February 3, 2006
Network consortium agreements
One of the biggest issues facing collaborative business networks is what legal form they should take. Too loose and they lack accountability and robustness but too tight and they become hamstrung and inflexible. Enter the Unincorporated Association and the Consortium Agreement.
According to David McIlwaine of the international law firm Pinsent Masons there is now a new legal form known as an “Unincorporated Association” (UA) which may be ideal for many networks.
A UA is very flexible and easy to setup: all that needs to happen is that the members commit to a ‘Consortium Agreement’ which typically covers the following:
- Objectives
- How to become a member
- Membership Fees
- Meetings and Voting Rights
- Role of Management Committee
- Responsibilities for Business Development
- Responsibilities for managing finance
- Confidentiality and IPR
- Disputes
- Liability of Members (and brokers)
- Exit of Members
A UA does however have unlimited liability: if this is a problem for the network they should consider a “Company Limited by Guarantee”(CLG).
See also Collaboration: legal frameworks available.
Posted by Ken Thompson on February 3, 2006 at 11:00 PM in Networks & Clusters | Permalink | Comments (0)
January 27, 2006
New industry ecosystems predicted
One of the Ten Trends to watch in 2006, according to the McKinsey Quarterly (Jan 2006), will be the emergence of new global structures with a barbell-like structure, with a few giants on top, a narrow middle, and a flourish of smaller, fast-moving players on the bottom.
Similarly, corporate borders are becoming blurrier as interlinked "ecosystems" of suppliers, producers, and customers emerge.
This is resonates with what we have seen emerging over the last few years under the tag Virtual Enterprise Networks.
For a quick summary of all ten trends.
Posted by Ken Thompson on January 27, 2006 at 12:00 AM in Networks & Clusters | Permalink | Comments (0)
January 19, 2006
Collaboration: legal frameworks available
At a workshop today,19 Jan 2006, in Belfast entitled Legal Frameworks to support clusters and networks, Marco Conte of Collaborative Engineering (Rome) presented a unique set of Model Contracts developed by the EU Alive Project which provides detailed guidelines and templates covering the pre-contract, contract and post-contract aspects of collaboration for businesses cooperating in virtual networks and clusters.
The Alive Model Contracts contain 3 detailed templates
- Letter of Intent (LOI)
This is a pre-contractual bi-lateral agreement between a network business and the network “Business Integrator” used in the opportunity evaluation phase.
- Virtual Enterprise Agreement (VEA)
This is a very detailed agreement between every member of the network and covering all aspects of internal relations (e.g. IP), external matters (e.g. future relationships and ownership of customers) and hybrid matters (such as liability and dissolution of the virtual enterprise).
- Memorandum of Understanding (MOU)
This is an optional consortium agreement that can be used before a VEA is created if it is particularly important to create clarity around the roles and IP.
A full set of Model Contracts can be downloaded from the download area of the project web-site.
Posted by Ken Thompson on January 19, 2006 at 06:55 PM in Networks & Clusters | Permalink | Comments (1)
November 24, 2005
A Collaboration Maturity Model
A CMM for collaborative networks
Over the last year months a group of cluster facilitators and network coaches in Northern Ireland, including myself, have been working under the auspices of the Cluster Facilitators Forum, to try and develop a non-proprietary open model to guide how collaboration can develop between businesses through clusters and networks.
The ambition is partly inspired by the hugely influential CMM framework for software capability originally developed by the Software Engineering Institute at CMU.
Below is a diagram which summarises the current state of the CFF collaborative network maturity model:
Like all models this one needs to be viewed in the light of Einstein's famous quote:
"All models are wrong but some are useful"
The model is intended to help place a network or cluster on the spectrum of collaboration and to assist in identification of priorities and supporting interventions.
Of course it is an over-simplification and should not be taken to imply that real networks develop in such tidy and linear stages!
For further information on the model contact Ian McAuley at the CFF.
