a business model for continuous innovation

7/21/2019 A Business Model for Continuous Innovation

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Collaborative Entrepreneurship:

A Business Model for

Continuous Innovation

RAYMOND E. MILES GRANT MILES CHARLES C. SNOW

I n our recently published book, we beganwith the following futuristic scenario:In early 2010, OpWin Global NetworkLLP reported record earnings for the yearjust ended. Total earnings for the partnershipcome from the activities of OpWin memberfirms and from external licensing fees.OpWins performance during the past yearwas driven by a continuing flow of newproducts and services that found favor acrossthe networks multi-industry global technol-ogy markets. New telecommunications hard-ware, such as the full-color mini-camerajointly developed by four OpWin firms,was a major success in Asian markets, andthe fuel cell output regulator developed inOpWins Czech sub-network was licensed toboth General Motors and Ford.

One of the several unexpected successstories was OpWins voice-activated soft-ware system, originally designed for inven-tory control, but adapted by a New Zealandmember firm for cash-flow management inthe Southeast Asian financial services mar-ket. Other OpWin products enjoyed similar

cross-industry success in communications,bioengineering, and nanotechnology.

All in all, said chief executive officer(CEO) Kristen Morris, 2009 demonstratedonce again the power of collaborative entre-preneurship and OpWins ability to crea-tively find markets for both new andexisting products and services. Our strategyrests on three basic principles: investing inpeople; supporting a collaborative, entrepre-neurial culture; and finding and growing

new markets around the world. If we cancontinue to demonstrate throughout the net-work that all possible product and serviceinnovations will be explored, and that colla-boration produces economic as well as psy-chological benefits, then I see no significantlimits to our growth. How are you going tohold back 13,000 entrepreneurs?

Can such a scenario occur? We believethat it not only can, but will occurprobablyeven before 2010. The stage is clearly set: keyrequirements of the total collaborative entre-preneurship model have already been tested,one start-up company has been designedusing OpWins collaborative approach, andnumerous firms throughout the world areinterested in the potential of collaborationto create innovative products and servicesin areas where competitive-based approa-ches have come up short.

I N N O V A T I O N ,C O L L A B O R A T I O N , A N DE C O N O M I C D E V E L O P M E N T

Over 70 years ago, economist JosephSchumpeter first advanced the argument thatinnovation is the primary driver of economicdevelopment. The value of creative destruc-tion, as Schumpeter described the innova-tion process, has been confirmed recently byWilliam Baumol, whose book The Free-MarketInnovation Machine demonstrated empiricallythat firm and inter-firm ability to innovateexplains why capitalist economies histori-

Organizational Dynamics, Vol. 35, No. 1, pp. 111, 2006 ISSN 0090-2616/$ see frontmatter2005 Elsevier Inc. All rights reserved. doi:10.1016/j.orgdyn.2005.12.004www.organizational-dynamics.com

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cally have the strongest growth. Despite itsusefulness for firm growth as well as a coun-

trys economic development, innovation isnot an easy task for the typical firm. Indeed,one survey found that chief executive officersbelieve their firms utilize only 1525 percentof their innovation capacity.

Even the most innovative firms have notbeen able to fully utilize their innovationcapacity. Whether one focuses on Hewlett-Packard Co. in the 1950s and 1960s, XeroxCorporation in the 1970s, Rubbermaid in the1980s, or Intel Corp. or Cisco Systems Inc.today, none of these firms has been able to

figure out how to innovate on a continuous,efficient basis. Various organizationalarrangements have been triedcross-func-tional business teams, internal venture capi-tal processes, creating or acquiring newbusiness units, spinning off new ventures,and forming alliances with or investing inpartner firms. However, the best overall out-come from all of these approaches appears tobe the capability to engage in periodic inno-vation that is mostly limited to the firmsexisting businesses. What is needed and,fortunately, what is becoming increasinglyfeasible is an organizational process thatwill enable innovation to be continuous and tooccur outside a firms traditional industryboundaries.

