Co-innovation Dynamics E-Book

Romaric Servajean-Hilst

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 390

Veröffentlichungsjahr: 2019

Beschreibung

Over the last 30 years, the pace of innovation has exploded while available resources have become increasingly scarce. Open Innovation is the solution, with client–supplier relationships being the main expedient.

However, collaborating in innovation is full of obstacles, from uncertainties in innovation as a whole to difficulties with managing a business relationship.

Co-innovation Dynamics, based on a deep-dive ethnographic inquiry enlightened by state-of-the-art management research, presents the daily life story of a collaborative innovation project. Also, based on two other qualitative and quantitative studies on co-innovation management, this book offers lessons and tips on how to manage the dynamics of collaborative innovation in the client–supplier relationship.

Leseprobe

Table of Contents

Cover

Foreword

Acknowledgements

Introduction

1 Open Innovation, or Collaborative Innovation, Between Clients and Suppliers

1.1. Managing client–supplier interactions in Open Innovation

1.2. The dynamics of client–supplier cooperation in innovation

2 Conditions and Impacts of Client–Supplier Open Innovation Governance

2.1. A benchmark: the performance of the relationship

2.2. Governance of the relationship, elements, forms and influence on performance

2.3. The atmosphere of the relationship, elements, forms and influence on governance and performance

2.4. The innovation project and its influence on governance

2.5. Forms of governance to be favored according to the atmosphere of the relationship and the maturity of the innovation project

3 The Dynamics of Client–supplier Innovation Interactions – History and Analysis of a Collaboration

3.1. The context of the collaboration

3.2. History of a client–supplier innovation collaboration

3.3. Feedback on the collaboration – the contribution of the relational approach to the “life cycle” and “teleological” approaches to the dynamics of inter-firm cooperation

Conclusion

References

Index

End User License Agreement

List of Illustrations

Introduction

Figure I.1. The three methods of this research itinerary on client–supplier Open...

Chapter 1

Figure 1.1. Interactions within the client–supplier relationship

Figure 1.2. Integration of strategic and operational activities in the client–su...

Figure 1.3. Atmosphere and environment in the IMP group’s interaction model

Figure 1.4. Life cycle approach to the inter-firm relationship

Figure 1.5. Teleological evolution of the inter-firm relationship

Chapter 2

Figure 2.1. Summary description of the sample of the quantitative approach

Figure 2.2. Distribution of performance components

Figure 2.3. Influences of contractual arrangements on the performance of the rel...

Figure 2.4. Influences of management mechanisms on the performance of the relati...

Figure 2.5. Dependencies and interdependencies between client and supplier

Figure 2.6. Four atmospheres of the client–supplier Open Innovation relationship

Figure 2.7. Distribution of forms of governance according to the atmospheres of ...

Figure 2.8. Distribution of forms of governance according to the maturity of the...

Figure 2.9. Which governance should be favored for client–supplier Open Innovati...

Chapter 3

Figure 3.1. Simplified organigram of DELCAR. For a color version of this figure,...

Figure 3.2. The five phases of the process of managing innovation projects at DE...

Figure 3.3. Simplified organigram of MixMat

Figure 3.4. Relationship atmosphere during the discovery stage

Figure 3.5. Human Resources involved during the discovery stage

Figure 3.6. Interactions observed between the client–supplier partnership. For a...

Figure 3.7. Data collected for this ethnographically based approach

Figure 3.8. Atmosphere of the relationship during the first exchanges

Figure 3.9. Human resources involved in the first exchanges

Figure 3.10. Atmosphere of the relationship during the collaboration exploration...

Figure 3.11. Human resources involved in the collaboration exploration phase

Figure 3.12. Human resources involved during the suspension phase

Figure 3.13. Atmosphere of the relationship during the negotiation phase

Figure 3.14. Human resources involved during the negotiation phase

Figure 3.15. Atmosphere of the relationship during the collaboration launch phas...

Figure 3.16. Human resources involved during the collaboration launch phase

Figure 3.17. Human resources involved in the “delay” crisis

Figure 3.18. Proof of progress example 1. For a color version of this figure, se...

Figure 3.19. Proof of progress example 2. For a color version of this figure, se...

Figure 3.20. Atmosphere of the relationship during the final development episode

Figure 3.21. Human Resources involved during the final development episode

Figure 3.22. Atmosphere of the relationship during the delivery episode

Figure 3.23. Evolution of the collaboration. For a color version of this figure,...

Figure 3.24. Trajectories of the client–supplier Open Innovation relationship. F...

