PROS-083 - ALBA Graduate Business School

EXPANSIVE LEARNING AND NEW PRACTICE CREATION: A
CONCEPTUALIZATION OF COLLABORATING IN INTER-ORGANIZATIONAL
PRODUCT INNOVATION
FLEUR DEKEN AND KRISTINA LAUCHE
Delft University of Technology
[email protected]; [email protected]
Abstract:
This paper addresses the dynamic process of coordinating across organisational boundaries in the
context of product innovation. It aims to advance the current understanding of interorganisational product innovation. We present a conceptualisation based on cultural historic
activity theory. The main premise is that through disturbances induced by contradictions between
the activity systems of the different organisations, there is a need to (partly) align work
practices—potentially leading to work practice innovation—and practitioners need to (partly)
integrate their different, fragmented perception of the design object—potentially leading to an
expanded view of the object of design.
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INTRODUCTION
This paper addresses the dynamic process of coordinating across organisational boundaries in the
context of product innovation. Many products nowadays require a range of knowledge and
technical capabilities that a single company may not posses; therefore, participating in interorganisational networks has become an often followed strategy (Gulati, 1998). Increasingly more
product–service and hardware–software combinations are developed; products from different
domains are combined into integrated solutions. These are often the result of lateral
collaborations between highly diverse organizations, in addition to the existing vertical links
across the supply chain.
Product innovation aims at “bringing new products and services into customers’ use, and
encompasses the whole process of conceptualizing, developing, designing, manufacturing,
marketing, and distributing new products” (Dougherty, 2008, p. 418). Therefore, innovating is
more than generating a novel idea; it also includes the development and implementation of a
novel idea (Van de Ven, Polley, Garud, & Venkataraman, 1999). It is a highly complex, multifaceted, uncertain, and dynamic activity and, as such, is difficult to coordinate. Compared to
other complex tasks—e.g. flying an airplane—innovating has an indeterministic nature (Schön,
1984; Simon, 1981). In innovation, “one can never get it right” as von Hippel and Tyre argued
(1995, p. 12), rather, “innovation may best be seen as a continuous process, with particular
product embodiments simply being arbitrary points along the way”. What is needed to perform
well is unknown a priori; it is constructed over a project’s course and performance criteria often
chance over a project’s course (Van de Ven et al. (1999). Unlike routine or operational tasks, a
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well-coordinated process does not guarantee a successful innovation (Gerwin & Barrowman,
2002).
Innovating has an inherent cross-functional nature (Bucciarelli, 1994); knowledge of
multiple fields is needed, e.g. manufacturing, design, ergonomics, and marketing. Carlile found
“that knowledge is localized around particular objects and ends, is embedded in a particular
practice, and is invested in a given outcome” (Carlile, 2006, p. 105). These diverse knowledge
bases must be integrated and embodied in the innovation. Therefore, innovating requires
coordination of activities across departments and communities of practice. Bridging these
boundaries between communities, for example between product development and manufacturing,
implies extra translation and coordination efforts (Bechky, 2003), which is likely to increase if
also multiple companies are involved.
When organizations join forces in product development, they can draw on a more diverse
knowledge base, which is commonly seen as an enabler for creativity and innovation (J. S.
Brown & Duguid, 1998; Page, 2007). However, this cognitive diversity simultaneously imposes
challenges of overcoming interpretive barriers (Dougherty, 1992) and coordinating the set of
interdependent tasks between diverse actors. Edmondson and Nembhard (2009) argue that coping
with these challenges also presents a valuable learning opportunity and as such these barriers can
also be seen as benefits.
Past research into interorganizational collaborations mainly focused on formal coordination
mechanisms and the structural properties of networks (Swan & Scarbrough, 2005). Since in the
early phases of interorganizational project few formal coordination mechanisms are in place,
focusing on emergent coordination mechanisms (Okhuysen & Bechky, 2009) is key to
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understand how diverse actors can coordinate the dispersed tasks across organizational
boundaries.
Furthermore, the literature on inter-organisational collaboration has focused predominantly
on the relation between the initial conditions at the start of an alliance and the outcomes (Doz,
1996). So far, scant research succeeded in capturing the dynamics of inter-organisational
collaboration. The Minnesota Innovation Research programme found in their extensive
longitudinal study that often these initial conditions changed considerably during the innovation
journey (Van de Ven, et al., 1999). More recently, studies of inter-organisational collaboration
also found indications that the initial conditions often change over the course of the project (de
Rond & Bouchikhi, 2004; Doz, 1996; Vlaar, Van Den Bosch, & Volberda, 2007). Therefore, the
underlying causal explanations in the literature are underdeveloped—most studies treated the
process through which initial conditions influence the project outcome as a ‘black box’, thereby
ignoring the dynamics and evolutions of the collaboration over time (de Rond & Bouchikhi,
2004). Doz (1996) pled for more research regarding the process of collaboration, to open the
black box between input and output.