Many observers of todays business sceneagree that the most underutilized resourceamong firms in advanced economies isknowledge, and that the knowledge genera-tion and sharing process needs to be openedup considerably. The drive to turn knowledgeand other underutilized resources into eco-nomic wealth is what pushes managers to

experiment with new ways of reconfiguringstrategies, structures, and processes. Webelieve that the search for the capability tocontinuously innovate, currently taking placemore or less aggressively within numerousfirms around the world, will result in theappearance of several new organizationalformsincluding the multi-firm collabora-tive network organization.

Collaboration is a process whereby twoor more parties work closely with each other

to achieve mutually beneficial outcomes. It isa much more complex and demanding pro-

cess than cooperation, where desired out-comes are relatively clear, and thedistribution of future returns can be nego-tiated. Collaboration often involves unpre-dictable outcomes and relies heavily on trustand a joint commitment to values of honestyand equitable treatment. Collaboration canbe directed toward any mutually desiredobjective: solving a problem, resolving a con-flict, creating a new product or business, andso on. The concept of collaboration that wesee taking hold in a growing number of

business firms and other types of organiza-tions iscollaborative entrepreneurship: the crea-tion of something of economic value basedon new, jointly generated ideas that emergefrom the sharing of information and knowl-edge.

Collaboration to create and apply knowl-edge for the purpose of commercial enter-prise is very sophisticated behavior, in that itis based on competence and experience,intrinsic motivation, trust among individualsand organizations, and the efficient, full shar-ing of ideas and information. Nevertheless,as with any behavior, collaboration can betaught and learned, and thus over time it candiffuse throughout a society to the pointwhere it becomes a meta-capability. Ameta-capability is an abundant social asset,and until a particular social asset becomeswidely available, organizations cannot tapinto it to operate their business strategies.

Collaboration among individuals andgroups is widespread in professional com-munities, occurring regularly among scien-tists, scholars, doctors, engineers, and other

professionals. Large-scale inter-firm colla-boration, on the other hand, is a somewhatrecent phenomenon, but its origin can beseen in certain case examples involvingactual organizations. For example, beginningin the early 1990s, the small Danish city ofKalundborg has been the site of an evolving,successful program of industrial-municipalcollaboration that has been referred to asindustrial symbiosis. As of 2003, this cross-sector collaboration had created financial

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returns of over $200 million on an investmentof approximately $90 millionan average

annual return of over 16 percent. The sourceof these returns is annual savings from sym-biotic exchanges across a network of muni-cipal agencies and private businesses. TheKalundborg alliance offers evidence that avoluntary, self-directed experiment can leadto an expanding collaborative search forvalue-adding approaches to the utilizationof resources.

Across the firms and government agen-cies that make up the U.S. civil constructionindustry, a collaborative process has

emerged that has produced less carefullymeasured but quite probably larger percen-tage returns than those of the Kalundborgexperiment. Initiated on an Army Corps ofEngineers dam project in the late 1970s, thenew collaborative approach established pro-tocols detailing how, where, and when pro-blems that inevitably arise from complexprojects would be handled. The programresulted not only in reduced conflict andlitigation, but also in construction innova-tions that provided substantial time and costsavings. Program leaders spread the pro-gram across state departments of transporta-tion, and the partnering process (as itbecame known) was subsequently endorsedby national construction associations andrequired by many states. Today, the growingcompetence of U.S. construction firms inpartnering has increased their ability toengage in new approaches to large construc-tion projects, and partnering has becomeboth a firm and an industry asset. Thoughlimited to a single industry, the investmentsin collaborative capability being made by

civil construction industry agencies, firms,and professional and educational institutionsshow the way for other organizations thatwish to engage in large-scale inter-organiza-tional collaboration.