Posted by Ken Thompson on November 24, 2005 at 12:00 PM in Networks & Clusters | Permalink | Comments (2)
November 16, 2005
My best collaborative business network articles
Here is a collection of my 7 most popular articles on collaborative and virtual business networks based on user feedback and page views:
- A Taxonomy of Virtual Business Networks
- A checklist for assessing virtual business networks
- Virtual Enterprise Networks allow business scale through virtual collaboration
- Instant collaborative business networks
- A kick-start plan for setting up a Virtual Enterprise Network in 6 weeks
- Achieve real competitive advantage by partnering with small IT Vendor networks
- Achieve supply chain agility through Virtual Enterprise Networks
Posted by Ken Thompson on November 16, 2005 at 01:46 PM in Networks & Clusters | Permalink | Comments (0)
September 30, 2005
Instant collaborative business networks
The Instant Network - just add facilitated conversations!
As a facilitator I do a lot of work with groups of small businesses who say they are interested in "collaborating as a network" (whatever that means).
The conventional approach to working with such a group is to first build some trust, exchange company information and then start exploring collaboration possibilities.
The problem is that this approach does not really work!
The first problem is that it usually takes far too long, never gains enough momentum or continuity and the companies lose interest and drop out.
The second major problem with it is this:
Let's imagine you have invested in building "enough trust" with the group - what do you do if you find after all this effort and time that you don't actually have the right companies in the network?
So I will share with you a technique I try to use in my very first meeting with a potential network of companies or professionals which overcomes all these problems - "Instant Network".
Instant Network is one of about 15 techniques you can use with networks, teams and communities.
The main objective of "Instant Network" is to find out if there are enough potential collaborative supply chains within the group to make a network or not.
The other objective, which is just as important, is to do this very quickly in a way, which is highly interactive, engaging, and develops new relationships.
In addition I always try and send each participant away with at least one new 'channel to market opportunity' even if they never come to another network meeting.
There is a very important rule when working with small businesses - never ever waste their time at a workshop - always send them away with something they value - even if the workshop cannot deliver its primary objective.
The aim of "Instant Network" is to establish collaborative sub-clusters by identifying collaborative product/service offers and companies who can play the following roles:
Here is an abridged version of how "Instant Network" works:
Step 1
Everyone identifies their core business offer and puts it on a YELLOW card with their name and sticks it up on a large whiteboard. I call these YELLOW cards Core Product Providers.
Step 2
Everyone reads all the cards and must fill out at least one BLUE card and sticks it beside any Core Product card (YELLOW) that they believe they might be able to produce a new customer for. I call these BLUE cards Channels.
Step 3
Everyone also fills out at least one PURPLE card for any YELLOW card that they believe they have some knowledge or product which could make a core product more valuable. They stick these up too beside the YELLOW Core Product cards -I call these PURPLE cards Innovators.
Step 4
We examine the whiteboard and see how many natural sub-clusters made up of Core Product Providers, one or more Channels and one or more Innovators we can find.
Step 5
I then ask the participants to look for opportunities to merge these sub-clusters with the objective having of not more than 4 merged clusters. Also each merged cluster should have least 4 players one of whom should be a channel or it is not viable.
Step 6
I then get the participants to go back to work on these merged clusters to explore the possibilities and requirements for three further roles and they stick more cards into the clusters on the whiteboard for:
- RED - Supporting Service Provider - provides a critical supporting service for the collaborative product
- ORANGE - Integrator - plays a key design or integration role in the new collaborative product
- GREY - Investor - can provide finance or resources needed to make the collective supply chain viable and attractive to the market
Step 7
We then do a quick 'tidyup' to name and scope each of the merged clusters as "collaborative product offers". Then we close-out by seeking feedback from each of the participants to see if they are intrigued enough to want to collaborate further to develop each of the merged clusters.
Result!
Foundations for an 'Instant Collaborative Network'
... consisting of 3-4 potential collaborative supply chains
... with self-selecting work groups
... who want to work together to establish their feasibility, identify required additional players and develop a strategy and plan for each of them.
Conclusions
The bottom line is that a single enterprise can define its strategy first and then go and try and acquire the necessary resources and skills to implement it. However business networks don't work like this.
A business network's strategy and viability is only established by first examining its collective capabilities to see what it can actually do.