Conclusion

Figure C.1. A conceptual model of vertical Open Innovation collaboration

Guide

Cover

Table of Contents

Begin Reading

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Smart Innovation Set

coordinated byDimitri Uzunidis

Volume 20

Co-innovation Dynamics

The Management of Client–Supplier Interactions for Open Innovation

Romaric Servajean-Hilst

First published 2019 in Great Britain and the United States by ISTE Ltd and John Wiley & Sons, Inc.

Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licenses issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned address:

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John Wiley & Sons, Inc.

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© ISTE Ltd 2019

The rights of Romaric Servajean-Hilst to be identified as the author of this work have been asserted by him in accordance with the Copyright, Designs and Patents Act 1988.

Library of Congress Control Number: 2019931459

British Library Cataloguing-in-Publication Data

A CIP record for this book is available from the British Library

ISBN 978-1-78630-331-8

Foreword

Henry Chesbrough coined the term Open Innovation in 2003, and since then practitioners and academics alike have embraced the concept. He defined Open Innovation as “the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively” [CHE 03]. This definition was inspired by his experience in large companies such as Xerox, IBM, and P&G. Open Innovation has later on been applied to firms in service industries, small companies and start-ups, governments, non-profit organizations, etc. Furthermore, Open Innovation has not only been studied at the firm level: new insights about its management have been developed by taking R&D projects, Open Innovation managers, single relationships with partners, and events such as innovation contests, as units of observations. Similarly, we get an enriched understanding of Open Innovation from new studies that examine the concept at the level of interorganizational networks or ecosystems, and by the integration of Open Innovation into the regional innovation systems framework. Consequently, Open Innovation is gradually moving to the center of innovation management research. However, this does not mean that there are no white spaces in this field: there are many, and managing collaborative innovation between suppliers and clients is one topic that hasn’t been analyzed in detail.

In this book, Romaric Servajean-Hilst focuses on the benefits and management challenges when suppliers and clients participate in joint innovation projects. It is a fascinating book that goes into great details as to how to manage such joint initiatives. Suppliers and clients face great difficulties when it comes to managing innovation. They seek to understand the right levers for action and there are many difficulties, because collaborative innovation between client and supplier is prone to a number of specific challenges that are not present when a company is working, for instance with technology partners such as universities or university labs.

Let me explain this in more detail. In any innovation project, there is uncertainty. This uncertainty increases when the resources and results are shared, as is the case when clients and suppliers collaborate. Years ago, I was invited by a leading FMCG (Fast Moving Customer Goods) company to have a look at the management of the company’s joint innovation with its main strategic suppliers. The arrangements and contracts with its suppliers were longwinded, reflecting the complexity of the relationship when a major client is innovating with strategic suppliers. The relationship is complex because on the one hand, suppliers and clients have standard contractual arrangements determining the prices and quality criteria for components and raw materials that they already trade. These negotiations between suppliers and clients can be tough because it is a zero-sum game. On the other hand, they start collaborative innovation where the logic is completely different: by relying on each other’s strengths and assets, they can create highly novel products. This is essentially a positive sum game and the joint value creation is a function of their openness and teamwork in the innovation process. Yet, at the same time, they have to divide the benefits of the collaboration in a way that does not jeopardize the good teamwork, which guarantees the results of the value creation process. So, they have to finesse an optimum level of competition and collaboration – competition for maximum value capturing and collaboration for superior value creation [ADN 17, HAN 18, KAP 13]. This tension is not apparent in Open Innovation deals with universities or research laboratories that usually operate as a research contractor or license the technology: there is no further collaboration in the product(ion) space as in the case when suppliers and clients co-innovate. The relationship is also more complex than in the case of collaboration with competitors because competitors can make orderly agreements about the way they will commercialize the technology once they finish the joint innovation. Similarly, collaboration with companies from other industries is fairly easy to handle because partners each have their own industry and further interfering in their product markets is almost by definition excluded.

So, what are some difficulties you can expect when suppliers and client companies are innovating together? First, both parties will have to agree about Intellectual Property Rights. Deals regarding Intellectual Property are possible as the supplier may be more interested in the purely scientific or technological Intellectual Property, while the client firm will have stronger appetite for Intellectual Property that relates to the application of that technology. Second, there should be a clear understanding of the limitations of a possible solution: the client firm will usually come up with a cost-restriction for the innovation – for instance a laundry detergent cannot increase more than 5 cents per kg. Third, risk management should be dealt with appropriately: the risk balance is asymmetric, as the supplier has to do most of the initial R&D investments. If the client firm finally decides not to commercialize the innovative product, then it has to foresee this possibility in a contract with the supplier and compensate the latter in one way or another. Lastly, there is genuine tension between both firms because the client firm wants to have broad exclusivity with respect to the innovative product while the supplier has a strong drive to limit this exclusivity and sell the component to the client’s competitors.