Neither the Danish industrialmunicipalalliance nor the American partnering processin civil construction represents an example ofcollaboration as a true joint enterprise.Although both examples involve businesssituations, neither group of organizations is

focused squarely on the creation of newproducts, services, or marketsand cer-

tainly not oncontinuousinnovation. The firmthat perhaps comes closest to practicing con-tinuous innovation through collaboration ona large scale is the Acer Group. Based inTaiwan, Acer has thousands of employees,operations in 44 countries, and dealer rela-tionships in more than a hundred countries.With revenues of nearly $5 billion, Acer isamong the worlds top personal computermanufacturers, but it is in the process oftransforming itself into a complete globalinformation technology company that in

recent years has started many successful e-business services.Acer is a worldwide federation of com-

panies held together by mutual interest andcollaboration. Some units of Acer are whollyowned by the firm, while others (mainlymarketing and distribution firms) are jointlyowned by Acer and local investors. Bothtypes of firms collaborate willingly withthe other companies in the federationbecause all firms have worked hard tobecome the preferred provider in their par-ticular technical specialty or market. Acerhelps its partner firms in other countries todevelop professional management, obtaininvestment funding, and to become publiclyowned if they desire to do so. Acers form ofcollaborative capitalism is steadily growingin the global economy, particularly in emer-ging markets. However, while Acer is almostable to be continuously innovative up anddown the value chain of the informationtechnology (IT) industry, it is still not adeptat innovating outside the global IT business.

O P W I N G L O B A L N E T W O R K

These three examples indicate that inter-firmcollaboration to produce continuous innova-tion on a large scale is practically feasible.Therefore, it requires only a small conceptualleap to imagine and then describe an orga-nization composed of firms from differentindustries whose collaborative abilities allowthem to pursue a joint strategy of continuous

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innovation. That envisioned organization wecall OpWin Global Network (seeFig. 1).

OpWin is a dynamic network of 60 mem-ber firms and their temporary affiliates. Thenetwork is dynamic in that none of its mem-bers has a fixed role, and the resources ofeach firm are often shared in business ven-tures with other firms, usually but not alwayswithin the network. It is also dynamic in thatits membership has grown dramatically

since its founding, and the process of addingnew members is ongoing.

Each member firm joined OpWin as aprofitable independent entity, and it is eachfirms responsibility to maintain its ability tosupport and grow its own resources withoutrecourse to the OpWin network. In addition,each firm is expected to contribute ideas andother resources that will generate income forits network partners. Firms vary in size fromless than a hundred staff members to a few

thousand, and each firm is expected to serveall its stakeholders in an exemplary manner,in line with OpWins stated pledge to set thehighest standards of customer satisfaction,human resource management, and naturalenvironment sustainability. Each memberfirm measures its own (a) net wealth creation,(b) human resource retention and develop-ment (including educational and skillupgrades of staff), and (c) annual customer

satisfaction. Member firms send this infor-mation to OpWins Central Services Office(which provides educational, intellectualproperty, information technology, and otherservices to the member firms).

Member firms are expected to createproducts and services for their own marketsand to work with other firms in the networkon innovation projects. Within their ownmarkets, firms pursue organic growththrough market penetration with existing


FIGURE 1 OPWINS NETWORK ORGANIZATION


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products or services, while attempting tomeet the expectation that at least half of their

revenues will be generated via continuousinnovation. Innovations in a given firmsmarket come not only from ideas and effortswithin the firm, but also from the continuousscanning of ideas and innovations from othernetwork firms. Each firm describes productideas, development projects, and productservice upgrades in OpWinsInnovation Cat-alog, an electronic database accessible only bymember firms. Not only do member firmspost potential value-generating informationin the catalog; they are also expected to

proactively contact other firms that mighthave an interest in their ideas, projects, ornew models.

Firms in related markets regularly senddesign, marketing, and operating staff toOpWins Market Exploration Workshops,which are held periodically. Moreover, firmsalso collaborate across the network on devel-opment projects that do not have obviousconnections to their own markets. Staff spe-cialists may be invited by another memberfirm to visit and discuss a listed idea orproject, and they may in turn request addi-tional meetings to provide elaboration andpossibly joint pursuit of an idea or project. Insome instances, a staff member from Firm Amay work with Firm B on a particular project,even though it has been determined not tohave relevance in Firm As usual market.When this occurs, Firm B pays for the staffmembers time and effort. Further, if thecontributions from Firm A are later incorpo-rated into a profitable product or service,Firm B is expected to provide an appropriatereturn for Firm A such as a royalty or one-

