When centralization helps: accessing partners' knowledge
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Today's paper:
Balachandran, S., & Eklund, J. (2024). The impact of partner organizational structure on innovation. Administrative Science Quarterly, 69(1), 80-130. The full text is here.
What was the question?
How does the centralisation of a big partner affects innovation outcomes of a small partner? (spoiler: positively).
Why is this important?
When a small firm wants to get knowledge from a big partner, it often boils down to two problems:
Who has the knowledge that I need in this huge organization?
How easily can I get this knowledge?
The answers depend on how centralized this big partner is. What exactly is the "knowledge"? The paper talks about a very specific type of expertise, but for us, it can be everything that affects your work. "The province will give more subsidies to start-ups in the circular economy this year" is knowledge; "Their manager is a stubborn asshole" is knowledge too.
How did the researchers try to answer this question?
They did an archival analysis of partnerships between small startups and big pharma in the US between 1995 and 2012 and then followed it up with interviews to double-check findings.
What did they find out?
If a big partner is centralized, it gives a small partner access to a wider range of knowledge. At the same time, it might be harder to obtain this knowledge due to complex decision-making processes in a big organization.
If a big partner is decentralized, you can get quicker access to their knowledge, but only to a very specific part of it. It means that you are probably underutilizing the expertise of a big partner. It is less relevant if both organizations have very, very narrow expertise (but this is rare).
What else should we know?
Two things:
Decentralized organizations struggle to share information internally too. If it is crucial for your organization to share knowledge with all the members (and/or the partners), you need some degree of centralization. Drop me an email at aliona.ignatieva@gmail.com if you need more information.
It takes time. We all know that organizational changes are slow, but we often underestimate how slow they are. This study shows that after big organizations made their structures more centralized, it took more than two years to see positive effects for their partners. Keep this in mind when planning evaluations.
How can we use this information right away?
Although the database/knowledge base is a desirable solution for many partnerships, it is rarely feasible. Instead, assign a dedicated person who can act as a liaison or account manager for an hour or two per week, and make sure all your partners know this person.
Share your detailed org chart with your partners; they might work with one department now, but sharing this information may open up new collaborative opportunities. Don't forget to keep it updated - this is exactly the task for the liaison we mentioned above.
Arrange (or ask for, if you are a smaller partner) a training session for your partners to understand your organization’s internal processes and knowledge management systems. It will take you a couple of hours in total but will help your partners form realistic expectations and save a lot of frustration.
Knowledge sharing with your partners cannot be successful if knowledge sharing within your organization does not work smoothly. This is a separate big topic, but there are many small things you can do right now, such as setting up regular random coffee chats with people from different departments to facilitate informal networking.