Finally, the mediating role of the material world and the evolving nature of artefacts used
and created by organizations was typically ignored by scholars (Rafaeli & Pratt, 2006). These
three limitations of the literature, the focus on formal coordination mechanisms and initial
conditions only and the missing role of artefacts, are addressed in the proposed framework.
In this paper, we conceptualize the coordination of product innovation in lateral interorganisational networks, as opposed to a mere division of labour across the supply chain. This
means that we focus on networks of organisations that depend on each other for developing a
new product. Our focus is on integral and joint task, as such configurations lead to the most
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stringent coordination needs of the work between the organizations. In integral tasks, the task
interfaces are specialized and paired rather than being standardized and decoupled in a modular
configuration (Ulrich, 1995). In joint tasks, the organizations work collaboratively rather than
sequentially (Gerwin & Ferris, 2004).
We view inter-organizational innovation as a heterogeneous, complex, social
phenomenon and following De Rond and Bouchikhi (2004), focus on the ‘becoming of’ such
relations. Our research adopts a practice perspective to develop a conceptual process model of
inter-organisational innovating. Practices can be seen as “socially recognized forms of activity,
done on the basis of what members learn from others” (Barnes, 2001, p. 19). The term ‘practices’
refers to “the coordinated activities of individuals and individuals in groups in doing their ‘real
work’ as it is informed by a particular organisational group or group context” (Cook & Brown,
1999, p. 387/386). Our conceptualization is based on activity theory (Engeström, 1987; Leont'ev,
1978) and is specifically apt for focusing on the emergent and ongoing coordination.
We first explain the theoretical background and development of our model, and then
illustrate it with a preliminary case study. Both the theory and the model address the temporal
dynamics, the development of shared practices, and the shaping of a shared object of innovation.
2 TOWARDS A MODEL OF INTER-ORGANISATIONAL INNOVATING
Along with several other scholars, we draw on activity theory as a framework for studying
people’s work practices (f.i. Blackler, Crump, & McDonald, 2003; Engeström, Puonti, &
Seppänen, 2003; Jarzabkowski & Seidl, 2008). Activity theory frames human development as a
socially mediated process in a particular cultural and historical context; it perceives social
interactions as the foundation for understanding people’s own and others’ actions (Vygotsky,
1978).
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The term ‘activity’ is fit for organisation studies since it stresses that people “do not just
think, they act on the world and do this collectively” (Blackler, 1993, p. 875) and, therefore,
draws attention away from the cognitive, individualistic view towards the mediated relation
between culture and individual cognitive functioning. Compared to theoretical approaches such
as actor-network theory, activity theory emphasized the opportunities and ongoing development
of collecting competencies rather than the how patterns are re-enacted over time (Blackler, et al.,
2003), i.e. it stresses more the productive view rather than the reproductive view (Østerlund &
Carlile, 2005). Since innovating necessarily involves change, this productive view is suitable
(Miettinen, 1999). Activity theory focuses specifically on the tension between order (work as
usual) and disorder (being confronted with really new situations).
Activity theory emphasizes the cultural mediatedness of activity: communities cannot be
understood without taking into account the cultural means that shape their identities and help to
recreate themselves in the way that Blues notes captures and preserve a musical tradition
(Miettinen, 2010). The mediated nature of innovating is described by Carlile: “the material world
not only is the medium that shapes the knowledge that individuals use and value, but is also a
collective outcome— that is, a social and contested process that produces a final product that can
be sold to the customer for a profit” (Carlile, 2006, p. 102).
We propose to study inter-organisational cooperation as multiple activity systems working
on a partially shared object (Engeström, Engeström, & Vähääho, 1999), following for instance
Puonti (2004), who studied the object formation during inter-organisational cooperation in
economic crime investigations. Our study builds on the third generation of activity theory
(Engeström, 2009) that focuses on the minimum unit of two interacting activity systems.
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FIGURE 1
Interacting Activity Systems
Engeström, Engeström, and Vähääho (1999) argued that the creative potential of innovating
is closely related to the construction and redefinition of the object—a central element in activity
theory. Objects are “concerns; they are generators and foci of attention, motivation, effort, and
meaning. Through their activities, people constantly change and create new objects.” (Engeström,
2009, p. 304). It can be considered a moving target and cannot be reduced to short-term,
conscious goals—it is the ‘project under construction’. Therefore, objects are not just given or
arbitrarily constructed; rather, they “have histories and built-in affordances, they resist and bite
back” (Engeström & Blackler, 2005, p. 310) and give direction to the activity by determining
“the horizon of possible actions” (Engeström, et al., 2003, p. 152).
Of particular interest here is that the object of innovating leaves a trace of intermediate
artefacts that can help studying the process of innovating; it changes from initial objective
statements, to product visions, early sketches, technical models, 3D CAD models, prototypes, to
the launched product.
