Organizing continuous product development and commercialization: The collaborative community of firms model

The increased importance of knowledge creation and utilization to global competitiveness has spawned considerable experimentation with organizational designs for product development and commercialization over the last three decades. We discuss innovation-related organizational design developments during this period, showing how firms have moved from stand-alone organizations to multi-firm network organizations to community-based organizational designs. We describe in detail the collaborative community of firms model, the most recent organizational form in this evolutionary process. Our illustrative case is Blade.org, a purposefully designed collaborative community of firms dedicated to the continuous development and commercialization of blade servers, a computer technology with large but unforeseeable market potential. Blade.org's organizational design combines commons for the collective development and sharing of knowledge among member firms with explicit institutional mechanisms for the support of direct inter-member collaboration. These design elements are used to overcome the challenges associated with (a) concurrent technological and market experimentation and (b) the dynamic coordination of a complex emergent system of hardware, software, and services provided by otherwise independent firms. To date, Blade.org has developed sixty new products, providing strong evidence of the innovation prowess of the collaborative community of firms organizational model. Based on our analysis of the evolution of organizational forms and the case of Blade.org, we draw implications for innovation management theory and practice.