PISANO AND VERGANTI, 2008, "WHICH KIND OF COLLABORATION IS RIGHT FOR

YOU?"
Introduction: Pretty straightforward article, it provides a framework for managers to choose the
right collaboration mode. Keywords will be highlighted.
Summary:
It's a common opinion that companies should not innovate on their own, but they should leverage
on a network of collaborations. Collaboration modes are a matter of strategy (meaning that they
imply trade-offs) therefore, before jumping directly into the relationship, firms should analyze the
collaboration architecture. Indeed, collaboration networks differ significantly on their degree of
openness and on their governance mode. The authors identify four different collaboration types:
elite circle (closed and hierarchical), innovation mall (open and hierarchical), innovation
community (open and flat) and innovation consortium (closed and flat).
Closed mode are usually smaller that open ones, and inside these networks you have identified the
knowledge domain in which pick up the solution and you have got the right collaborators in that
field (example Alessi designers).
On the other hand, openness attracts a larger number of problem solvers (more ideas) and,
therefore, you don't have to identify either the knowledge domain or the experts in the field and you
don't have to know your contributors.
However, these networks are not effective in attractive the best players. Certainly, a best player
would like to have weight in decision making, and the more are the participants, the less is the
likelihood of an idea to be picked up. There are certain conditions in which openness is better: you
have to be able to screen the ideas at a low cost and attract problem solvers that you think have the
best chances of providing a good solution. In addition, the problem has to have the characteristic of
modularizability, which means that the problem can be partitioned in well-defined chunks on which
players can work autonomously.
Hierarchical governance is desirable when your organizzation has the capabilities and knowledge
needed to define the problem and evaluate proposed solutions (Innocentive, Eli Lilly).
Conversely, flat modes work well when no single organiza- tion has the necessary breadth of
perspective or capabilities. Flat modes are also appropriate when collaborators will participate only
if they get some say in the decisions.
Designing incentives both financial and nonfinancial that attract external collaborators is crucial
with any of the four modes of collaboration.
A key component of strategy is exploiting a firms unique assets and capabilities. For what
concerns strategy, collaboration decision could be levered in order to establish a new source of
competitive advantage. Pisano and Verganti, in conclusion do not define the best collaboration
mode, but argue that between the four paradigms there is a trade off that should be fostered by
managers to tap the potential of a firm.