This example is just an illustration to underline how important it is to understand the complex relationship between suppliers and client firms when they co-innovate. It is a topic that has, in error, often been left aside by Open Innovation scholars. Co-innovation Dynamics, written by Romaric Servajean-Hilst, is thus more than welcome and is important to better understand how co-innovation in client-supplier relationships can be managed properly. Here are a few takeaways from the book: first, co-innovation in client-supplier relationships requires a dynamic approach in which the relationship evolves, from its beginning, through a continuous cycle of achievements, evaluations and adjustments. Second, there are four main management methods adopted by client-suppliers that engage with joint innovation projects. Finally, there is a major role for the purchasing department in managing this relationship.

Enjoy the reading!

Prof. Dr. Wim VANHAVERBEKE

Professor of Strategy & Innovation Management at Hasselt University

Visiting Professor at ESADE Business School

Visiting Professor at the National University of Singapore

Acknowledgements

This book presents the results of PhD work conducted in the Management Research Center of Ecole polytechnique, France, under the direction of Prof. Sihem Ben Mahmoud Jouini.

It received the support of Ecole polytechnique foundation, of DELCAR and of innov’&.

Special thanks go to Hubert and Maud without whom this book would not have been what it is today.

Introduction

In 2007, Asseat, a firm pertaining to the automotive sector, approached the Captor firm in order to apply one of its sensors to the automotive world. In order to determine which of the sensors would be suitable, and according to which specifications, tests were carried out over a period of 2 years on the basis of prototypes that were provided by Captor. Once the sensor was identified, a contract was signed. It stated that each party would cover its development costs, each party would keep the intellectual property with in its main field of activity, and in the event of success, Asseat would entrust Captor with the product supply that was developed for the first series. Two years later, many technical difficulties were solved and the product was finalized. Another two years later, Captor supplied Asseat with the developed product set, and a new production line was opened on the other side of the world.

Certifname, a start-up created in 2007, developed a system for verifying the digital identity of Internet users. In mid-2009, Numtel contacted it in order to develop a collaborative certification project that combined virtual identity and real identity. Nine months later, discussions began on the cooperation agreement that would be signed in the first quarter of 2011, when the first version of the experimental platform was already completed. Technical problems then began to arise. Six months later, Numtel terminated the cooperation. One month after that, Numtel launched a product with the same functionalities as the one covered by the cooperation agreement, including some common technological elements. Certifname then sued Numtel for the infringement of intellectual property rights and unlawful exclusion. According to Numtel, which defended itself against such accusations, the product technologies were different.

Ingrecolor is a reference firm in the world of pigments. In 2009, it proposed to its client, Cosmect, the development of a new pigment of a with new functions for cosmect’s transparent packaging. A contract was signed: Cosmect’s committed to purchasing this new pigment from Ingrecolor in exchange for a exclusivity on the cosmetics market. A few months later, the project came to an end, the pigment being successfully developed. Unfortunately, the technical–commercial equation was not solved, and as agreed, the cooperation ended. Ingrecolor then wished to offer its new pigment to other clients in other sectors, but was not able to do so: Cosmect had unilaterally filed a patent covering all the applications targeted by Ingrecolor. Ingrecolor continued to supply Cosmect with its products, but no longer gave it priority access to its innovations.

In 1997, the car manufacturer Simplauto selected its supplier Simplfour to jointly develop a new opening system. This was a very ambitious system for both companies. Unlike the other contracts between Simplauto and Simplfour, an agreement of just a few pages was signed: it was brief and the respective responsibilities were not defined. Simplauto contributed to Simplfour’s study costs. Intellectual property rights were distributed as the project progressed. At the end of 2000, the first vehicle was launched. Quality problems were jointly solved and Simplfour supplied the first-series vehicles. Later, the application of the system would be developed with another Simplauto supplier on a second platform. Since then, this system has been increasingly applied in Simplauto’s ranges, with several different suppliers. Simplfour, for its part, has expanded its product range by offering a generic and modular version of the system to other manufacturers.