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Practice ruptures and disturbances might occur as a result of the inherent internal
inconsistencies of an activity system or inconsistencies between the elements of different
interacting activity systems. Activity theory predicts that these inconsistencies create tensions
that can form the driving force in the development of new collective capabilities (Engeström,
1987). Therefore, we reason that, through disturbances and ruptures induced by contradictions
between the different interacting activity systems, work practice innovation and an expanded
view of the object can occur as a result of the interorganizational collaboration (Engeström, 1987)
through which new collective competencies may be developed (Blackler, et al., 2003).
We will explain the building blocks of our model depicted in Figure 2 step-by-step.
FIGURE 2
Relations between Disturbances, the Expanding Object, and Work Practice Innovation
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2.1
Temporal Collaboration
The model depicted in Figure 2 describes the process of integrating work practices and of
integrating the fragmented object; two key elements in developing coordination forms of action
between the different organizational constituents. Although in we will describe the process of
developing shared work practices and integrating the fragmented object separately, in fact they
are constantly interacting. Over the course of a project, the process of integrating practices will
occur iteratively; therefore, the entire coordination process can be viewed as multiple integration
efforts over a project’s timeline.
Furthermore, due to the indeterministic nature of innovation, it is impossible to determine
upfront all the actors that should be brought together for developing a new product. Therefore,
the actors involved often change over time. This temporal nature of the networks is an essential
feature of inter-organisational innovating (Jones & Lichtenstein, 2008) and makes coordinating
even more difficult. As a result, the integration efforts are not gradually converging over time;
when new actors enter the network some of the integrations activities have to start all over again.
Therefore, van de Ven et al (1999) asserted the importance of taking into account the wider
networks of inter-organisational relationships in studying the lateral relationship(s) of interest. In
our example we will include the network of interorganizational relationships (including vertical
relationship) surrounding the lateral relationships.
2.2
From a Potpourri to Integrated Work Practices
When actors start engaging in inter-organisational innovation, their work practices are like a
potpourri—they are unlike each other, unorganised, and unaligned. The instruments, rules, and
division of labour—the elements of an activity system—of the various consortium partners are
heterogeneous as they have historically emerged in different communities and followed their own
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trajectory of changes over time. The participating organisations presumably all ‘know’ how to
innovate, but in their very own ways.
The inconsistencies between the activity systems may lead to disturbances between the
work practices of the various communities. People can no longer work ‘as they are used to’
because now they have to cooperate with people to whom what is ‘normal’ for themselves may
be incomprehensible.
Nelson and Winter (1982) argued that the ongoing enactment of behavioural routines are
known to be highly persistent over time. Orlikowski and Yates (1994), similarly, found that
people in newly formed groups are likely to base their actions on their past experiences and may
try to ‘import’ norms from communities they were previously part of. This finding is supported
by the more recent research by Levina and Orlikowski (2009). In their study of an interorganisational IT project they found that the diverse actors are confronted with novel and
ambiguous work situations that will lead to confusion regarding which genre to re-enact. Under
such ambiguous conditions actors will try re-enacting genres from other institutional contexts
they are familiar with in order to resolve the ambiguity.
Therefore, we expect that upon becoming a member in an inter-organisational network,
actors will start re-enacting the practices they were familiar with and this will lead to an
incoherent mix of practices. Weick and Roberts (1993) found that seemingly competent
practitioners were unable to reproduce their skilled performances in new circumstances. In interorganisational innovating, it may occur that practitioners become unable to enact their ‘knowing
to innovate’ in a skilled way.
Through the inconsistencies between work practices, underlying assumptions may be
disconfirmed and contradicted. Therefore, new meanings must be constructed (Louis, 1980).
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They have to overcome their sudden inability to enact their skilled performances; they need to do
new sensemaking and reflect on their capabilities and experiences (Vlaar, Van den Bosch, &
Volberda, 2006). However, as Blacker reasoned “in order to function as a system, different
organisational constituents require a means of interacting with each other sufficiently to produce
strategic action” (Blackler, 1993, p. 26). Therefore, for a consortium to collaboratively innovate,
the various parties need to develop forms of coordinated interacting to direct their behaviour
towards a shared goal. Hence, solely new sensemaking is insufficient. Actors may need to align,
integrate, or even innovate their work practices.
For effective inter-organisational cooperation, it is important to overcome the disturbances
and establish work practices that enable members to align the various aims and cooperate in
fragile, ill-defined interactions with unclear roles (Engeström, et al., 1999). Barnes (2001) stated
that shared practices are the accomplishment of skilful members of collectives. Since the
‘knowing how to innovate’ is viewed as inseparable from its practice—one cannot distinguish
between the two—a ‘simple transfer of practices’ is impossible.
