important element of national innovation system firm can take advantage of in locating – e.g. in China cross regional transfers through Universities are encouraged and managed

Governments stimulate innovation in m any indirect ways – e.g. by funding Universities. How do the differences in whether innovation regions are supported by various ground-up vs. top down government initiatives matter for the way firms can tap into the knowledge generated in the region? Which ones seem to correlate with innovation regions being discovery vs. design driven – or falling somewhere in between?


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How do location and spillovers relate to exploitative versus exploratory innovation? Note there is a difference in what these mean from discovery versus design driven innovation, and confusion in the literature about these terms. Usually exploration means to move into new domains, innovate in ways that build on little of a firm’s experience, whereas exploitation occurs when firms do more of what they already know how to do well.

How can firms organize to capture exploratory and exploitative opportunities in a region?

We need to understand how knowledge and innovation flows at different levels (individual, firm, region, country, global) affect each other, since each will likely be managed differently.


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How can innovation be better integrated into a company’s corporate strategy?

Some believe separate of R & D is the end of organizations as we know them – firms are instead comprised of systems of relationships with more transient functional boundaries.

To find the right organization of R, D, C need to first understand the natural flow of these activities, then decide where they should reside. Groups need to understand the lifecycle of what the other group is creating – scope and durability of solutions.

Management of transitions between activities is key. Need to manage overlap to enable insights consistent with activity lifecycle and minimize distraction. Managing connection is also about managing and sustaining absorptive capacity.

Ideal separation likely differs by industry, region, and company. Historical contingencies of firms’ co-location of these activities will constrain adapting these boundaries.

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Outsourcing of R & D & C – what are the effects on a firm’s absorptive capacity and ability to assimilate knowledge and technologies from geographically dispersed listening posts, knowledge factors, design driven clusters? Does it depend on a firm’s position in national innovation systems or regional clusters?

Are there configurations of R, D, C activities that are more successful for certain strategies or for particular kinds of innovation than others?

How does thinking about innovation as an open system alter the possibilities for organizing R, D, C? Perhaps we can think about these choices as ‘make or buy’ decisions and consult the mergers & acquisition literature for insight into how to manage the associated search, transaction, and integration costs. How to manage the risk of knowledge outflows and harvesting of ideas will have to address cultural differences and failure management.


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Summary of Questions Gaps in Understanding

When to be there? For what kinds of discovery and design activities? Boundaries of R&D need to be rethought – inside and outside the firm Integration of IT & R&D needs to be better understood

How to be there? What kind of innovation system will benefit me, what role should we

play in it? How to engage country-specific resources to create firm-specific

resources – priorities, specific kinds of actions?

How best to manage organizations to benefit from these various knowledge flows and maximize the gains from discovery and design driven depends on all of these factors


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Action Items

Make the forum an annual event

Include a focus on other emerging markets (India, Brazil)

Expand the disciplinary and industry variation of participants


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