These four real-life stories reflect a fraction of the variety and complexity of the issues encountered in Open Innovation between a client and a supplier.

Regardless of their position, whether they act as a supplier or a client, companies always face great difficulties when it comes to managing innovation cooperation with a client/supplier. All seek to identify and understand the right levers for action, as well as the contexts in which to use them to make them effective. There are many difficulties, because collaborative innovation between the client and the supplier combines both issues related to inter-firm cooperation and innovation [TAK 01].

In any innovation project, there is a portion of uncertainty. This uncertainty is all the greater when the specified degree of innovation is high. It concerns both the results and the means used to achieve them. This uncertainty is increased when these resources and results are shared, as is the case when clients and suppliers collaborate. It then affects both the client and the supplier.

It may be difficult, if not impossible, to predict what will be discovered and implemented, what will be implemented during and after the innovation project, as well as all the impacts and potential benefits of such a collaboration. The transactional approach to the business relationship that would result from a cost–benefit calculation [WIL 93] is not conceivable. It is not possible to assess the cost or benefit of the transaction project upstream, or the transaction cost levels that would directly lead to its abandonment.

This uncertainty leads to an ontological incompleteness of the contracts formed between clients and suppliers when innovation is concerned. In this case, to the great displeasure of lawyers, it is only rarely possible to specify all the actions and results expected by the parties, as well as the means of measuring them. The contractual arrangements also need to be tailored in comparison with “traditional” contracts [GAR 94, MID 96, p. 21].

Other strategies are therefore deployed in order to manage Open Innovation between clients and suppliers. A relational approach will consist of increasing the number of information exchange mechanisms between companies, on technical, commercial and organizational issues. The presence of “resident engineers” on the project platforms is an example of this [LAK 06a, MID 98].

These exchanges allow each party to seek and assess information on the competency and credibility of the other in the face of the challenges put forward by innovation, and to propel themselves into the future. They help to reduce the level of risk perceived by everyone and promote trust between them and between their staff. A consistent level of trust allows a welcoming degree of stability for the success of a relationship, within a context that is inherently unstable; that of innovation.

However, internally, there are still difficulties in accommodating the logic and interactions related to innovation with those related to trade in goods and services that are traditionally dissociated in companies [MID 97] and often poorly integrated [NPV 14]. This results in the establishment of separate governance arrangements. First, the entities dedicated to the client–supplier relationship (the logic of exchanging goods and services, purchasing and selling) are separated from the entities dedicated to the innovation relationship (innovation projects). Second, the relationship management mechanisms are differentiated because they use different standards and assessment methods, in addition to not being engaged in the same time frame.

Successfully managing client–supplier Open Innovation therefore requires the ability to orchestrate the client’s internal organization, the supplier’s internal organization and the terms of the relationship [MID 07, SÄF 14, TAK 01]. It also requires not considering the innovation project as an “island”, but as part of a context and dynamic that goes beyond its own limits [ENG 03]1.

This is the focus of our research, the objective of which is to understand how the client–supplier Open Innovation performance is built over time, and the results [SER 15] of which are presented in this book.

In order to meet this objective, we followed a research itinerary by constantly discussing theory and practice [DUM 13]. For four years, we have assembled three major research approaches, both qualitative and quantitative, all while maintaining the same unit of analysis: the client–supplier couple cooperating on an innovation project (Figure I.1).

We have sought to multiply and compare points of view in order to draw intelligible representations. Empirical observations guided the use of appropriate theoretical frameworks [GLA 09], as much as they guided our observations.

First, we defined a conceptual model based on interviews with all kinds of stakeholders in client–supplier Open Innovation partnerships, and on the academic literature. Then, we conducted a quantitative study from the perspective of 160 supplier firms that had at least one innovation project in cooperation with one of their clients. Simultaneously, we conducted a qualitative study in immersion for two years in the life of a client firm – so as to live and follow an innovation project with a supplier.

Figure I.1.The three methods of this research itinerary on client–supplier Open Innovation

This book retraces the results of this research trajectory. In Chapter 1, we present what the academic literature proposes in terms of managing client–supplier Open Innovation and understanding the different sides of its dynamics.

In Chapter 2, we present the combined result of our first two research approaches: the composition, conditions and impacts of the governance of client–supplier Open Innovation, and their links with performance.

Chapter 3 is devoted to a qualitative and longitudinal approach to the dynamics of Open Innovation. With the same interpretation framework of the previous chapter, the 20 months of a client–supplier relationship around an innovation project are reported and then analyzed.