Orlikowski and Yates (1994) identified two mechanism for changing communication
practices: through ‘inadvertent’ or ‘reflective agency’ change. The first refers to the accidental
improvisation through slippage; the latter refers to the deliberate improvisation. Reflective
agency can occur through trial-and-error experimentation, learning from others, or active
searching for alternative practices (Orlikowski & Yates, 1994).
In inter-organisational innovating, part of the work practice integration could result from a
trial-and-error approach, since the actors will try to resolve the disturbances through improvising.
On the other hand, the theory predicts that through active searching and learning from each other,
actors could also change work practices.
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2.3
Integrating the Fragmented Object
The cooperation between the two systems can be studied as object formation (Engeström, 1987;
Puonti, 2004). Initially, the object will be of fragmented nature; no single actor holds a complete,
integrative perception of the object (Puonti, 2004). Furthermore, the object is likely to be
different between the various activity systems at the start of the cooperation.
A prerequisite for effective cooperation is that actors construct (partly) shared objects—all
actors can have their own perspective, but their objects need to have some overlapping features
(Puonti, 2004). However, the dynamic nature of innovating makes it more difficult to construct
such a shared object. The integration of the various objects is not a tension-free activity.
There are different stages in creating a ‘shared object’. Firstly, all parties work towards
their own, distinct objects (see object 1 in Figure 1). Then, through interactions between the
systems, the parties can develop a collectively meaningful object. Eventually, a shared or
partially shared object may evolve (Engeström, et al., 1999).
We propose that focusing on the object provides a useful angle to study how actors
coordinate their innovation efforts. Particularly in product innovation, the object leaves multiple
traces in the form of physical artefacts that can be analyzed for form and content and serve as a
prompt during interviews to elicit further information about authorship and use.
Those actors that are more familiar with the object have more power to steer the development. As
Carlile pointed out: “not only do artifacts have the power to shape our lives in organizations, but
also that some actors in organizations often have more power in shaping outcomes than other.
However, by making the role of artifacts less taken-for-granted and understanding the relational
properties involved, all actors in organizations can potentially be more directed in the power that
they have, that is, what they can do, to shape events and outcomes” (Carlile, 2006, p. 117). The
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organization that is able to dictate the ‘standard’ in terms of representations and artefacts used has
the ability to continuously re-enact their power as they have the better understanding and,
therefore, have more negotiation power.
Often, numerous activity systems are involved in inter-organisational innovation. This
complex network can be seen to work towards a ‘runaway object’. “Runaway objects are
contested objects that generate opposition and controversy. They can also be powerfully
emancipatory objects that open up radically new possibilities of development and well-being.”
(Engeström, 2009, p. 305). Such a runaway object has a pervasive nature and its boundaries are
hard to draw. Thus, “the positions of the activity systems are ambiguous and they often seem to
be subsumed to the object rather than in control of it.” (Engeström, 2009, p. 307).
2.4
The Expanding Object and Work Practice Innovation
One of activity theory’s main premises is that work practice innovation may arise from
disturbances. Disturbances are not only seen as obstacles, they also have a positive potential. This
prediction resonates with research that showed that boundary interactions can hamper as well as
enhance innovating (Edmondson & Nembhard, 2009). As Wenger (2000) argued, at the
boundaries of communities of practice, competences and experiences differ and people are
exposed to new experiences and new forms of cooperatively constructed competence. This
divergence in experience and competence at the boundaries creates a generative tension that
resembles Vygotsky's (1978) zone of proximal development. A high divergence between
competencies and experiences may lead to no or little learning (Wenger, 2000). However, when
focused on a shared task or goal, the disturbances may result in work practice innovation, i.e. the
creation of new work practices (Blackler et al. (2003, p. 129). Blackler asserted: “As disturbances
become evident within and between activity systems, participants may begin to address
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underlying issues and to create new learning. As people change their situations they change their
activities and, simultaneously, they change themselves” (Blackler, et al., 2003, p. 129).
Disturbances, therefore, can be seen as a motor of change.
Additionally, after disturbances in an activity system occurred the object may be viewed in
a new way—redefined and expanded (Puonti, 2004). Through seeing how others view the object,
novel views can be incorporated in the activity system. Therefore, designers in one organisation
may benefit from being confronted with ways actors from other organization frame the object.
This process may lead to an expanded view of the object of innovation.
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METHOD
To illustrate our main arguments, we use insights derived from an ongoing case study of a
networked innovation project. We analysed an inter-organizational innovation project in the
Netherlands: the development of the Senseo Coffee maker. This project was selected because the
participating companies can be considered highly diverse. Therefore, this project has many
potential instances of inconsistencies and disturbances. Although this development project took
much more time than anticipated, the outcome can be considered highly successful: it exceeded
all expectations and grew to be a major new business unit of the two main contributing
companies.
For the present purpose, we draw on the first round of analysis of this ongoing case study.
We used secondary data and four interviews with different stakeholders from one of participating
organizations. An overview of the secondary data used is presented in Table 1.
