Selecting an open innovation community as an alliance partner: Looking for healthy communities and ecosystems

Abstract

Organizations build strategic alliances with other firms with the intent of tapping into partners’ resources and capturing long-term value from these relationships. Such partnerships are typically governed by contractual or equity arrangements with clear mutual obligations. More recently, however, organizations have begun to seek strategic partnerships with open innovation communities, which are novel digitally enabled forms of organizing, and where contractual commitments are not possible. Thus, selecting the right open innovation community as an alliance partner becomes a more complex decision. We follow how the organizational decision makers, in two technology firms that were pioneers of forming strategic alliances with open innovation communities, developed metrics around making such decisions. We build upon Shah and Swaminathan’s (2008) contingency model of alliance partner selection and consider how it applies to the case of partnering with open innovation communities. This framework was useful in to frame our findings, yet our work recognizes and builds upon two key differences: 1) the evaluation metrics used in selecting an open innovation community were more focused on value creation than value capture; and 2) open ecosystem considerations, and not just partner-specific metrics, featured prominently in this type of alliance partner evaluation. We develop the notions of community and ecosystem health to refer to these new metrics.