So many managers are talking about innovative business and operating models. The ambition is

often to find new concepts for the value chain with a more open and collaborative touch. Why not focus on own strength and competencies - and let others do jobs that they know best. Outsource, offshore or even crowdsource activities. The goal is a far more agile and lean setup of the organization – nice idea and really trendy. While working with such groups of managers on these types ofconcepts, I often find it is intellectually not too hard to come to valuable concepts and designs.

But once the idea is there the struggle starts. The implementation still is a question of solid change management - feasible. But how to manage and sustain such open and collaborative operating models and organizations. Is there some theory of expertise around? What’s good practice?

To understand these questions, one has to understand the challenges behind the management of collaborative operating models. What are the key differences between traditional more closed organizations and the new style open models? In my experiences, there are two very critical points:

1.       Decision making in traditional organizations is based on hierarchical power. This makes life for managers quite comfortable.  In open collaborative organizations, power does not come in the first place from status or hierarchy but the ability to negotiate. Decisions are a product of skilled negotiation between the partners.

2.       In collaborative organization models, the interest and expectations of the participating partners are far less aligned than thought in the beginning. This is for sure a challenge as managers are in a constant stakeholder management process trying getting the one direction of the partner crowd.

These differences are very fundamental to our way of managing and thinking about organizations. Most

of our management tools and methods like IMS (Integrated management System), EFQM, TQM, Six Sigma etc. are not at all designed to drive collaborative models. They seem to be even contra productive as their basis is the well-integrated solid classic organization with nice structures and process under one roof.  

Looking out for experience and methods for these new management challenges in collaborative operations we can take a closer look a very interesting field: The international development cooperation. The German development agency GIZ (Gesellschaft für Internationale Zusammenarbeit) has the task to develop and manage huge and complex development programs all over the world. Such programs – like for example transforming the entire health system in Indonesia – require in most cases a participation of many players with very different backgrounds and interest (like political institutions, donors, NGO’s etc.). For the managers, this kind of setup is incredibly challenging – and sometimes frustrating. It is pure collaboration.

GIZ saw the problem and analyzed dozens of their programs and spend a huge research on finding out what makes management of collaborative operations work and what doesn’t. They find out five success factors of managing collaborative programs and organizations:

1.       Strategy – orientation and strategy is the common ground of partners and the fuel for alignment of interest. Strategy becomes a constant process for collaborators.

2.       Cooperative system – defining the space, the “skin” and the stakeholder involvement is a task the GIZ calls setting the cooperative system. It is well known from the system theory that demarcation is critical to manage a system.

3.       Steering structure – as hierarchy is not the paradigm of collaborative models, there is need for negotiating a performing steering structure. It is all about taking decisions and keeping the system agile.

4.       Processes – alike strategy the players have to design and set processes for collaboration as a common ground. To agree on such standards and to enforce them may be a demanding task for the involved managers.

5.       Learning & Innovation – the strength of collaborative systems can only be unfolded if there is the ability of learning and innovating on the way.

GIZ designed a very useful management concept around these five success factors called “CapacityWorks”. To my knowledge it is the first and so far only method and toolset to really address the management of collaborative operating models. In the GIZ every manager has to be an expert in CapacityWorks. A whole new management discipline that could be of great value for the new breed of managers in innovative collaborative operating models.

I’m looking

forward for your comments and discussion.

Clemens

Frowein 

Check: http://www.giz.de/de/downloads/giz2012-de-management-komplexer-projekte-und-programme.pdf

People like Angelo are mostly not the nice guys. They tend to tell you what they think directly and fearless. When our little discussion came to open innovation, Angelo seemed to get exited. He claimed that he is now following this trend for more than three years. Most of his experiances are not positive at all. His critics was aiming at three issues:

Angelo explained me that open innovation from the persepctive of a small engieering company makes him feel powerless. Power is shifting to the big players, they ar in the driver seat and rule the game. Supplies become part of a selection process that they dont understand well. This makes him feel small and
replacable. For Angelo, this is poison to innovation.

Powerful innovations are growing in a dialogue and the dynamics of dense communication. It is naïve to assume that one initiator has a request and there is the ready to apply innovation out there to find easily.
This will in the best case lead to incremental and inferior solutions. With open innovation, realtionships
become obviously weaker and the importance of the communication process is more and more neglected.

The most important claim from Angelos side is the lack of trust. He would never ever give his ideas in a generic OI platform any more. There is literally no reason to trust that his ideas will be protacted as they should. Some companies may have the right values but they don´t enforce them. One bad experience and the faith is gone.

All this is though. Are we on the wrong track with the more and more emerging concept of Open Innovation? To make it very clear: If people like Angelo will not play this game and paticipate, the concept of open innovation will fail.Let´s start to think how we can deal with these three critrical aspects.

Can we build in more trust, better relationships and more balances power in open innovation processes? What are the smart solutions to involve Angelo in the game and to get the best from him?

It was becoming late this Sunday, the second bottle of red wine was done and the mosquitos were biting us so that we had to leave. It was one of these great learning days.

These tendencies can be very well examined in the context of organizations and corporations these days. The actual dreadful economic crisis carves deep traces in the landscape of firms and has an impact in the mindset of their employees. This is not all bad. We see interesting changes that can be of tremendous value for companies, if canalized in the right direction. But let’s start from the beginning.

The logic of the crisis is putting high pressure on affected companies. Three critical issues can be identified in many industries. First, there is the weakness of the markets and a decline in sales. As a result of fewer transactions and lost turnovers the requirement of resizing and eventually restructuring the supply side is the second pressure. Given that severe costs cutting and changes in almost all fields of operations will follow. And the third pressure point are increasing  difficulties to refinance the system as credit supply dried out.

In the past, only singular companies experienced such a dramatic mixture of challenges. In the crisis, it’s a general business condition. The competence and skills to cope with this unusual situation and finally solve the problem is not to be found in the DNA of our usual success spoiled corporations. And if you have no experience in solving such problems there is only one way out: Creativity!

And here we’ve come full circle. Our initial observation an increased density and intensity of communication is symptomatic for emerging creative processes. People in pressure situations increase their level of cognitive activities. Urgency produces adrenaline and makes most people far more inventive and imaginative than usual. The power for this raising creative sphere is again communication and – here we come – openness. Reaching out for other experts in order to solve tactical questions for a mutual benefit is one of the best choices you could make in these tough times.

In almost any large corporation, a few visionaries have already started to focus on new possibilities and dimensions resulting from external co-invention. The fear of failure seems to be much less painful than the pressure currently experienced.

What if this openness and collective creativity could enter the DNA of organization? What if a different understanding of how to innovate and invent finds its way in the culture of corporations? What if the expected return of protected ideas ist less then the value of sharing ideas? What if Open Innovation becomes the key paradigm for the culture of co-creation of value?

We believe that Open Innovation is a tremendous step in the ongoing developement. It has the potential to become a completely new pattern and culture of problem solving. It is based on dense and intense communication, on a collaborative mindset and on the value of sharing.

Open innovation represents the next step of innovation management, which unleashes more positive effects and creative power.

This post is a contribution to 24 h of Innovation.

Authors: Clemens Frowein, Marcella Gäb, Frank Mattes