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TABLE 1
Secondary Data Overview
Type
References
Case reconstruction
Hartman (2001): Professional publication
De Man (2006): Book Alliantiebesturingen
Walsh, Deschamps, Bourgeois, and Pahwa (2005):
International Institute for Management Development (IMD)
case
Journal publications
van Echtelt, Wynstra, and van Weele (2007)
De Man & Roijakkers (2008)
Newspaper interview article
Kleijwegt (2007): Interview of with former project leader from
Sara Lee
Websites
www.senseo.nl
www.de.nl
www.philips.nl
MarketingOnline ("Niet alle allianties leiden tot een Senseo,"
2007)
www.waacs.nl
www.bpo.nl
www.well.nl
First advertisement of the Senseo:
http://www.youtube.com/watch?v=3gJRKHHKNaU
Customizable Senseo: philips.com/senseo-flavor
We also interviewed four people who participated at different moments in the development
project. The interviewees held different positions in the parent organization, so as to represent the
both the divisional, managerial, and operational perspective. The interviewees were selected
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through snowball sampling (Small, 2009). Follow-up interview are planned but have not yet been
conducted at the time of writing this article.
The interviews focused on identifying people’s work practices and the contradictions
between them. We aimed to acquire an overview regarding how people overcame these
contradictions and developed coordinated means of interacting.
TABLE 2
Interview Data Overview
Interviewee’s function
Involved during
R&D manager
Early exploration; commercial introduction
Consumer Researcher
Concept development and consumer testing
Project leader
Mass production development
Business Unit manager
Commercial introduction
In our analysis, we aimed at identifying the elements of an activity system, i.e. the subjects,
objects, tools and techniques, rules, community, and the division of labour. The analysis
presented here is part of ongoing work. It serves as an illustration of the research model.
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CASE NARRATIVE
The development of the Senseo coffee maker started in 1996 and the product was introduced to
the market in 2001. In the 1990s the coffee market was increasingly becoming commoditized. In
1994 Philips, a major domestic appliance developer, explored a potential collaboration with
Nestlé’s Nespresso department. Together, two routes were explored: developing a premium cupby-cup coffee concept, and a simpler and cheaper Nespresso system. In early 1998, the
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discussions between Philips and Nespresso were terminated, as they were unable to identify a
lucrative business model for both.
At the same time, Sara Lee, the mother company of the major Dutch coffee brand Douwe
Egberts, experienced similar problems in the Dutch coffee market: margins on coffee were
declining and the adoption of coffee drinking youngsters was stagnating. In spring 1996, the CEO
of Sara Lee initiated a new department called ‘Innovation & Quality’. One of the first projects
was called “ideal cup of coffee” that soon become the ‘Coffee Solo’ project. The project aimed at
changing the consumer’s coffee making process by making it more ‘effortless’ and improving the
quality of coffee at home. For the product exterior design they hired Waacs, a Dutch design
agency who developed the first concept drawing at the end of 1996. Early 1997, the basic product
idea was translated into a technical concept. At that time, Sara Lee approached Philips as a
potential development partner. Since Philips was at that time still exploring coffee concepts with
Nestlé, this was bounced off. Therefore, Sara Lee decided to develop a coffee pad system
themselves. To resolve a number of major engineering problems, Sara Lee unsuccessfully
approached a number of potential partner firms at the end of 1997. They did, however, have a
distribution partner lined up: Inventum. In autumn 1997, Sara Lee hired Well Design—a major
player in the European design & development sector—that significantly contributed to the
technical development of the Senseo. Well Design delivered a prototype for testing purposes.
Other specialized companies entered the network, for instance BPO, a company specialized in
designing with plastics.
After a cycle of detailed engineering efforts, a manufacturer entered the consortium: the
Chinese company Electrical & Electronical. The consortium proceeded in developing and testing
models and prototypes. The project members from Sara Lee had to grand permission of their
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executive board regarding the large-scale investments needed for the further development of the
coffee pad system. Cor Boonstra, at that time both supervisory board member at Sara Lee and
CEO at Philips, was enthusiastic about the project. Philips entered the project after 1,5 year
elapsed development time. It was decided to let Sara Lee finish the development stage and let
Philips take on the industrialization part, i.e. further develop the product for mass production.
When Philips entered the consortium, they effectively took over Inventum’s role as product
distributor and Well Design’s role as the product engineers.
In 1999 it became apparent that several product components were still malfunctioning.
Philips therefore redesigned the entire electronic architecture. Along with Philips, new
organisations entered the consortium, for instance the German engineering firm Hoffmann &
Hoffmann.
After several delays, the product was launched in February 2001. Within two years after
product launch, 10% of Dutch households owned a Senseo; about six years after market
introduction, the Senseo had 75% market saturation and was successfully introduced in eleven
countries.
