In the modern, global, marketplace it’s increasingly likely that you will have a number of collaboration partners. I’ve written previously about the various forms of partnerships you can enter into, and the ways you can grow your partner network.
When designing your collaboration network, there are three broad designs you can look to incorporate.
- Hub and spoke – Like the wheel of a bicycle, the hub and spoke model sees your company placed firmly in the middle, with spokes then representing the links outwards to your collaboration partners. Such a network sees your company as the most important member of the network, as few (if any) of your partners are connected to one another. Such a model was used very successfully by Apple, and represents the opportunity to make revolutionary advances in innovation, due to the powerful position you have at the centre of the network, pulling in information from an often disparate range of partners.
- Integrated model – The integrated approach to network building sees a significant growth in connectivity between your partners. In this kind of model it is more of a partnership of equals, where each member brings something valuable to the network. Members typically share the same types of information and are more likely therefore to develop common norms due to the frequent exchange of information. This type of model is excellent for complex projects that require extensive collaboration and iterative innovations.
- A hybrid design – The final approach to network building reflects a combination of these two approaches, whereby some of your collaboration partners are connected, and some aren’t. As you can imagine, the more this network leans towards one or other of the first two designs, the more it will reflect their respective merits. So the less connections it has, the more suited to breakthrough innovations, whilst the more connections, the more suited it is to collaboration and cooperation.
Despite the strong need for such partnerships, striking up a successful collaboration remains difficult, especially as the complexity of the arrangement grows. For instance, it’s estimated that over 100 companies worked together on the latest Boeing aircraft.
Successful management of your partnership network
A recent study explored how you can successfully manage such complex relationships. The authors investigated nearly 150 projects that utilized a wide range of partners in an engineering context.
The average project had a budget of $3 million and roughly 60 team members from both the host company and its partners.
The analysis explored both how successfully the team worked, plus the impact of the project on the revenue of the host organization by the partnership (versus doing it all in-house).
The success was varied, with some seeing a drop in revenue of 50 percent, whereas others reported a boom of 90 percent.
What makes a partnership successful?
The study found that the key to success was the expectations placed on each partner when they entered into the team. It was a bit like Goldilocks. When too little, or too much, was expected of the partner, returns were not good. When they shared an average amount of resources with the hub organization however, the returns were usually excellent.
“In essence, we argue that there are positive returns from multi-partnering efforts when partnering scale increases from [low to medium] levels,” the authors say.
Breadth vs depth
Of course, it isn’t quite as simple as that. For instance, if the partners resources are spread more widely throughout the value chain of the project, this tends to make things worse for all concerned.
If the depth of the partnership is very focused on a particular job within the process however, then the results tend to be excellent.
It seems, therefore, that when entering into partnerships with external firms, it’s best to devote their energies and resources as tightly as you can to ensure you get the most out of the relationship.
