Collaboration for Social Innovation: The Dynamics and Challenges of Cross-Sector Projects

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Master Thesis

MSc. BA Strategic Innovation Management

Collaboration for Social Innovation:

The Dynamics and Challenges of Cross-Sector Projects

Name Merisa Kacamakovic

Student number S3827259

Contact m.kacamakovic@rug.nl

Supervisor dr. F. (Florian) Noseleit

Co-assessor prof. dr. P.M.M. (Pedro) de Faria

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Abstract

This study explores the nascent topic of collaboration for social innovation (SI), which entails cross-sector partnerships between highly diverse organizations. This organizational diversity poses a number of challenges on the involved parties, which this study outlines in detail. Adopting an explorative approach, qualitative interviews with ten experts in the field of SI have been conducted, which vary in their sectoral affiliation and expertise to provide a broad spectrum of perspectives. The Agency Theory has been applied to observe the applicability of traditional principal and agent roles in collaborative relationships for SI. The results suggest a clear need to refrain from static role functions and imply that the complexity and collaboration across sectors in SI projects convey new dynamics that demand a more flexible approach. Steps towards alleviating the numerous challenges can be taken through a coordinative, more horizontal principal that focuses on maintaining the vision among the partners and providing guidance, rather than delegating and controlling in the vertical sense.

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1. Introduction

Nowadays, society is witnessing systemic changes that fundamentally transform the prior status quo. Due to the fact that the issue of sustainability has become vitally important, changes are called upon on three dimensions: social, environmental and economic (Borges, Soares & Dandolini, 2016). Thereupon, a novel direction for innovations within the area has emerged throughout the years. Social innovation (SI) is a term used more and more frequently, as a solutionary approach to pressing issues and key challenges such as climate change and alternative energies (Hubert, 2011; Moulaert, Mehmood, MacCallum & Leubolt, 2017). The problems to be addressed require systemic changes of prior behavior and routine for the entire society. Hence, SI encompasses a scope relatively wider than e.g. the replacement of the traditional mobile phone keyboard with a smartphone touch display, as it requires the intertwinement of the three different dimensions. Nevertheless, there is no consensus on the character of SI so far, as current literature on the topic is still sparse in comparison to other fields of innovation (Nicholls, Simon, Gabriel & Whelan, 2015; Borges, Soares & Dandolini, 2016; Herrera, 2015).

A well-known fact, however, is that due to its often disruptive character, SI demands the collaborative effort and joint resources of different partners on the path to successful implementation and routinization (Westley & Vredenburg, 1997; Gray, 1985). These partners can significantly differ in their characteristics, which results in cross-sector partnerships being established among the three main societal sectors: business, government and civil society (Selsky & Parker, 2005; Young, 2000; European Commission, 2013). One omnipresent example for the need of collaboration for SI can be seen in the future of mobility. The conversations about sustainable energies, disruptive business models and structural changes in the automotive industry are becoming more critical, as the European Union has set a goal of reducing greenhouse gas emissions by up to 30 percent in its Europe 2020 Strategy (European Commission, 2013). This implies a radical change for the society, after having used cars with internal combustion engines (ICEs) for the past 100 years (BMU, 2018). On these grounds, collaborative actions of the original equipment manufacturers (OEM), energy providers and the government are increasingly demanded (Kaas et al., McKinsey & Company, 2016). Despite the mutual overlaying mission they embark upon, collaborations such as the aforementioned are often subject to tensions and contradictions.

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a useful lens to identify the dynamics and possible tensions that can occur. Thereby, it can be examined which obstacles need to be overcome on the path to social innovation, where the scope and impact exceed that of innovations that do not aim to substantially transform societal habits and behaviors, such as incremental technical innovations to a certain product.

Whereas there is a significant amount of research on collaboration for innovations such as the previous example, the difficulties that parties working cross-sector for SI are confronted with have not been largely elaborated upon. The field of collaboration for SI still requires profound empirical studies and research (Borges, Soares & Dandolini, 2016). According to Gulati, Nohria & Akbar (2000), “although interorganizational collaborations have been examined widely, few studies provide rigorous, qualitative examinations of the effects of collaborative processes”. Therefore, collaboration for social innovation needs to be handled as a separate field, given that SI projects surpass that of other kinds of innovation with regard to their purpose and outcome, while strongly influencing the lives of societal members at the same time.

Additionally, the theoretical basis of this study, the Agency Theory, is still relatively static in its views on the relationship between principal and agent, lacking the consideration of projects where the roles of involved parties might have to be more flexible or simply not as clearly defined. The extent to which these elements of traditional Agency Theory are still applicable to a complex modern concept like collaboration for SI therefore demands investigation, after past research suggested that “knowledge creation occurs in the context of a community, one that is fluid and evolving rather than tightly bound or static” (Powell, Koput & Smith-Doerr, 1996; Hardy, Phillips & Lawrence, 2003). Based on the identified literature gap and lacking clarity about contemporary dynamics and tensions between highly diverse partners in collaborative projects for SI, the following research question arises:

What are the challenges that arise in cross-sector collaboration for social innovation? In the pursuit of answering this research question, the objectives of this study are as follows.

Firstly, the findings can help organizations to better understand the dynamics of collaboration in the context of social innovation, which is characterized by challenging partnerships across sectors and becoming increasingly important to be supported by new studies. The results of the analysis thereby provide clarification on the problems that can occur in these endeavors and serve as a basis for steps towards more efficiency, hence facilitating the successful collaboration for SI projects in conjunction with diverse partners from other sectors and locations.

