Facilitating Radical Collaboration in Open Innovation : A case study in collaboration with IKEA

Abstract: The increased customer demand for innovative and sustainable solutions implies that companies need to seek knowledge, and insights, beyond their traditional business models. This by opening up barriers and collaborating with other stakeholders. Using this approach is referred to in the literature as practicing open innovation. There is however a lack of research on open innovation concerning radical innovation and collaboration. The purpose of this report is to fill this research gap by investigating how a large incumbent company can set up radical collaboration in an open innovation space. The gap will be filled by conducting a qualitative and explorative cross-case analysis with the hosting company of this study, IKEA, and the research questions presented in this report aims to assist IKEA in the set of radical collaboration. The research question and related results were divided into four parts; Strategy implications, partner selection criteria, challenges and success factors. Regarding the first sub-research question, the strategy of the OIS should be aligned to the long-term goals of the parent firm but the short-term targets should not be controlled. This in order to give the OIS mandate to come up with unexpected and radical solutions. Moreover, in the partner selection process, important criteria to consider for radical collaboration are shared values, culture, and commitment to the project. Concerning challenges with radical collaboration, these are: Clear expectations, Contracts, Identifying focus areas, Implementation of the innovations, Innovation strategy renewal, Introduction of a new concept, NDA’s, Outsourcing and Organizational behavior. Lastly, the findings show that autonomy, self-control, communication, and structure are important success factors. The related recommendation of this thesis is that large established companies, looking to pursue radical collaboration in an open innovation format, should consider these insights to be successful. It should however be made clear that radical innovation practices tend to be more complex and time-consuming. Thus, KPIs for success may need to be revisited in firms traditionally seeking incremental innovations with in-house innovation practices.