Only then does any network strategy for business development, marketing, new product development and alliances make any sense.
If you get this first network engagement right then you are well on the way to starting the incubation of a successful and sustainable collaborative business network
Posted by Ken Thompson on September 30, 2005 at 09:28 PM in Networks & Clusters | Permalink | Comments (0)
September 27, 2005
Innovation Networks improve new product flow
If you want to innovate you must first learn to collaborate
A couple of years ago I co-authored a major report for Forfas (the Irish national policy advisory board for enterprise, trade, science, technology and innovation) on Innovation Networks under the overall editorship of Tom Martin.
The report was published in June 2004 and it encouraging to see some of the major research houses such as Forrester echoing the same theme of networks as the new hotspots of innovation.
Forrester research is expensive (and concise) but I thought I would highlight three of their titles as it reinforces the message that we are moving rapidly beyond an economy based on companies and supply chains to one based on networks:
- Innovation Networks
A New Market Structure Will Revitalize Invention-To-Innovation Cycles
- US Innovation Agenda Must Focus On Networks
The US Must Restructure Investments To Win In Global Innovation Networks
- Software Innovation Networks Go Vertical
A New Market Structure Will Help Vendors Deliver Vertical Software Innovations
I include links and an executive summary paragraph for each report ….
Innovation Networks - A New Market Structure Will Revitalize Invention-To-Innovation Cycles
EXECUTIVE SUMMARY
Length: 21 pages
Finicky customers, ruthless competition, and stringent regulations are accelerating demand for technology-enabled innovation. But supply-side deficiency and ineffectiveness hamper firms' ability to convert inventions into profitable innovations. The result? A new market ecosystem — called Innovation Networks — will emerge to match global demand for innovation with worldwide supply. Innovation Networks will let firms fluidly weave internally and externally available invention and innovation services to optimize the profitability of their products, services, and business models. Innovation Networks will deconstruct vertically integrated invention-to-innovation cycles in software, finance, and CPG industries — and reinvent the formula for success in regional, national, and global markets.
EXECUTIVE SUMMARY
Length: 9 pages
On December 15, the US Council on Competitiveness hosted the National Innovation Initiative (NII) Summit. The NII recommended creating a US innovation agenda to reverse the decline in America's ability to compete globally based on innovation. The NII Summit's focus on talent, investment, and infrastructure are solid. But the US can't win in this global competition merely by more invention. It must also internalize a new game — which Forrester calls Innovation Networks — in which US players must engage rival firms from around the world in a co-opetitive game that combines transformation, brokering, and financing, as well as invention.
EXECUTIVE SUMMARY
Length: 11 pages
Vertical-specific Software Innovation Networks will become the hotbeds for technology advances, with multiple networks battling it out in each vertical. These networks — made up of ISVs, service providers, and forward-thinking users — will collaboratively develop and market industry-specific solutions built on top of software platforms from IBM, Microsoft, Oracle, and SAP. These networks will allow smart CIOs to consolidate their platform investments and only consider vendors with strong commitments to the platform of their choice. Forward-thinking ISVs will ditch their "not-invented-here" mindset in favor of "best-from-anywhere" to exploit economies of scale offered by vertical Software Innovation Networks.
Posted by Ken Thompson on September 27, 2005 at 10:02 AM in Networks & Clusters | Permalink | Comments (0)
September 14, 2005
Public sector should buy more from small business
Levelling the playing field for UK SMEs
In an article, UK SMEs Get Green Light from Government, published Friday 9 September 2005, the UK eGov monitor Newsdesk reports that public sector buyers now require 'good reason' not to use smaller suppliers.
The minister's call came in light of a new report on the "benefits of public sector procurement from small business" which concludes that government buyers should "seriously consider" bids from smaller firms.
The 122-page study reels off a list of twenty success stories where forward-thinking public bodies received huge benefits through working with small and medium-sized enterprises.
Somewhat surprisingly the report focuses on single SMEs and seems to ignore the benefits of SME collaborative networks in giving "virtual scale" to small businesses to enable them to bid for the larger public sector contracts normally reserved for major suppliers.
