- White Belt
- Posts: 20
- Joined: Thu May 10, 2007 7:03 am
As I try to learn how to be more effective in the world of innovation, I make periodic posts to my weblog. It helps me think more clearly, and it's kind of therapeutic.
Lately, my colleagues and I have been wrestling with how to overcome the challenges that are inherent with asymmetric partnerships--a licensing agreement between a large company and a small firm or individual inventor, for example. I thought some of you in this forum might find <a href="http://swni.typepad.com/dispatches/2007/09/asymmetric-part.html">my summary of some relevant research</a> helpful. The basic ideas is that the chances of successful collaborations will increase if both parties have a better understanding of each other's objectives and limitations.
Here's the short version:
Large firms want access to prospective innovations in order to help them achieve their growth objectives. Small firms want access to large firms' manufacturing, marketing, and distribution capacities in order to maximize their chances for (and speed of) success.
However, the strategic objective of partnerships is viewed very differently by large firms and small firms. Small firms are seeking commitment. Large firms, on the other hand, seek flexibility--they are motivated to make commitment contingent.
Furthermore, the pace of decision-making is very, very different. Small firms and individuals can make decisions almost instantaneously. Decision-making at large firms is slow, complex, and <a href="http://swni.typepad.com/dispatches/2007/06/hunting-moby-di.html">unpredictable</a>.
The net result is a lack of trust (which is exacerbated by both parties' fear of losing control over their respective insights, learning, and intellectual property). Unfortunately, <a href="http://swni.typepad.com/dispatches/2007/09/the-trust-parad.html">building trust is the hardest when it is needed the most</a>.
Many inventors and entrepreneurs decide to wash their hands of large companies and conclude that it is better to go it alone. Sometimes, that is probably the right call. (My colleagues and I come to that conclusion, too, in some situations.) Even so, it strikes me that, while hard, collaboration between small and large firms is sometimes so compelling that it makes sense to figure out how to cultivate trust.
How have you been able to develop sufficient trust to enable a successful license deal with a large company?
Read my blog: <a href="http://swni.typepad.com/dispatches/">http://swni.typepad.com/dispatches/</a>