Finally, we conclude this book by presenting the conceptual model of interaction dynamics of client–supplier Open Innovation, the central result of our research, and discuss its contributions. We then highlight the different lessons to be learned from this work for better practice of collaborative innovation between the client and the supplier.

1

The title of Engwall’s article [ENG 2003] “No project is an island: linking projects to history and context” was inspired by a 16th-Century poem by John Donne, “No man is an island entire of itself; every man is a piece of the continent; a part of the main”, but maybe also by the article “No business is an island: The network concept of business strategy” by [HÅK 89].

1Open Innovation, or Collaborative Innovation, Between Clients and Suppliers

At the foundation of Open Innovation, a term forged by academia, is the principle that in a world where knowledge is very widely distributed, one firm alone cannot control it all.

The dominant model of technological innovation practice throughout the 20th Century was that of the R&D laboratory that was vertically integrated into the commercial structure [LEM 06, WES 14]. Innovation was “closed”. It was developed from A to Z within the limits of the same firm.

During the second half of the century, innovation gradually opened up; firstly in the client–supplier relationship.

From the 1970s onwards, outsourcing became an increasingly important strategy for companies. The complexity of products increased with the multiplication of subcontracted components. Suppliers played an increasingly important role in new product development projects.

The academic world then began to focus on the subject by studying R&D alliances and technological partnerships1 as well as the development of new products. The latter initially focused on the automotive sector. Moreover, from the very first published works [IMA 85, TAK 86]2, it was revealed that the early involvement of suppliers in development projects was one of the keys to the performance of Japanese industry [JOH 09, p. 188]. Among car manufacturers, their involvement thus represents 30% of the total engineering effort, while it represents 16% in Europe and 7% in the USA [CLA 91].

During the 1990s, research extended to sectors other than the automotive sector [EIS 95]. Client–supplier interactions were increasingly recognized as a source of innovation [MID 93, FSS 00]. The question of when to integrate the supplier into the innovation process began to be raised, in addition to how to organize this integration [BID 98, KES 98, MID 97].

However, from the beginning of the 21st Century, studies on the link between supplier involvement in innovation and its performance have yielded contradictory results: they are not necessarily positive, particularly for projects with high technological uncertainty [HOE 05, MEL 14]; the benefits and risks associated with this involvement have been identified [HAN 99].

Research therefore focuses more on the need to adapt the relationship and emphasizes the need to manage both internal and external interfaces [CAL 00, LAK 01, TAK 01, VAN 08]. During the first decade of this century, interest in integrating suppliers into the development of new products has continued to grow, both for researchers and practitioners [SCH 10]. This is also the case for all forms of innovation that go beyond the firm’s limits.

Open Innovation, as opposed to the closed innovation of yesteryear, is a term coined by Henry Chesbrough in his 2003 bestselling book “Open Innovation: The New Imperative for Creating and Profiting from Technology” [CHE 03].

In a context where innovation is intensifying, opportunities for collaboration are expanding and available resources are becoming scarce, companies no longer have any choice but to open up to external players in order to innovate. They do this through Open Innovation.

Open Innovation thus groups together the practices that organize and implement innovation activities involving both internal and external parties in a firm. Although it is not a new idea, its development at such a level and its institutionalization is.

The use of the term Open Innovation highlights the intensification, variety and breadth of cooperation opportunities. Academic research on the subject focuses on the study of knowledge flows between organizations (their identification, combination and exploitation) for innovation purposes and related economic models.

Open Innovation between a client and a supplier therefore takes from both the world of Open Innovation and the world of early involvement of suppliers in development projects. These two lines of research are now drawing closer together; this book is a vector of that research.

With that in mind, in this chapter we will present what the academic literature teaches us about the modalities of interactions between clients and suppliers in Open Innovation by following the different episodes of involvement regarding a partner in an innovation project. We will then propose a reviewal of different ways of theoretically understanding the dynamics of inter-firm cooperation within this context.

1.1. Managing client–supplier interactions in Open Innovation

These interactions take place not only through the exchange of money for products and services, as is the basis of client–supplier relationships, but also exchanges of information and knowledge, as well as social exchanges [HÅK 82]3.

Many players interact in client–supplier innovation cooperation. These interactions occur through successive episodes of exchanges within each firm, between individuals, between functions, and between each firm, between their members, on an individual basis or representing their function.

Figure 1.1.Interactions within the client–supplier relationship

(adapted from [HÅK 82])

It is these interactions that bring to life, build or destroy the relationship between a client and a supplier surrounding an innovation project, in which they are jointly involved. In the following, we describe the major episodes that take place across the lifetime of such a relationship and what they involve in terms of management.

