From the Editor: Beyond the Organization

When you hear the term “business leader,” there’s a natural tendency to think of someone leading a business — and all of the talent and knowledge within that organization. However, business executives today often need to harness the energy not just of the talented people within an organization, but of those outside of it as well. In this issue of MIT Sloan Management Review, a number of authors explore various aspects of leading beyond organizational boundaries.

As part of our special report on leveraging external innovation, Alan MacCormack, Fiona Murray and Erika Wagner examine the phenomenon of corporations using innovation contests to attract the best ideas from beyond their organizations. They write: “Companies are searching for better ways to identify and exploit novel solutions. Increasingly, they are discovering that many of the very best ideas lie outside their organizations, in an ecosystem of potential innovators who possess wide-ranging skills and knowledge.”

In their article “Innovation Process Benefits: The Journey as Reward,” Christina Raasch and Eric von Hippel explore what motivates volunteers to take part in innovation projects — and how companies that sponsor such projects can better attract individuals from outside the organization to participate. And in an article titled “Using Open Innovation to Identify the Best Ideas,” Andrew King and Karim R. Lakhani help executives determine which parts of their innovation processes to open up to the wider world.

As these articles suggest, learning how to work with innovators who are not employees is a timely topic for business leaders. But innovation isn’t the only business process reaching beyond organizational boundaries. In “Designing Effective Knowledge Networks,” Katrina Pugh and Laurence Prusak look at knowledge management in a networked era. “Knowledge networks,” Pugh and Prusak write, “are collections of individuals and teams who come together across organizational, spatial and disciplinary boundaries to invent and share a body of knowledge.” As Pugh and Prusak’s article explains, individuals in some cases join knowledge networks within their companies but in other cases interact with people in other organizations through such networks.

As if thinking about business beyond organizational boundaries isn’t complicated enough, three authors in this issue — Fredrik Hacklin, Boris Battistini and Georg von Krogh — examine another familiar business boundary that is becoming more fluid: the boundary between industries. In their article “Strategic Choices in Converging Industries,” Hacklin, Battistini and von Krogh describe the strategic options available to companies when two or more industries start to merge into one. Industry convergence presents businesses not only with opportunities but also with considerable challenges, as the authors illustrate with examples from their study of the fast-changing telecommunications, information technology, media and entertainment industries. “With convergence,” they write, “companies that were in seemingly unrelated businesses can become rivals.”

In other words, in today’s business world, both potential collaborators and potential competitors can come from almost anywhere. That makes business leadership more complicated, no doubt, but also opens up new possibilities. As you read this issue of MIT Sloan Management Review, I hope you’ll enjoy learning about the creative ways that many organizations — large and small, established and young — are tapping into the innovative power and knowledge that lie beyond organizational boundaries.

Martha E. Mangelsdorf
Editorial Director
MIT Sloan Management Review