For example the power and advantages of well organised small business networks of IT suppliers is discussed in Achieve real competitive advantage by partnering with small IT Vendor networks.
Posted by Ken Thompson on September 14, 2005 at 12:00 AM in Networks & Clusters | Permalink | Comments (0)
September 2, 2005
A checklist for assessing virtual business networks
Ten questions to ‘healthcheck’ a collaborative business network
All business networks are not equal
In Virtual Enterprise Networks allow business scale through virtual collaboration, I discussed the Virtual Enterprise Network (VEN) as an important new collaborative enterprise which small businesses are using to achieve ‘virtual scale’ without sacrificing control and agility.
A key differentiator of VENs from other types of business network is that the member companies have made real and serious investments in creating a collaborative network enterprise and all this implies.
Despite what a network might call itself many business networks are little more than loose associations of companies who barely know each other and have not invested in learning to collaborate together.
These kind of opportunistic business networks believe that when they win the first customer contract that will be time enough to learn to collaborate.
In the real world however this is not something that discerning and demanding customer organisations are likely to give them the chance to prove!
It is important therefore that if you are a prospective customer of a VEN or you are a small business thinking of joining a VEN to have a way to check-out how serious a collaborative enterprise such a network is.
Ten questions for assessing a collaborative business network/cluster
1. Network Mobilisation
Has the network completed a formal network mobilisation process to align member goals, inputs and expectations?
2. Management Resources
Does the network have dedicated network management resources in the key areas of overall network leadership and administration/technology support?
3. Ground Rules
Has the network agreed Ground Rules which all members must observe to ensure the interests of all members are fairly and transparently governed?
4. Broker & Sales Plan
Is there a dedicated Broker responsible for identifying sales opportunities for the network in line with an agreed business development plan?
5. Capability Map
Have the companies aggregated and analysed their capabilities to identify core/quick win areas and gaps where new members may needed?
6. Tenderfeeds
Does the network have access to regular tender information backed up by a systematic process for qualifying and processing opportunities?
7. Affiliate Management
Does the network have a process for managing new and affiliate companies to ensure they are properly considered for bids and have good regular information which keeps them informed about network activities and opportunities?
8. Innovation & Alliances Plan
Does the network have a committed strategy and plan for collaborative product development (generally involving an applied research group/project funding), external product sourcing and the formation of useful alliances with other networks?
9. Common Processes
Does the network have common and regularly updated processes covering the execution, management and reporting/liaison of internal and customer-facing projects?
10. Collaborative Legal Agreements
Has the network developed detailed legal agreements to underpin collaborative working in key areas such as Intellectual Property, non-performance and risk/rewards?
Analysing a network’s responses
If a network can answer ‘Yes’ supported by evidence for five or more of these questions then there is a good chance that they are serious about operating as a collaborative network.
If the network can say ‘Yes’ to seven or more then you probably have found a very strong network you can work with.
If the network can only say ‘Yes’ to a couple of the questions then you have a network which probably should be avoided for one of two very different reasons:
- a network in its early stages which needs more time to develop or
- a ‘network of convenience’ which is unlikely to be a good strategic partner
Posted by Ken Thompson on September 2, 2005 at 12:00 AM in Networks & Clusters | Permalink | Comments (0)
September 1, 2005
New UK biotechnology network portal launched
A new network portal called esymbio has been launched by MerseyBIO, the life sciences sector support organization for Merseyside.
The portal aims to create an infrastructure to foster collaboration between biotechnology companies, investors and public bodies and will provide personalised access to knowledge and networks of experts.
The project is backed by public institutions such as the University of Liverpool and the North West Genetic Knowledge Park and was designed by Northwest-based Internet specialists Amaze using information retrieval tools from the Cambridge-based company AutonomyTM.
Posted by Ken Thompson on September 1, 2005 at 10:05 AM in Networks & Clusters | Permalink | Comments (0)
New industry ecosystems predicted
January 27, 2006
Collaboration: legal frameworks available
January 19, 2006
A Collaboration Maturity Model
November 24, 2005
My best collaborative business network articles
November 16, 2005