1.1.1. Sourcing Open Innovation selecting a partner and choosing the time of their involvement

The selection of an appropriate innovation partner is one of the managerial skills that the client must develop in order to ensure the success of innovation client–supplier relationships [CHE 11, p. 223, LED 11, PET 05]. This episode of research and innovation partner selection, or the external knowledge sourcing episode, is the one that receives the most attention from researchers [WES 14].

Operationally, sourcing involves answering two intertwined questions: when should one involve a supplier in an innovation project? And which supplier should be involved?

1.1.1.1. When should a supplier get involved in an innovation project?

The issue of involving a supplier in an Open Innovation project is trying not to involve it “ahead of time”. It is a question of knowing when the “right time” is [BEN 04, p. 177]. The timing, also related to the choice of supplier, is considered a crucial step in the success of a development project involving a supplier [DEK 08].

The timing of supplier involvement varies according to the uncertainty and complexity of the project, the role to be played by the supplier, and the capacity of potential suppliers available to cooperate on the project [HAN 99, LED 10]. It can be involved at all stages of the innovation project, from the generation of new ideas to production. In addition, the sooner a supplier is involved, the more it will be able to contribute its viewpoint on how to create the project.

In the case of projects with many significant uncertainties and a lack of internal resources to resolve these uncertainties, one solution for the client firm is to work with several potential suppliers (two or three at the most) in a preliminary phase, before choosing the supplier that will be involved [MID 00, p. 11].

Another solution is for the supplier(s) to be consulted in the very early stages of the innovation project, in order to provide expertise on the design and manufacturing methods of the part that could concern it/them [LED 10]. The supplier then acts as a “silent designer”4 who comes to participate in the innovation project without being integrated into it; the supplier sheds light on the choices of the client’s innovation team.

Its importance is not only based on the selection itself, but also on the selection process, which is an opportunity for inter- and intra-firm exchanges.

1.1.1.2. Which supplier should be involved in the project?

As a prerequisite, in order to be able to select an external partner, it is necessary to be able to recognize knowledge a capacity for external innovation [COH 90]5. It is then necessary to be able to recognize how this base of external knowledge (of technologies, markets, etc.), this external innovation capacity, is complementary to the knowledge base of one’s own organization.

Many companies have learned this at their own expense when they have sought to apply Open Innovation to the letter, and radically so – forgetting that Open Innovation is not the opposite of closed innovation, but its counterpart. These companies have decided to completely outsource their innovation. They have closed their internal department that was dedicated to innovation. Due to the lack of staff able to correctly identify and qualify external sources of new knowledge, they have no longer been able to generate effective collaborative innovation projects, and in the end, they have lost all innovation capacity.

In addition, the synergy between a client and a supplier for an innovation project is an important determining factor for the future success of the project. It can be summarized into three alignments that can be searched and/or generated:

1) technological alignment. The supplier’s ability to respond to client issues, the synergy of their knowledge of markets and technical resources, and the accuracy of their bases of knowledge [EMD 06];

2) strategic alignment. The congruency of their motivations, objectives and strategic visions which are, for example, materialized by the strategic roadmaps of the client and the supplier [HAN 99]. It is also based on the relative position of each firm facing the other [SCH 06], as exemplified by the proposition in the supplier portfolio theory

6

[KRA 83];

3) relational alignment. The compatibility of their culture and their propensity to adapt to each other’s processes and changes. It also corresponds to the client’s ability to be attractive to the supplier, which particularly implies being able to establish a relationship of trust [ELI 12, SCH 06, SCH 12].

These alignments act according to the stage of progress of the innovation project. In addition to ranking potential suppliers, the selection criteria that validate the alignment must be adapted to the timing when the supplier is integrated.

The more the supplier is integrated in the early phases of the project, the more the supplier’s selection process moves away from the one used in a client–supplier relationship, such as the traditional call for a new product that has already been technically defined [MID 97]. However, the potential supplier’s level of expertise influences the timing of its involvement, as its ability to contribute should complement the level of internal knowledge (or knowledge in the already mobilized ecosystem) of the innovation project [HAN 99]. Thus, the more the project requires the input of the supplier to its knowledge base, the later it will be integrated, and vice versa [HAN 99, p. 77]. The greater the supplier’s technological capacity, the less it will be challenged on it.

