Collaboration and Innovation: Management Challenges Explored.

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collaboration has a huge potential to unlock innovation possibilities. Inter-departmental innovation collaboration initiatives can tear down silos, overcome boundaries and increase productiveness (Hansen, 2009). This is possible because collaboration fosters information exchange, increases flexibility of the workforce and improves functional performance of new products (Cuijpers et al., 2011). Moreover, Cuijpers et al. (2012) found out that inter-departmental innovation collaboration is partially positively related with firm-level innovation performance.

These benefits seem worth every effort, except that they will only appear when collaboration is executed well. As MacFayden (2014) puts it: ¨Innovation is a symphony of collaboration¨. Without a proper orchestra, the symphony will not be harmonious. Roles and expectations must be clear for each participant in the collaborative effort.

If execution falls behind, the collaborative effort might also undermine instead of improve firm performance (Hansen, 2009). The case example Hansen takes in his article, is about DNV, a company in which interdepartmental collaboration did not take off properly. Due to mistakes in prioritizing, failed cross-pollination, missed cross-selling opportunities and shifted focuses from headquarters, the collaborative effort finally had to come to an end.

Cuijpers et al. (2012) also empirically support the negative effects of collaboration by showing how inter-departmental innovation collaboration is positively associated with innovation project termination as well as innovation project delay. However, innovation project delay and termination do not negatively relate to overall firm innovation performance (Cuijper et al., 2012).

A method of acknowledging these downsides is to take into account the opportunity cost of collaboration and the collaboration costs itself (Hansen, 2009). Where the opportunity cost relate to time, effort and resources used by the effort, the collaboration costs arise from the challenges involved in working across departmental boundaries (Hansen, 2009). Cuijpers et al. (2012) argue that these costs can include time and resources that are used in the process of collaborating however, the costs are not limited to this. Also included in the costs of collaboration are the risk of coordination failures (project terminations) and project delays.

Sometimes, collaboration is being impeded by a large physical distance or because people

with a certain type of personality find it hard to share information (Hassandoust and Kazerouni, 2011). Crossing these borders in order to realize collaborative efforts might be costly in nature, for example if someone has to take regular flights and hotels in order to properly collaborate. The costs may or may not outweigh the benefits that come along with collaboration.

Also, in some knowledge-intensive industries with a fast growing, diffuse and complex structure of knowledge, the locus of innovation transcends company profiles (Fjellstad, Snow, Miles and Lettl, 2012). In order to properly innovate, companies in these industries are open to collaborative efforts because it increases value creation, saves on resources and shares knowledge (Fjellstad et al., 2012). These collaborative efforts are inter-company instead of inter-departmental and are considered external collaboration (Fjellstad et al., 2012). However, for some large global organizations, departmental boundaries might mirror these boundaries. This paper argues this view with support from Nissen et al. (2014) that perceived competition between inter subsidiary relations increases transfer costs as well as search costs. This, combined with a large distance between offices, might resemble the need for office-transcending collaboration to increase value creation, save on resources and share knowledge.

Management challenges

As this paper has demonstrated, there are several management challenges involved when it comes to collaboration, knowledge sharing as part of collaboration and innovation management. As for now, the challenges will be summarized.

The first challenge that is notable to be addressed is about the impact of social properties on knowledge sharing for collaboration. As argued by Hansen et al. (2005), it is important to discuss this challenge regarding three phases: deciding to seek knowledge, seeking knowledge and transferring knowledge. The search and transfer costs of transferring knowledge vary on these three phases. Hansen et al. (2005) have shown us that inter subsidiary relationship strength has a positive impact on search costs and a negative impact on transfer costs of knowledge sharing. This poses an interesting dilemma because the positive as well as the negative impact are both cost-related.

Another important finding in the research by Hansen et al. (2005) is about managing perceived competition. The level of perceived competition among inter subsidiaries has a significantly high positive impact on search costs as well as transfer costs and it leads to hoarding of knowledge, which in turn creates barriers for collaboration (Hansen et al., 2005)

Another different challenge lies in the balance between collaboration and cooperation, as examined by Nissen et al. (2014). Nissen et al. (2014) demonstrated by the example of three case studies that knowledge sharing in team needs balance in the collaborative and cooperative form

of interaction and requires a proper shared knowledge base. When relying too heavily on collaboration as a knowledge sharing form of interaction, decisiveness drops. Whereas relying too much on cooperation prevents the development of a shared knowledge base which, in turn, leads to a misbalance in role defining and participant expectations (Nissen et al., 2014).

Both Hansen et al. (2005) and Nissen et al. (2014) recognize the importance of a distinction in the sharing of tacit and explicit knowledge. As stated earlier, relationship strength in an interdepartmental team has a positive impact on the search and transfer cost of knowledge. However, a strong relationship has a negative effect on the transfer cost of tacit knowledge (Hansen et al., 2005). Nissen et al. (2014) argue that sharing this tacit knowledge requires close interaction and the sharing of a communal knowledge base. The challenge here lies in that Nissen et al. (2014) state that close interaction (cooperation) is required in order to share knowledge through collaboration and Hansen et al. (2005) state that a close relationship amongst interdepartmental teams increases the search and transfer of explicit knowledge.

The last challenge this paper will address is about knowing when to collaborate. Hansen (2009) elaborates on collaboration costs and collaboration benefits,