time payment.In all cases, OpWin firms are expected to

engage in joint development efforts withoutstrictly calculating the costs, benefits, orpotential returns in advance. It is the respon-sibility of the user to recognize contributionsand initiate equitable payment, and to makecertain that the provider is satisfied with theoutcome. On joint projects, it is the marketowners responsibility to propose a sche-dule of returns that is seen as equitable by its

project partner(s). Where new or shared mar-kets are served by a jointly designed product

or service, the participating parties draw lotsin advance to determine which firm will takethe lead in proposing market-deliveryresponsibility and an equitable distributionof returns.

The heavy focus of OpWin firms on con-tinuous innovation often limits their interestin taking an active role to create wealth viathe long-term production of goods or ser-vices. In those cases, OpWin firms work withoutside partners to produce components oreven complete products for OpWin markets.

After assuring the market success of a pro-duct or service, OpWin firms may licensedesigns to outside partners for their ownlong-term sales and service. Licensees, too,are required to meet OpWins customer satis-faction and environmental standards.

To become a member of OpWin, a firmmust demonstrate its competence and trust-worthiness. This can often be achieved by thesuccessful completion of a single collabora-tively generated innovation project. At anypoint, a firm can apply for membership,which must be voted on by all members afteran OpWin review team has assembled asponsorship document. Alternatively, a firmmay be affiliated with OpWin on a tempor-ary or infrequent basis, typically as a licenseeor other type of contractual provider.

In summary, OpWin member firms oper-ate independently in their own markets andin collaborative alliances with members ofthe network to design and take to market acontinuous stream of innovative productsand services. However, OpWins alliancesdiffer from other alliances in several impor-

tant ways. For example, OpWin initiativesare based on ideas and activities that areviewed as openavailable to all memberfirms, with users responsible for acknowl-edging the source of their ideas and thecontributions of their partners. Also, OpWinalliances are open-ended rather than special-purpose, and rewards are determined afterthe fact rather than in advance. Finally, roles,responsibilities, and returns are governednot so much by contracts (though these are

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widely used) as by norms of equity andcollegiality, greatly aided by an agreed-on

set of operating protocols (such as userresponsibility for provider equity and satis-faction). Overall, OpWin member firms haveenjoyed great success to date by workingcollaboratively with each other to find appli-cations for their ideas and knowledge inmarkets outside their traditional industries.

F R O M F I C T I O N T O R E A L I T Y

To this point, we have argued that, in the

future, collaborative entrepreneurship willbe a major business model, and that a com-munity of collaborating firms linked togetherin a network will be its supporting organiza-tionalmodel. In the case of oneparticular firm,the future is now. An entrepreneur who hasstarted a number of successful business ven-tures, and believed that an OpWin-type orga-nization was perfectly suited to a situation hewas aware of in the medical community,formed a new company called Syndicom.

The focus of Syndicoms entrepreneurialefforts is the community of spine surgeons inthe U.S. Spine surgeons frequently work onvery difficult and risky cases, and it is clearlyin the patients as well as the physiciansinterest to have as much medical knowledgeas possible brought to bear on such cases.Syndicoms first product was an easy-to-usepiece of software that would allow all thedoctors who were connected electronicallyby it to comment anonymously on eachothers most unusual or difficult cases. Priorto the availability of this product, an indivi-dual spine doctor typically brought difficult

cases to the attention of a few well-trustedcolleagues who would comment by tele-phone or e-mail after viewing a faxed pictureor a mailed set of X-raysa limited andcumbersome process.