Before innovation projects, when the level of knowledge is still low and the design is not fixed, i.e. during the time of exploration and/or open creativity, the selection of a supplier is primarily made on the basis of a verification that integrates the experiences of previous collaborations [CRO 01] and strategic choices defined over the long term [DUS 95a, p. 147].

The earlier the integration takes place, the more necessary it is to assess the potential alignment of the two companies’ strategies for the innovation project, in addition to the supplier’s technical capacity.

Conversely, in the production phases – during the integration of suppliers once the innovation has been launched on the market, is in production or is close to being launched – the criteria for assessing suppliers are based on “traditional” criteria, i.e. the traditional quality–cost–delivery criteria [CAL 13, p. 33].

In the intermediate phase, the selection of suppliers is based more on potential and global professional competency, and then on global functional objectives [MID 97].

Relational alignment is important in the selection of suppliers because, in situations of uncertainty, the supplier’s cooperation capacities can complement its technical capacities [MEL 13]. It is one of the factors that contribute to the success of the collaboration [HÅK 93]. This is particularly the case in client–supplier relationships that are already active, where familiarity and trust from past interactions help to limit relationship risks by serving as social control mechanisms [DEK 04, DEK 08, GUL 95, GUL 98].

Nevertheless, the academic literature does not agree on the impact of relational alignment with regard to how companies should select their suppliers: while some stress the importance of previous collaborations (ibid.), others suggest that they should be sought outside the existing network in order to renew innovation potential [BEN 18, MEL 13].

Although the criteria for the technical/technological assessment of the supplier have been widely studied7, this is not the case for strategic and relational assessment [LED 11] – this requires the client to rely on an internal capacity in order to assess their own “soft skills”, to identify their future needs and to formalize their own strategy before they can assess the alignment of the supplier [BID 99]. For the latter, a necessary first step must be strategically and operationally prepared before choosing a supplier [BID 99, p. 103].

Lastly, the selection process is in itself a learning process between a client and a supplier, due to the interactions that precede the integration decision [DEK 08].

This learning process first involves the assessment and constitution of the three alignments described above – it can lead to the formation of an integration mode that is specific to the client–supplier relationship of the targeted innovation project. It can also induce common learning about the technologies/products/processes of both companies [DEK 08].

The contribution of the project teams on the client and supplier sides (same potential) from this Open Innovation sourcing phase contributes to the construction of the object at the center of the cooperation, the specifications thus play the role of a mediating object between the collaborators [LED 14].

1.1.2. Configuring the relationship for the innovation project

A key phase between the sourcing of a supplier for an Open Innovation project and its official involvement, the relationship configuration phase of the innovation project is the subject of most studies regarding the governance of supplier involvement in innovation projects [DEK 08, SÄF 14].

According to the authors of such studies, the main activities that make a collaboration successful are those that take place during this configuration phase of the relationship [DOZ 96]. The aim is to build the initial conditions for cooperation on the project, both in terms of contractual framework and inter-firm coordination conditions.

1.1.2.1. Which contract should be established?

The existence and content of a contractual framework to carry out an Open Innovation project offers the possibility of strengthening (or weakening) the innovation potential that was imagined during the sourcing phase. Indeed, it makes it possible to specify the incentives on intellectual property – the potential financial and/or industrial exchanges for both the supplier and the client. In addition, the protection provided to everyone by the laws that apply to collaboration also influences their potential for openness and transparency.

To do this, the different forms of contractualization extend over a continuum that ranges from a transactional type of contract (engineering or subcontracting purchase model) to a “partnership” type of contract. In the first case, the objective of the contract is to be accurately performed or, in the event of failure, to serve as a basis for a dispute settlement [MID 96, p. 21]. In the second case, the subject matter of the contract includes the possibility of contingencies or changes after the initial agreement is signed; the contractual clauses encourage the parties to “escalate” the detection of problems as soon as possible (ibid.) and leave room for the creation of new common opportunities.