4.1
Temporal Collaboration
A selection of the organisations that contributed to the development of the Senseo coffee maker is
depicted in Figure 3. It aims to provide an overview of the parties that significantly contributed to
the innovation work. This overview is not exhaustive; in line with the view of the runaway object
it is not straightforward question which organisations should be considered to be part of the
network and where to draw the boundary. Possibly there are many more that contributed to the
development of Senseo.
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Only the relation between Sara Lee and Philips was perceived as lateral. However, most of
the ‘suppliers’ contributed extensively to the innovation work, thereby being more involved than
on a mere transaction basis.
FIGURE 3
Overview Inter-organisational Network
As became apparent from the case narrative, not all organisations participated at the same
time. Some companies were involved during the opportunity identification phase, some during
the early product conceptualization stage, whereas other organisations only participated during
the final commercialization stage.
The temporal nature of the networks is an essential feature of inter-organisational
designing (Jones & Lichtenstein, 2008). During different stages of the development process,
different actors with the appropriate expertise contributed to the development. Interfaces existed
between several companies and lacked between others. Given the open-ended nature of this
innovation project, no one could have foreseen which partners would ultimately be needed to
develop the product. As Van de Ven et al. (1999) argued, the relationships between organizations
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that cooperate in networks are interdependent and interrelated in a complex manner. Their
longitudinal study indicated that dyadic relationships in such networks often spill over and
thereby influence the other relationships in the network. This is clearly the case in the Senseo
narrative: especially when Philips entered the network, many other relationships were ended, e.g.
Inventum’s role of distributor and Well’s role of product engineers. Alongside with Philips,
several new organisations—relations of Philips—were brought into the network. Although at first
Sara Lee held a central role in coordinating the innovation task, this changed much when Philips
entered. No single organization held a dominant, central role anymore in which they were able to
direct the actions of all the other organizations.
The temporal membership and dispersed control in the inter-organisational network make
the coordination task even more difficult. This implies that a continuous coordination effort is
needed. Implications here are that although new organizations will bring new, valuable expertise,
also much vital information and knowledge will be lost as organizations leave the network (Van
de Ven, et al., 1999, p. 44). Whatever forms of coordinated action that were established with
partners in the network may not be valid for collaborating with new partners. Therefore, new
roles and relationship have to be established.
What is illustrated by the case is that not necessarily all companies interact with each other,
let alone sit at the same table, when developing the product. Therefore, certain participants are
more concerned with coordinating the designing. When it came to branding the product it was
decided to introduce the coffee maker under the Philips brand and the pads under Sara Lee’s
Douwe Egberts brand, despite the fact that Sara Lee had initiated the product innovation and had
been the main developer during the first 1.5 years. The former project leader of Sara Lee
mentioned that the Philips brand added more customer value since a coffee maker was a
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consumer electronics product compared to the Douwe Egberts brand (Kleijwegt, 2007). A cobranding strategy was adopted in which both main companies featured in the commercials and
other advertisement material and packaging. The other participating organisations were not
communicated as being part of the Senseo’s success. The former Sara Lee project manager
expressed his mixed feelings that Philips got all the credits even though during the majority of the
product development, it fell under his remit (Kleijwegt, 2007). Thus, the Senseo example
indicates that power, conflicts of interest, and coordination issues can be main obstacles.
Potentially, both Philips and Sara Lee, both being major multinational companies, were used to
‘dictate’ their suppliers and sub-contracted companies (such as design agencies) what to do when
defining the scope of their activities. It appears that cooperating between two companies that are
used to coordinate the activities of others can provide additional difficulties.
Studies into inter-organisational collaboration often overlook the difficulties organizational
members face managing the interface between one’s one and the other organization(s). A former
business manager explained how difficult it was to convince his boss why the project was
delayed again:
“I had so many discussion with my boss trying to explain why the project progressed so
slowly. The thing is, you simply have two separate decision-making moments, one in
Philips and one in Sara Lee.”
4.2
From a Potpourri to Integrated Work Practices
In the Senseo case, the participating companies formed a heterogeneous set. Sara Lee operates in
fast-moving consumer goods sector, with brands such as Prodent, Sanex, and Natrena, whereas
Philips operates in the durable electronic appliances sector. In fast-moving consumer goods
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sector, for instance, the time horizons of development projects are much shorter compared to
those in electronic appliance development projects. This is illustrated by the following quote:
“That is one of the major differences between fast-movers and durable product developers.
Why are those fast movers so decentralized? Because they have to take into account local
preferences and usages. The coffee drinking behaviour in France is different from
Germany. You can centralize your distribution but consumer insights must be investigated
locally. In durables, well, a vacuum cleaner is a vacuum cleaner. We of course check for
local difference but with some extra nozzles, it often works out fine. That was one of the
main differences in the two approaches. The Senseo concept is not directly implementable
in different counties.”
