Should companies restrict their innovation initiatives to their in-house design teams or should innovation initiatives utilise collaborative networks?
The answer is obvious. Collaborative networks are likely to produce superior results. Collaborative Networks can be built and operated in several ways. Let us call it the collaboration architecture. The collaboration architecture is built on two dimensions.
Open vs Closed and Hierarchical vs Flat
Open architecture implies that the requirement is defined and solutions are sought from anyone who wishes to respond. Closed architecture implies that the requirement is posed to a select set of prospective contributors who are the only ones who may contribute.
Hierarchical architecture implies that the solutions are evaluated by the sponsor and organised in a descending order of applicability. The best solution is tried out and if it does not yield satisfactory results the next best is tried out. An acceptance cutoff is defined and ideas falling below the cutoff are not tried.
Flat architecture implies that the contributors are involved in evolving a solution which could pick aspects from different solutions moderated by the sponsor or multiple solutions could be selected each of which could be suitable for a different set of requirements.
By these definitions, a collaboration architecture could have four variants. The architecture could be open and flat, open and hierarchical, closed and flat or closed and hierarchical.
While designing the iPhone Apple chose the closed hierarchical mode. It created a select pool of vendors who were asked to contribute designs. The vendors were competitors who could not be expected to collaborate. Apple picked the best options and completed the design of the iPhone.
Most innovative companies who involve vendors in co-creating their products use the closed hierarchical architecture. Many Japanese companies follow the closed flat architecture.
Vendors contribute innovative solutions and are invited to collaborate with the sponsor and with each other. This is called the Japanese Kyohokai approach to innovation where competitors collaborate to create a superior solution.
IBM sponsored the Microelectronics Joint Development Alliance for developing semiconductor products like memory chips. Several vendors collaborated to develop the technologies surpassing the best solution created by them independently.
When it came to the applications, Apple followed the open flat architecture. All application developers were invited to contribute applications which would run on iOS.For a given requirement applications from multiple developers were accepted.
Operating system vendor Linux uses the open flat architecture. The software is open source and anybody can use any code as they deem fit.
Artificial Intelligence creator Open AI uses the open flat model to bring in innovators to take the product to the next level. Anyone is welcome and each can build their own products. Open AI would then build on the solutions so created.
Managers must choose the architecture which is most appropriate for their needs.
The basis for deciding could be as follows.
Open or Closed Networks
Closed Networks are best when the sponsor has near certain knowledge as to who the best prospective collaborators are likely to be and when the sponsor is fully capable of evaluating the solution. When the margin of error is low, alternative solutions cannot be tried out on an experimental mode, it is necessary to zero in on the best solution in the first instance.
The sponsor has to be certain that all prospective collaborators have been approached.
These conditions will make the closed network model a necessity.
Open Networks are best when potentially a large number of prospective collaborators widely dispersed geographically are likely to be able to contribute, when the identity of prospective collaborators may not be known to the sponsor, when there is a possibility of experimentation with low risk and when the sponsor wants solutions to be suggested by the widest possible community of solution providers.
Flat or Hierarchical Networks
Flat Networks are best suited to situations where the contributors would be willing to collaborate with each other and with the sponsor or when it is not necessary to find one best way and different approaches may be appropriate for different situations. Flat Networks work well when several solutions can be implemented simultaneously by different contributors who are in a position to create and implement solutions independently.
Hierarchical Networks are best suited to situations where collaboration among contributors is not possible and the sponsor has the competence to evaluate solutions and rate them in their order of applicability. Hierarchical Networks are suitable when the number of responses is not very large, the sponsor has sole responsibility for implementation and that some good solutions are likely to be missed out.
As with any strategy, collaborative initiatives in innovation may be approached in different ways. The success of an innovation initiative is dependent as much on the calibre of team members as it is on the appropriateness of the choice of the collaborative architecture.