Although Syndicom is presently lessthan a year old, it has been successful in atleast two ways. First, its initial product isvery valuable, and interest and subscriptionsamong spine surgeons are growing rapidly.It appears that this product, and any follow-

on products that might ensue, will give Syn-dicom the financial returns it needs to sur-

vive. Second, and even more important,Syndicom understands how the process ofcollaborative entrepreneurship works andhow to manage the kind of organization inwhich collaboration can be used to createinnovative products and services. For exam-ple, members of Syndicom worked closelywith the spine doctors to identify the objec-tives, both technical and behavioral, that theproduct would have to accomplish. Continu-ing in the collaborative mode, the partiesdeveloped a set of protocols that would

encourage the community of spine doctorsto use the product properly and thereby helptheir geographically far-flung colleaguesimprove patient care (Send in your unusual,difficult cases; Reply promptly and con-structively; and Close the loop by report-ing outcomes and giving credit). Buildingon its organizational strengths and earlysuccesses, Syndicom is now pushing out-ward, first by attempting to develop inno-vation communities within other medicalspecialties so that physicians can freelyexchange ideas and insights, and second,by reaching out to related types of firms(e.g., medical device manufacturers and dis-tributors) that might play a role in futureinnovation projects.

L E S S O N S L E A R N E D

As we discussed, the consensus of priordecades was that barriers inside firms andmarkets were constraining knowledge-dri-ven innovation, and therefore efforts were

made to fix existing business models, orga-nization structures, and management pro-cesses. Now, the emerging consensus isthat rather than attempting to rework oldapproaches, the focus should be on creatingnew models that open more avenues to col-laboration within and across firms. Our fic-tional OpWin is one such model aroundwhich firms like Syndicom can experiment.Indeed, in a truly innovative economy, as oneventure capitalist told us, every entrepreneur



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should be attempting to start his or her ownOpWin network. As he pointed out, the pri-

mary contribution of the entrepreneur is tocreate new relationships among ideas,resources, and marketsand where betterto practice this creative process than withina collaborative network of firms operatingacross industry boundaries.

However, the journey from conceptualconsensus to effective, widespread practicewill not be easy. Our observations of Syndi-coms efforts, and our understanding of othercollaborative entrepreneurial experiments,suggest that this new business model will

have growing pains similar to those of itspredecessors. At least four familiar chal-lenges are already visible, and the pioneeringorganizations that are grappling with thesechallenges offer important lessons to man-agers who are considering the new businessmodel.

T h e P r o c e s s o f C o l l a b o r a t i v eE n t r e p r e n e u r s h i p C a n O n l y b eL e a r n e d T h r o u g h E x p e r i e n c e

Collaboration is a complex, potentiallyfragile process, and it cannot be easily accel-erated. The temptation, at Syndicom andother pioneers, will be to cut corners if pos-sible and to lock in whatever appears toworkwithout much reflection. Forty yearsago, such temptations doomed many busi-ness models focused on the pursuit of relateddiversification because they short-changedthe development of an effective process fordecentralized decision-making. Similarly,because it was easier and faster, many earlysupply chain networks relied solely on top-

down direction that limited the ability ofsuppliers to make valuable inputs into pro-duct and process design.

While the designers of Syndicom and themembers of its knowledge-sharing commu-nity understand that collaboration is a volun-tary, self-managing process that can only beencouraged and facilitated, the temptation totry to move participants quickly toward stan-dardized practices is always present. More-over, the temptation is strong to teach

participants rather than help them learn byreflecting on their own experiences. To be

effective in the long run, collaborative com-munities must evolve at a pace that is com-fortable to their members and in such a waythat members fully internalize necessarybehaviors.

A F i r m s A b i l i t y t o C o l l a b o r a t ew i t h O t h e r F i r m s S t a r t s f r o mB e i n g A b l e t o C o l l a b o r a t eI n t e r n a l l y

It is likely that firms at the center of future

collaborative communities will be therebecause they have developed a strong cap-ability for collaboration inside their ownorganizations. In OpWin, the communitygrew when two firms with an ongoing, suc-cessful collaborative experience invitedanother firm with complementary resourcesto join them. The newly invited firm waschosen not only because of its particulartechnology and markets, but also because itshared the core values of a collaborativecommunity. Firms signal their values andtheir potential as collaborative partners in avariety of ways, and managers who possesscollaborative skills can recognize and rein-force those values. Of course, one major cluethat a firm has collaborative skills and valuesis the fact that it is already highly innovative.

