CCOO--IINNNNOOVVAATTIIOONN PPLLAATTFFOORRMMSS C O - I N A Playbook for Enabling Innovation N and Ecosystem Growth O V A T I O N P L A T F O R M S TAMMY L. MADSEN DAVID CRUICKSHANK Co-Innovation Platforms · Tammy L. Madsen David Cruickshank Co-Innovation Platforms A Playbook for Enabling Innovation and Ecosystem Growth Tammy L. Madsen David Cruickshank Santa Clara University SAP Santa Clara, CA, USA Palo Alto, CA, USA ISBN 978-3-030-75976-6 ISBN 978-3-030-75977-3 (eBook) https://doi.org/10.1007/978-3-030-75977-3 ©The Editor(s) (if applicable) andThe Author(s), under exclusive license to Springer Nature Switzerland AG 2022 This work is subject to copyright. 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Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made.The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover credit: David Cruickshank This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland To Julie, Chelsea and Jaclyn Cruickshank, who without hesitation or failure, continuously support me with their love, time, empathy and endless encouragement. It was foundational to this entire endeavor for which I am forever grateful —David Cruickshank To Stephen Loy and James L. Madsen —Tammy L. Madsen To all the co-innovators who inspired this work… Preface ItwasasunnyafternooninSeptemberof2009attheLeaveySchoolofBusi- ness,SantaClaraUniversity(SCU),whenacolleague,ProfessorManoochehr Ghiassi,stoppedbyTammy’sofficetoaskifshewouldserveasathesisadvisor for a student in SCU’s Master of Science in Information Systems (MSIS) program.HementionedthestudentwasaDirectoratSAPandhadaunique project proposal. Professor Ghiassi thought the thesis topic was at the inter- section of strategy and IS, would I take a look? And that is where our, David andTammy’s,co-innovationbegan.Thethesis,exploringtheefficacyofSAP’s first co-innovation enablement platform, was completed in 2010 and David graduated.Sincethattime,wehavepresenteddifferentpartsoftheprojectat theAcademyofManagementConference,theStrategicManagementSociety Conference,theWorldOpenInnovationConference,theDruidConference, and the Strategic Management Review’s Conference on Open Innovation. David continued to direct SAP’s first co-innovation platform in Palo Alto, California, referenced as the Co-Innovation Lab or COIL. As COIL evolved, we iterated between practice and scholarship to develop the co- innovation platform model and how it contributed to ecosystem growth. In so doing, we were frustrated somewhat by the plethora of definitions that existed for ecosystems. We viewed this as the ecosystem soup effect—every- thingwasbeginningtobelabeledasanecosystemandavarietyofstudiesand consulting firms offered different guidance regarding ecosystem strategy.The platform literature was more coherent but research tended to focus largely on transaction or hybrid platforms and this focus served as an anchor for vii viii Preface theory as well. Where did the phenomena fit? If it was not like hybrid plat- forms such as Apple’s iOS platform or Google’s Android; it also was not similar to a transaction platform, such as those used by eBay, Airbnb, or Uber. It had some attributes in common with industry platforms discussed in early insightful work by Annabelle Gawer and Michael A. Cusumano but also differed dramatically in other ways. In our view, scholarly work lacked other innovation platform models that actively worked with complementors tocreatepartnershipsandprovidedresourcesandcapabilitiestohelpcomple- mentors co-innovate.The platform’s degree of resource openness is one of its distinguishingcharacteristics—itplaysavitalroleinshapinginnovationinan ecosystemandenablingawiderangeofcross-industryco-innovationprojects. Asweintegratedideasfromworkonopeninnovation,strategy,ecosystems, and platforms, we wondered what might be the best avenue for sharing the model. We also wanted to share the ideas with a broad audience. A book format allowed us to do so and gave us an opportunity to elaborate on the ideas, share multiple rich case studies, and devote attention to making the ideas actionable. Fastforward10years:Wecontinuedtomeettodiscussco-innovationand theplatformmodel.Bythistime,SAPhadestablished14moreco-innovation platforms across the world; the additional locations were designed based on best practices from the first platform located in Palo Alto, California. We began to take a closer look at data on co-innovation projects, searching for patterns and trends. How were partners using the platform? What did they value? What value did they capture? Did complementors mostly pursue a singleprojectorengageinserialco-innovation?Ifcomplementorsengagedin more than one project, did they work with the same partners, other comple- mentors affiliated with the platform, or firms external to the ecosystem? We observed a variety of patterns and recognized the need for more in depth analysis of multiple cases.We also wanted to spend more time speaking with co-innovation project participants. Additionally, David was struck by the number of companies and organizations that approached him about repli- catingthemodel.Theinterestandimitationreinforcedthevalueofthemodel and motivated us to continue our pursuit. During this period, our jobs also evolved. David moved from Director of SAP COIL Palo Alto to a new role as Vice President, SAP Multicloud Service and Operations (DevOps). Tammy was promoted to Full Professor, awarded the W. M. Keck Foundation Chair at SCU, and served as Associate Dean at the Leavey School of Business; she also was elected to, and served on, the Board Governors of the Academy of Management, and continues to serve on the Advisory Board of the Global Innovation Institute (GInI). Preface