This quote indicates that the rules of the innovation game were different in the two sectors. As a
durable consumer good producer, Philips was unfamiliar with the approach to place local
differences at the core of the development project. The former business unit manager at Philips
explained that the differences between the organisations led to many misunderstandings that
hampered the collaboration:
“You don’t understand each other, you speak a different language. When you for instance
talk about positioning, you have to continue asking questions about what they mean with
positioning exactly. It is very plausible that you all leave the meeting with a very different
idea. You have to be able to give similar meaning to concepts.”
These different approaches not only led to many misunderstanding but also to many disturbances
of the work processes that both organizations were used to. The former business manager
explained that it not sufficient to simply explain your partners once how your innovation process
works. It is a continuous effort.
22
“Sara Lee was not used to work with that sort of milestones. Then you have to convince
them that such tests are really necessary. It takes so much energy to explain each other
what exactly are your processes, what are the conventions in managing a project. You look
from a very different perspective to such [innovation] processes. […] You constantly have
to explain what you are doing and what that means.”
An example on how different work practices led to disturbances in the collaboration and how this
led to changes in the activity system is explained by the former R&D manager:
“Our organisation is highly centralized whereas Sara Lee was highly decentralized.
During the product commercialization, that mostly focused on profit responsibilities. This
was in the different countries for Sara Lee, whereas in Philips this was my responsibility.
You saw that they changed this, starting with the Senseo, where my partner at Sara Lee
also got the profit responsibility. So, you could see that a tension existed because the
people had different responsibilities and authorizations.”
Having different responsibilities for the two R&D managers at Philips and Sara Lee did not work
out well. The interesting point here is that Sara Lee not only adjusted the allocation of
responsibilities for this particular project, but also for later product innovation projects. Besides
adopting certain ways of organising work, also specific skills may be learned. The former
customer researchers at Philips explained that Sara Lee had a perspective on customer research
and how this influenced Philips’ approach later on:
“The fast-moving industry is much more used to thinking from consumer insights and
concepts. I must admit that I learned that part from Sara Lee. I became so enthusiastic
about that. That was so nice about collaborating with Sara Lee, they were much more
knowledgeable than Philips regarding that part and, therefore, they took us by the hand.
23
Afterwards, we implemented that way of approaching projects ourselves in developing for
other product.”
For both Philips and Sara Lee it was one of their first experiences in collaboratively developing
new products. Philips developed products with other manufacturing companies, such as Alessi, in
the past but the Senseo was the first consumable–durable combination. For Philips this project
involved changing its business model. Rather than solely earning from the products, Sara Lee and
Philips decided to sell the Senseo coffee maker for a low price and share the coffee pad earnings.
This business model is common for disposable razors and printer cartridges, but was not a
common for Philips and Sara Lee.
The Senseo, now being on the market for over eight years, is still in development. Recently,
a customizable Senseo was launched. Customers can choose a print and colour through an online
service. This again, required a change in the organization; Philips now adopted a direct-selling
approach and had to change manufacturing facilities.
As was shown above, work practices in both Philips and Sara have changed as a result of
the collaborative effort in developing the Senseo coffee maker. Not only did they learn new skills
from each other, they had to innovate for instance their business model, profit making scheme,
and manufacturing setup.
4.3
Integrating the Fragmented Object
In the Senseo case, the expertise of the organisations in the consortium was of distributed nature.
Philips had expertise regarding the mass production of an electronic domestic appliance, Sara Lee
had the expertise in coffee and what constitutes a good cup of coffee, WAACS had the expertise
in the external design of products, and WeLL Design had expertise in the technical design of
components and parts. To develop the Senseo these diverse expertise bases had to be integrated
24
in a single design concept. Some development work was divided in separate modules. However,
some interfaces were so specialized that a modularized task division was impossible.
The objects of the various activity systems differed greatly. The various actors focused their
attention to different part of the Senseo. We followed the trace of intermediate artefacts that were
developed over time, which provide insights into the objects of the various activity systems. The
design moved from an initial project brief—a written document—to a number of potential design
concepts developed by the design consultancy agency WAACS. The selected concept drawing of
the first version of the Senseo is shown in Figure 4.
FIGURE 4
WAACS design concept drawing
Simultaneously, at the department Innovation & Quality at Sara Lee, engineers worked on
the technical components to optimize the coffee taste (Hartman, 2001). They developed and
tested several test versions in their laboratory; one of the models is shown in Figure 5.
This illustrates how dispersed the objects of WAACS and Sara Lee were: WAACS focused
on designing an exterior that would appeal to consumers, whereas the engineers of Sara Lee were
developing an effortless solution for making the perfect cup of coffee. As is apparent from Figure
4 and Figure 5, only the spout featured in both representations.
25
FIGURE 5
Sara Lee’s Test version
Over time, Sara Lee and WAACS developed a mock-up prototype of the product to better
communicate the product exterior, see Figure 6.
