Alliances for innovation : a structural perspective on new business development in cooperative ventures

Abstract: The innovation race, with ever-shortening product lifecycles and esca-lating innovation costs, has made alliances for innovation a central competitive strategy at many firms. Alliances provide access to a broader pool of knowledge that would be difficult to develop inside the firm, as well as a way of sharing risks. However, many innovation-based alliances fail. The literature argues that one important reason for this is the tension created by the contradictory recommendations of alliance management, whereby fixed contracts are stressed, and the recommendations for the innovation management of flexible and adaptable structures in order to support the innovation process. This thesis addresses the tension between the contractual logic of alliances and the dynamics of innovation by studying how different alliance structures, e.g. structures for coordination and communication, and innovation structures, e.g. modularity, can interact when shaping the innovation process. Based on in-depth studies of the innovation process in nine innovation-based alliances, the main contribution made by this thesis is a process model for managing innovation-based alliances. A central conclusion is that the structure of the alliance and the design of the innovation have to be adapted to each another in order to enable progress during the innovation process. The process model for innovation-based alliances consists of three phases; exploration, alignment, and commercialization. Important challenges during each phase are identified and different ways of managing these challenges are suggested. Although there is no shortcut to a successful innovation-based alliance, many difficulties can be avoided if management forms and subsequently adapts various alliance structures, in addition to the internal and external design of the innovation, so that the alliance and innovation become aligned. This alignment requires management to approach the alliance and innovation processes as one coalesced process whose character depends on the variety of the innovation.