Executive Interviews: Interview with Alan MacCormack on Collaboration
March 2008 - By Dr. Nagendra V Chowdary

Alan MacCormack
Associate Professor in the Technology and Operations Management, Harvard Business School.

• What principles are followed by firms that are successful in collaboration efforts?

1. Develop a collaboration strategy that is aligned to business needs.

   At its heart, this requires assessing how collaboration can help firms improve alongmultiple performance dimensions, including both lower product cost and increased product differentiation. With respect to the latter, we saw firms achieve greater differentiation in two ways; first, by leveraging a partner's superior capabilities and skills, and second, by accessing a partner's unique contextual knowledge, the knowledge and relationships it possesses by virtue of its local position. In combination, these three benefits cost, capability and contextual knowledge comprise what we call the "3Cs" of a global collaboration strategy.

2. Organize for effective collaboration.

   Firms that manage collaboration like outsourcing tend to adopt a "transactional" model. They treat partners like component suppliers, and focus their efforts on how to specify what is required from them in great detail. By contrast, successful firms recognize the inherent uncertainty in innovation projects, where a range of problemswhich cannot be predicted in advance must be tackled. These firms make very different organizational choices in terms of team design, contract structure and intellectual property management

3. Build your collaborative capabilities.

   Many managers incorrectly assume their firms are already equipped to work with partners. They believe it is possible to get it "right the first time" and are surprised and upset when things don't go according to plan. Yet firms are rarely good at collaboration in their initial efforts. Leading firms recognize this reality, and make investments in people, processes, platforms and programs to enhance performance over time. The result is that they learn to collaborate at a much faster rate than competitors.

• How do firms ensure that collaboration efforts support their business strategy?
  By focusing attention on themost important competitive variables. For example, using a partner to lower cost dramatically may not be the best move if a firm's competitive position is based upon superior performance and quality. Consider that in the automotive industry, both Rolls Royce and Daewoo probably use partners to innovate. But we wouldn't expect them to have similar approaches to collaboration, given they have very different strategies. Firms that do not recognize this fact end up adopting a de facto, unarticulated cost reduction focus. Sometimes, this has serious negative consequences on the most important dimensions of performance.