C o l l a b o r a t i v e A b i l i t y R e q u i r e sO n g o i n g I n v e s t m e n t s i nI n t a n g i b l e A s s e t s

Historically, many business models havefailed because those who adopt them ignore

the investments in soft assets that theyrequire to function as intended. Henry Fordsucceeded because he understood that he notonly had to invest in a vertically integratedproduction process, but he also had to investin a workforce that was stable and well-paidenough to learn and apply the specializedskills the process required. We now knowthat trust building is a time-consuming pro-cess, and that the development of collabora-tive capabilities requires not only learning

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new values and behaviors but also unlearn-ing many old habits. Still, it is possible that

many experiments with the collaborativeentrepreneurship model will fail becausethe required investments of time and trainingwill exceed the expectations of even the mostwell informed managers.

In the Syndicom organizational design,there is no central owner. All participants,including Syndicom, are investing volunta-rily in a jointly owned process of collabora-tion. Although the company has no formalmeans of measuring intangible assets such asthe ability to collaborate and develop and

sustain trust, there is a widespread intuitivebelief that certain intangible assets are valu-able and are providing significant returns.

T h e D i f f u s i o n a n dS u s t a i n a b i l i t y o f C o l l a b o r a t i v eE n t r e p r e n e u r s h i p H i n g e o nS o c i e t a l V a l u e s

The collaborative model that Syndicomhas built will be sustainable only if the valuesunderlying it, and the outcomes produced byit, are compatible. Maximally effective colla-boration occurs among caring participantswho value the contributions of their collea-gues and are concerned with their equitabletreatment. To sustain those values inside thecommunity, similar values must be exercisedexternally, and desirable outcomes mustresult. That is, the products and servicesthose communities produce must reflectthe same concerns for fair and equitabletreatment demanded within the community.In OpWin, high-quality products and ser-vices not only are fairly priced, but every

stakeholder such as customers, employees,and local communities benefits fromOpWins values and its philosophy of equi-table treatment.

Highly competitive societies with strongmaterialistic and acquisitive values run therisk of focusing more attention on capturingones own returns from innovation than oncreating and sustaining real economicwealth. It seems to us that the most successfulcollaborative communities will be those

whose innovative contributions support,and are supported by, strong social values.

Our anecdotal evidence, for example, sug-gests that there is currently more experimen-tation with multi-firm collaboration inNorthern Europe than anywhere else in theworld.

C O N C L U S I O N

We have been most encouraged by theresponse to our ideas and suggestionsregarding collaborative entrepreneurship.

We have presented our work in a varietyof settings, including business programs onthe radio, executive development programs,entrepreneurship conferences, and M.B.A.specialty courses. Based on these initialexperiences, we believe that the time maywell be right for broad experimentation withOpWin-like business and organizationalmodels. Indeed, we are struck by two themesthat seemed to emerge in each of the variousaudiences we have addressed. First, thepotential for collaborative communities toenhance innovation-driven wealth creationmakes sense to those who thoughtfully con-sider it. In contrast to other recently proposedways of doing business, there has been verylittle knee-jerk reaction to the collaborativemodel as one that will not work. Multi-firmcollaboration does not hamper the efforts ofindividual firms to innovateit simply aug-ments those efforts by providing individualfirms which possess collaborative capabilitya much enhanced competitive advantage.

Second, because it is based on positivehuman motives and characteristics, the pro-

cess of collaboration offers a much desiredrespite from the constant concern that onesinnovative efforts will fall victim to a systemfocused on the appropriation of wealthrather than on its creation. We are fastbecoming convinced that many people aresimply fed up with the crass, exploitive, evencriminal behavior of managers evidenced inthe past few years. Collaborative entrepre-neurship, in stark contrast, offers a way ofdoing business that is exciting, productive,



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and nonexploitive. Our experiences withSyndicom, and our discussions with others

involved in collaborative community experi-ments, lead us to believe that the activitiesand responses of those individuals are verysimilar to those observed in the usual start-up firm. The typical collaborative session ischaracterized by those involved as interest-ing, if not exhilarating. The inherent rewardsof collaborative interaction in a trusting, sup-portive community are the driving forcebehind the desire to conduct businesstogether.