FIGURE 6
Mock-up product exterior
The engineering consultancy WeLL Design designed the parts in more detail, as can be
seen in Figure 7. Only the collaborative effort between Well, WAACS, and Sara Lee could have
resulted in the design depicted in Figure 7, since knowledge of all elements, such as the product
aesthetics, the user interface, the technical components, had to be embodied in the detailed
drawings of the different parts. The integration of the various objects of the different
organisations was not a tension-free activity. For instance, integrating the developed components
with the designed product exterior proved problematic. The project leader of Sara Lee explained
that he aimed to safeguard as much as possible of WAACS’s exterior design but this was a major
26
struggle (Hartman, 2001). Eventually, he managed to change only details such as the curve of the
top lid.
FIGURE 7
Exploded View Well design
The Senseo example illustrates that in inter-organisational collaboration the object is of
fragmented nature; no single actor at the beginning held a complete, integrative perception of the
object (Puonti, 2004).
The project leader from Sara Lee explained that difficulties arose from the differences
between the objects they and their partners had (Hartman, 2001). What Sara Lee and WeLL for
instance, called a prototype was for Philips merely a feasibility study. Philips expertise in
developing durable electronic consumer products resulted in a much more detailed perception
regarding what different steps in terms of prototyping and testing are needed to develop a high
quality product.
Through the interactions between the various activity systems, for instance during the early
stage development of the Senseo between Sara Lee, WAACS, and Well Design, the participants’
objects were expanded through interactions with the other participants. The market researcher
explained:
27
“Collaborating with people who work in adjacent fields…that sort of collaboration can
give you so much inspiration. Because you look from a very different perspective at the
same topic, you learn at lot…that can really give you a new angle for product
development.”
5
DISCUSSION
This paper presented the argument that the coordination of inter-organisational innovating can be
studied from the perspective of the shared object formation of the various organisational actors.
We emphasized the potential of activity theory for organisation research as an analytic means
consistent with practice approaches. Activity theory offers an expanded view of the processes
that mediate social structures and reproduce these structures (Blackler, 1993) that goes beyond
detailed studies of discourse and communication (S. L. Brown & Eisenhardt, 1995) as it
emphasizes the relations between actions, technologies, rules, and social structures.
Through the activity theoretical lens, a productive rather than a reproductive practice theory
was adopted (Østerlund & Carlile, 2005). Tracing the process of how disturbances emerge can
help to understand when these occur and how people may overcome them, which will provide
more practical implications.
The Senseo case was used to illustrate our conceptual model of inter-organisational
innovation. The case emphasized the temporal membership in these product innovation networks
and provided examples of disturbances between the divers work practices. The artefacts created
by different actors in the network illustrated the fragmented view of the object, work practice
innovation, and the expanding object.
28
5.1
Suggestions for Future Research
Coordination in inter-organisational innovation warrants further research to increase our
understanding on how actors can collaborate on this type of interrelated, dynamic, and ill-defined
tasks. To investigate how actors achieve work practice integration, a process theory explanation
is needed that addresses the sequence of events that eventually lead to integration. It requires the
researcher to ‘open the black box’ between input and output, focusing on the processes in
between (Van de Ven & Huber, 1995).
In order to provide insight into how actors can achieve this in situ, longitudinal research is
needed in which the actual work practices of people during such projects are studied (Huber &
Van de Ven, 1995). We emphasize the importance of taking into account the organisational
context (Swan & Scarbrough, 2005) and the mediating roles of artefacts and technology
(Engeström, 1987). To investigate how actor achieve for instance work practice integration, a
process theory explanation is needed addressing the mechanisms that lead to the sequence of
events that eventually lead to the integration (Van de Ven & Huber, 1995). Data should be
gathered to obtain a narrative on the unfolding nature of the sequence or pattern of events. It
requires researchers to ‘open the black box’ between input and output, focusing on the processes
in between (Van de Ven & Huber, 1995).
We propose to combine longitudinal case studies with retrospective case studies to
overcome some of the limitations of both (Leonard-Barton, 1995). Longitudinal cases providing a
unique opportunity to gain a detailed image of the patterns and how these patterns evolve over
time, whereas retrospective case studies allow pattern finding indicative of dynamic processes.
In order to investigate how change processes happen during inter-organisational designing,
it is important to adopt multiple data gathering and data analysis methods (Robson, 2002). In line
29
with our argument in this paper to take into account the cultural and historic context—following
activity theory assumptions—we propose to use both on ethnographic methods as well as conduct
interviews and gather and analyze company documents—such as representations of the design
and process reports originating from the various organisations.
6 ACKNOWLEDGEMENT
The authors gratefully acknowledge the support of the Research Programme ‘Integral Product
Creation and Realization’ (IOP IPCR) of the Netherlands Ministry of Economic Affairs, the
interviewees. We would also like to thank Maaike Kleinsmann, Katinka Bergema and all
interviewees for their collaboration on this project.
7
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