Is collaboration the new innovation?

From carrying passengers to supplying energy, companies are collaborating to design innovative business opportunities. But do the collaborations benefit all partners?

‘Collaboration is the new innovation’ is a motto that reflects the popularity of individuals, start-ups and organisations working together for a shared aim (HBR, 2016; Gardner and Ibarra, 2017). Business leaders and experts highlight the potential, freedom and myriad opportunities made possible by collaboration and technology (Chase 2015, Mocker et al., 2015).

Developments in technology have certainly led to innovative products and services designed for customers. In the sharing economy, companies such as Airbnb and Uber work with micro-entrepreneurs, utilising their existing, excess resources to offer highly flexible services to customers. However, are the businesses really designing the roles of individuals as collaborators or partners? Or, are the micro-entrepreneurs sometimes pieceworkers, with origins in the garments industry in the 19th century? This prompts the question: how can collaboration work effectively for micro-entrepreneurs and organisations alike?

Collaboration for fast-changing markets

Joe Tidd and John Bessant (2013) state that markets are changing swiftly in keeping with technology and many companies recognise they do not have the technological abilities to respond. This has led to an environment where collaboration is sought after by conglomerates and start-ups. Among these, a recent significant partnership is between Intel, Microsoft and blockchain developers to deliver record-keeping technology to businesses (Intel, 2017).

Yang Chen Østengen (2017) of the technology and services consultancy Capegimini says: ‘I am passionate about linking big companies with start-ups because start-ups have so many innovative ideas and are agile, while big companies do not have that cultural character…. Equally start-ups can benefit by being sponsored by large companies.’

However, she points out that if the design strategy does not encompass a unified goal and benefits for all parties, there is a risk the partnership will fail. Chen (2017) adds: ‘I have also seen collaborations collapse when the profit-and-loss structure of a company contradicts the goals of the partnership formed. In that case, the management must give people incentives to collaborate.’

Design thinking in businesses

Bruce and Bessant (2002) highlight that design decisions are used at all stages in a business, whether or not people are aware of them. They identify that ‘design is an organisation-wide task which needs to be managed in an integrated and high-involvement fashion’ (Bruce and Bessant, 2002, p.47). In terms of a business’s strategy, Watkins (2007) defines it as: ‘a set of guiding principles that, when communicated and adopted in the organisation, generates a desired pattern of decision making’. He argues that there are four key areas that must be aligned as a business develops: the mission (the ‘what’), the vision (the ‘why), the ‘value framework’ (the parties ‘with whom’ the business is working), and the strategy (‘the how’). It can be argued that the design of the ‘value framework’ influences the potential of the collaboration as well as the products and services sold to customers.

Collaborations in the sharing economy

By developing technology to create innovative designs, companies such as Airbnb and Uber have expanded rapidly across the globe to reach diverse micro-entrepreneurs willing to offer their resources to customers through each company’s app. The origin of this business model is ‘product to service’ (Ovans, 2015). Airbnb and Uber, alongside other technology companies, have adapted it to created disruptive innovations that rent or sell existing resources, whether these be people’s time and skill, homes, cars or energy.

Both Airbnb and Uber enable customers to use an app to rent home space from a host or a book a lift from a ‘partner’. Both services are less expensive than traditional hotels and taxis, and both business models rely on individuals being willing to collaborate with the companies by making space available for people to rent or by a driver with a car carrying a passenger for a fee. In the case of Airbnb, hosts set their prices (onto which the company adds commission when customers make their payments), plus they choose when and to whom they rent their space. The company also provides insurance to hosts for damage by guests. Uber describes their drivers as ‘partners’; however, reportedly, Uber determines the routes of the drivers, deducts amounts from their payments and penalises drivers if it believes they reject too many fares (Harris, 2015). While both companies have achieved significant success in attracting customers, drivers working with Uber in a number of territories have been publicising their working conditions and pursuing legal action over their status (Harris, 2015; Davies, 2017).

Applying human-centred design to collaborations

Therefore, while Uber’s design for its service to customers has been a commercial success, the design of its relationship with its partner drivers is flawed. The reason may be found within the company’s design decisions. As Bruce and Bessant (2002) outline, companies, or individuals within them, continually take strategic design decisions consciously or unconsciously. While Uber was successful in its design for customers, it did not design its relationship with its partners – or territories’ regulatory practices – effectively (Butler and Topham, 2017). Tim Brown and Roger Martin (2015) note the importance of design not only for a service or product, but also for a company’s internal thinking and processes, and for all stages of an intervention within a system. The human-centred design process of the Stanford Design School (figure 1), provides a method that guides individuals to focus on all stakeholders for whom they are designing within a particular context. Comprising stages of ‘empathy’, ‘define’, ‘ideate’, ‘prototype’ and ‘test’, the method is an iterative process where designers must work with all connected stakeholders. Furthermore, it can also be combined with business management processes to ensure all partners large and small are considered (Watkins, 2007; figure 1). By companies actively designing for all stakeholders, they can build positive partnerships in the contexts micro-entrepreneurs operate in, and prosperity for the long term.

Article by James Shackleton

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