To this point, Syndicoms community-

building efforts and other related experi-

ments have not yet demonstrated either theirsustainability or their full potential. Even

though the results to date have been positive,we are excited as much by the scope of thoseexperiments as by their individual achieve-ments. Such experimental periods in the pasthave produced todays time-tested strategiesand organization structures, and it may wellbe that a new business model for continuousinnovation is now entering one of those per-iods.

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SELECTED BIBLIOGRAPHY

Our bookCollaborative Entrepreneurship: HowCommunities of Networked Firms Use Contin-uous Innovation to Create Economic Wealth(Stanford, CA: Stanford University Press,2005) discusses the growing need for themulti-firm collaborative network organiza-

tion in todays global economy and the majorbarriers that stand in the way of its arrivaland development. Our description of OpWinGlobal Network shows managers and orga-nizational designers how a multi-firm colla-borative network can be formed andoperated. Also, all three authors have beeninvolved in various capacities with the devel-opment of Syndicom, and are tracking itsgrowth and management challenges in orderto learn more about the process of buildingcollaborative communities for business pur-poses. You can visit Syndicoms web site

(www.syndicom.com) and/or contact mem-bers of its management team for additionalinformation about the practicalities of com-munity building.

For an overview of the process of colla-boration, see the classic article by D. G. App-ley and A. E. Winder, An EvolvingDefinition of Collaboration and Some Impli-cations for the World of Work, Journal ofApplied Behavioral Science, 1977, 13, 279291,where the authors argue persuasively thatcollaboration can only occur when certain

conditions are present, such as voluntary

relationships in which the parties care forand are committed to each other. The net-work form of organizing is discussed by R. E.Miles and C. C. Snow,Fit, Failure, and the Hallof Fame: How Companies Succeed or Fail (NewYork: Free Press, 1994). The various ways

that trust can be built among firms in a net-work organization, and the means by whichtrustworthiness can be communicated, arediscussed in R. C. Solomon and F. Flores,Building Trust in Business, Politics, Relation-ships, and Life(Oxford, England: Oxford Uni-versity Press, 2001). Successful collaborationpartially depends on how positive psycho-logical capital is managed in an organization.See F. Luthans and C. M. Youssef, Human,Social, and Now Positive Psychological Capi-tal Management: Investing in People forCompetitive Advantage, Organizational

Dynamics, 2004, 33, 143160. A good descrip-tion of how collaboration works inside anorganization is given by L. L. Berry, TheCollaborative Organization: Leadership Les-sons from Mayo Clinic, OrganizationalDynamics, 2004, 33, 228242. For the argu-ment that European social values may bemore supportive of collaborative entrepre-neurship than the values found in other cul-tures, see J. Rifkin, The European Dream: HowEuropes Vision of the Future is Quietly Eclip-sing the American Dream (New York: Penguin,

2004).

Raymond E. Miles is Professor Emeritus and the former dean of the HaasSchool of Business at the University of California, Berkeley, CA 94720. Heis also a former director of the Institute of Industrial Relations at UC-Berkeley and has served as a visiting professor at numerous universitiesin 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: [email protected]).

http://www.syndicom.com/mailto:[email protected]:[email protected]:[email protected]:[email protected]://www.syndicom.com/


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Grant Miles is an associate professor of management in the College ofBusiness Administration at the University of North Texas, Denton, TX

76203. His research interests focus on the role of knowledge, learning,and collaboration in the process of organizational adaptation. He hasconsulted with both U.S. and Canadian companies on various aspects ofstrategy and organization (Tel.: +1 940 565 3469; e-mail: [email protected]).

Charles C. Snow is the Mellon Foundation Professor of BusinessAdministration and chair of the Management and Organization Depart-ment in the Smeal College of Business at Penn State University,University Park, PA 16802. He does research on global business strategyand new organizational forms, and he has taught management subjectsto executives in over 25 countries (Tel.: +1 814 865 2463; fax: +1 814 8637261; e-mail:[email protected]).

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mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]

a business model for continuous innovation

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