ix While our new roles were fairly consuming, we continued to meet to discuss co-innovation.Eachmeetingbroughtnewideas—itwastheepitomeofprac- tice meets academic work. David would stop by Tammy’s SCU office to chat about our evolving book proposal but the conversations always led to an increased understanding of what chronically contributes to successful co- innovation outcomes. While each meeting began with a focused agenda, the richnessstemmedfromDavid’sstoriesofrecentorpastco-innovationproject cases,fromconversationswithco-innovators,andfromplatformevents.After these meetings, Tammy and David would step back and think about how lessons from the cases and insights from co-innovators shaped our under- standingoftheplatformmodel.Whatnewlessonswerelearned?Also,during this period, a burst of new studies on ecosystems and platforms emerged, advancing our understanding and informing our framing. As a result, the book benefitsfrom a growing set of rich empirical and theoretical studies. As a preview, the book: (cid:129) Offers a novel approach for developing and maintaining a productive ecosystem—a co-innovation platform. (cid:129) Illustrates how to create and capture value from a co-innovation plat- form and how participating in projects with the platform can expose organizations to unexpected opportunities. (cid:129) Provides readers with strategies and practices to initiate, enable, and manage co-innovation and to advance ecosystem growth. Santa Clara, USA Tammy L. Madsen Palo Alto, USA David Cruickshank Acknowledgements The book is a result of over a decade of practice, research, and teaching in the areas of strategic innovation, platforms, and ecosystems. Over this period, various audiences—executives, SAP partners,Tammy’s students, and colleagues in the academic community—helped us refine the ideas. A huge thank you goes to Tammy’s colleagues who provided detailed comments on multiple chapters and served as sounding boards for ideas, examples, figures, and concepts: Professors Michael Leiblein, Kumar Sarangee,DaraSzyliowicz,andJenniferWoolley.WealsoaregratefultoAnne MarieKnottandMelissaSchillingforadviceandsharingtheirbookproposals with us and to Ron Adner for insights on the book publishing process. Tammy is indebted to her support network who were always willing to hear anotherstoryaboutthebookorthebook’sschedule:DavidHoopes,Michael Janis, Shaohua Lu, Nydia MacGregor, Jo-Ellen Pozner, Barry Posner, Kumar Sarangee, Dara Szyliowicz, Jennifer Woolley, and Adele Xing. Classroom discussions with executives, Executive MBA students, and MBA students helped us ensure the ideas are actionable. Lastly, Tammy thanks the Leavey School of Business, theW. M. Keck Foundation, and Santa Clara University for research support. The work of academics and business leaders studying ecosystems, plat- forms, open innovation, strategy, alliances & partnerships, and innovation management also sharpened and advanced our thinking: Ron Adner, Jay Barney, Carmelo Cennamo, John Carter, Michael A. Cusumano, Henry Chesbrough,AndreDelbecq,PeteDeLisi,JeffDyer,RaghuGarud,Annabelle xi xii Acknowledgements Gawer, Robert Grant, Andrei Hagui, Andy Hargadon, Connie Helfat, Prashant Kale, Rahul Kapoor, Anne Marie Knott, Michael G. Jacobides, Daniel Levinthal, Nilofer Merchant, Geoffrey Parker, Gary Pisano, Martin Reeves,JoostRietveld,MelissaSchilling,HarbirSingh,RobertSutton,David Teece, Marshall Van Alstyne, Andy Van de Ven, Gordon Walker, and Joel West. David’s co-innovation expertise was shaped by interactions with many people throughout his life and career. Those on the shortlist sincerely influ- enced the learning journey: Mildred Cruickshank, Carol Stewart, Anne Jameson, Charles Jameson I, Charles Jameson II, Dr. Landis Stewart, Joseph D. Stewart, John Harrison, Trudy McSorley, Alice Mott, Doug Miller, Jim Neal, Dr. Richard Mackinaw, Senator Donald Riegle, Don Burr, Chris Tholaug, PaulVan Gelder, MaxTempleton,Thaddeus Bier, Don Bragg, Ken Tew, Pierre Saumande, Robert Thomas, Mark Yolton, and Dr. Tammy L. Madsen. We are grateful to several executives who shared their insights and co- innovation experiences with us: Scott Allen, Kathy Barboza, Rudi Held, Sam Lakkundi, Christine Puccio, Roland Wartenberg, Tom Turchoie, and Andreas Schneider. David also thanks the entire SAP Co-Innovation Lab Team for their outstanding collaboration commitment and expertise over more than a decade to make co-innovation tangible: Axel H. Saleck, Kevin Liu, Stan Arnbrister, Roger Geddes, Manfred Pauli, Siva Gopal, Bjoern Ganzhorn, Shuuji Watanabe, Goran Stoiljkovski, Igor Pak, Rudi de Louw, Irakli Natsvlishnili, Dong Woo Lee, Vasanth Kumar, Pascal Hagerdorn, Jun Matsumoto, Peter Kulka, Hans-Joachim Odolonzski, Andrea Dell- muth, Winston Khoo, Ronildo Santos, Jurgen Opgenorth, Milau Pape, MartinRosjat,ManjunathChandrashekar,SinanTumer,JoachimVonGoetz, Peter Aeschlimann, Joerg Nalik, Igor Khrugin, and the team’s always smart and supportive legal colleagues, Christoph Stieler, Andrew McDowell, and Michael Bascobet. David also thanks those chronically supporting, advocating, and contributing to co-innovation and ecosystem innovation success: David Korn,DonHowe,ChristineBrennan,JeffThurston,BerndHarold,Luciano Rivera, David Hess, Sherry Yu, David Stump, Jay Thoden Van Velzen, James O’Donnell, Loraine Howell, Hardik Patel, Clark Masters, Denis Browne,SamYen,LarryMorgan,AlexandraUhleherr-McGhee,MaxWessel, Rodolpho Cardenuto, Paul Hoffman, Keith Klemba, Wes Mukai, Prakash Darji, Steve Lucas, Dominick Coligliano, Stephen DeAngelis, Maria Simo- nians, Sven Brueckner, John Applby, Dinesh Sharma, Holly Castro-Sharp, Annie Mu Hayward, Peggy Scott, Heidi Johannsen, Raquel Fanucci, Debra