After defining the purpose of the cooperation, the second most important contractual element is the definition of the level of responsibility given to the supplier in an innovation project or its degree of autonomy. The latter feeds most of the typologies on the subject [LED 14]. The part that is carried out by the supplier can be divided into six levels of responsibility [HAN 99, MON 00, SER 17]:

1)

catalogue purchase:

the client acquires a product or service previously designed by the supplier who produces it; the client does not participate in the design or production;

2)

pure outsourcing:

the client is in charge of the entire design of the targeted innovation and the supplier is responsible for its implementation; it can have a certain flexibility on the choice of the production process;

3)

white box:

the supplier is consulted to give its opinion on the design choices made by the client who designs the innovation. It is responsible for the implementation of the targeted innovation;

4)

gray box

: the design of the product delegated to the supplier is jointly carried out between the client and the supplier; the supplier participates significantly in the design and production of part of the targeted innovation;

5)

black box

: specifications (often functional) are provided by the client; and the supplier provides expertise in order to clarify needs and then ensure the design, industrialization and production of an entire part of the innovation or the complete innovation;

6)

open box:

responsibilities are largely defined according to each other’s areas of expertise; clients and suppliers are unable to define

ex ante

the objectives to be achieved, or even always the means to be used for the design and industrialization of innovation.

The adoption of one level of responsibility or another depends on the technological resources of the client and the supplier, with regard to the problems to be solved in the innovation project [BID 98]. The less the client masters the technologies necessary for the targeted innovation, and the more the supplier masters them, the bleaker the setup will be: the client must rely on the expertise provided by the supplier in order to carry out their innovation8. A good knowledge of the level of responsibility left to the supplier, in terms of development, is a prerequisite for defining an appropriate management method for the relationship [BEN 04].

A third key element of the form of contractualization adopted is the distribution of the fruits of collaboration on the innovation project. The study on alliances and vertical relationships focuses on the issues of “pie sharing” and its equity [JAP 01].

Research on Open Innovation is generally less common on the subject – it holds little interest in contractual commitments that exploit the results of the innovation project. Instead, it is interested in the economic model of the Open Innovation project. It is considered that the economic model of the Open Innovation project must be in line with the economic model of each party [CHE 03, WES 14]. When it comes to contractual arrangements, this translates into a focus on intellectual property rights [LAW 11].

However, in research on the involvement of suppliers in their client’s innovation projects, there is a bigger focus on the incentives put in place to reward the supplier’s efforts. These incentives must ensure the cooperation of the supplier, while limiting both the client’s innovation expenses and the risk of “lock-in” to the integrated supplier.

In addition, incentives through contractualization can range from direct remuneration for the supplier’s efforts (transactional purchase and sale contract) to the promise of future gains (usually under conditions), in order to cover the investment made during the innovation phase [MAN 09, p. 128].

1.1.2.2. How is inter-firm coordination organized?

Good supplier relationship management is considered as a supplementary source of performance for the client firm [HÅK 06, LED 11]. It is reasonable to assume that the opposite is also true.

As part of the integration of a supplier into an innovation project, the management of inter-firm coordination begins with a phase of choosing the relationship management method for the project. It is then followed by its operational management as part of the project management [NPV 08].

The choice of the relationship management method consists of defining rules and methods that will allow a good coordination of exchanges between the client and the supplier on the Open Innovation project.

This choice is all the more important as the project is innovative. Indeed, when it proves impossible to define ex ante the objectives to be achieved, or sometimes even the means of implementation, “the relationship is committed to the agreement of a general target that is necessarily inaccurate: on this basis, it establishes strong mutual dependencies, a common destiny; it then asks that everyone does not focus on the detailed respect of an initial exhaustive contract, but to jointly accomplish a task that incorporates internal hazards and external disruptions” [MID 93, p. 178].

This choice is made according to the level of responsibility, the level of uncertainty of the project (in relation to the technical difficulties to be solved and its maturity) and the agreement, sometimes negotiated, between the client and the supplier of the project. This involves setting up mechanisms that can have two roles: a role in information and knowledge transfer between the two parties, and a role in risk control.

Operational management must make it possible to secure these two roles throughout the life of the project, by monitoring its maturation and evolution on the object of cooperation, as well as on the changes in personnel and functions involved within each firm. It then requires the use of a large number of devices with the most varied profiles.

Research on this subject has noted that the organization of meetings and the use, or even planning, of information exchange alone are not enough to ensure the success of the innovation project [SÄF 14]. Others also noted the particular role of space in coordination methods and knowledge transfer, particularly that of direct physical exchanges through project floors [GAR 96, LAK 06a], collaborative innovation spaces [FAB 17] and physical objects [BRE 13, GAR 96, KOS 09, LED 14].

Nevertheless, the mechanisms for exchanging information between clients and suppliers involved in an innovation project require a careful balance so that their impact remains positive on the performance of the relationship [SOB 02]. The manner and context of these exchanges also impact the nature and effect of the knowledge exchanged: it can either be solely transferred from one body to another or generate joint learning through the quality and extent of the inter-firm relationship [ROS 14].