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and complicating factors of collaboration for SI will be extracted and comprehensively structured, which responds to the need for information on social innovation to expand the currently sporadic theoretical grounds compared to other fields of innovation research (Nicholls, Simon, Gabriel & Whelan, 2015; Borges, Soares & Dandolini, 2016).

Thirdly, the Agency Theory will be challenged in its static view on principal-agent constellations to provide a realistic depiction of the dynamics in cross-sector collaborations for social innovation, based on the analysis of the gathered data. Applying this theory is valuable as it helps understand how SI collaborations are structured, which allows to bring the pain points and challenges to light that arise when diverse organizations team up to tackle highly complex issues that will deeply impact the everyday lives of society.

To fulfill the purpose of this study, the following structure is given. At first, a literature review will provide an understanding of collaboration for SI and the Agency Theory. Afterwards, the methodology will be outlined in detail to enable subsequent researchers to follow the chosen steps and replicate the study design. The insights from a total of ten conducted expert interviews will be presented in the results section, followed by a discussion and the formulation of propositions. In the end, implications, limitations, directions for future research and a conclusion will close the paper.

2. Literature Review

This section provides an overview of the existing literature and presents the theory used in this research. The literature review is divided into three parts: The first part is concerned with the focal and emerging topic of collaboration for SI, a combination of the separate research streams collaboration for innovation and social innovation. Afterwards, the second part outlines the Agency Theory as the theoretical basis of the study, as well as the concept of the theory that will be challenged and further explored. Lastly, there is a section on the role dynamics in collaborative projects for SI, where it will be introduced how the theory will be applied to the topic.

2.1. Collaboration for Social Innovation

“Social innovation is not new, but it appears to be entering a new phase – (...) offering solutions not just to localised problems but to more systemic and structural issues.”

(Nicholls, Simon, Gabriel & Whelan, 2015)

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will follow the definition of the emerging concept of SI as “a novel solution to a social problem that is more effective, efficient, sustainable, or just than existing solutions and for which the value created accrues primarily to society as a whole rather than private individuals”, by Phills, Deiglmeier & Miller (2008). Extending the core definition, social innovations approach certain societal issues on a wider scope than solely technological innovations aim to do and often demand the resources and knowledge bases from different parties (Moulaert, Mehmood, MacCallum & Leubolt, 2017). As a result, traditional boundaries of geographic locations, economic sectors and even cultures have to be transcended (Moulaert, 2013) in order to gather the required assets and achieve synergies, as well as complementarities. This has been further argued by Murray, Caulier-Grice & Mulgan (2010), who state that SI “doesn’t have fixed boundaries: it happens in all sectors, public, non-profit and private” and therefore excels organizational limits across sectors.

Here, a clear distinction has to be made, as there are terms such as social entrepreneurship and social enterprise that are often used in a similar context and partly even used as synonyms for social innovation. However, while the aforementioned two originate from the nonprofit sector and do not take public and for-profit organizations into consideration, social innovation thrives in the successful interplay of all three sectors (Light, 2006; Phills, Deglmeier & Miller, 2008). Howaldt & Schwarz (2010) further outline SI as the combined practices of a constellation of actors towards the goal of answering to social needs and problems in a manner that is more effective than established ways. In other words, the combined practices can be described as different working approaches, which need to be arranged in a well-functioning way (Van der Have & Rubalcaba, 2016).

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Despite the increasing importance due to environmental and social issues that need to be addressed, literature on social innovation is scarce and fragmented. Because of that, researchers still need to draw from general collaboration theory, which naturally has overlapping aspects with collaboration for SI, but does not cover its entirety and the complexity that it entails. Furthermore, the overarching goal of approaching large-scope issues of society and the environment are what sets SI apart from general efforts for innovation. This scope calls for partner diversity and work across sectors, as the different expertises are not only favorable but necessary for SI and result in new ideas to tackle social issues, as well as make novel solutions possible in the first place (Hardy, Phillips & Lawrence, 2003; Powell). Therefore, there are valuable grounds to explore the topic empirically and shed light on collaborative projects for SI, thereby contributing to this nascent stream of literature by uncovering the dynamics and gathering information on the challenges SI projects imply.

2.2. Agency Theory

In order to illustrate the challenges that diverse organizations encounter when collaborating for social innovation, the Agency Theory will serve as a theoretical basis for this research. Originally, the Agency Theory has been developed during the 1960s and 1970s to address risk sharing between groups (Eisenhardt, 1989; e.g. Wilson, 1968; Arrow, 1971). In its essence, it postulates that agency relationships consist of a collaborative effort between the principal and the agent, while the number of involved parties can vary. The relationship is contractual in nature and characterized by a principal who is “delegating some decision-making authority to the agent” (Jensen & Meckling, 1976). While this can be beneficial, it also gives the agent the power to pursue own goals, which often diverge from the overall objective. Agent and principal can also differ in their perception of what is best for the project or organization (Wiseman, Cuevas _{-Rodríguez & Gomez-Mejia, 2012). These discrepancies} can substantially harm both the project and the principal. Ergo, the relationships are often subject to conflicts and so-called agency problems, arising from diverging goals and objectives, information asymmetries and differences in risk aversion between the involved parties (Eisenhardt, 1989; Jensen & Meckling, 1976; Ross, 1973; Hung, 1998; Shankman, 1999). Agency Theory thus addresses the different preferences that participants hold towards the collaboration and subsequent issues that need to be solved, as they can otherwise lead to tensions and obstacles in the process.

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broadening the focus to different kinds of relationships (Harris & Raviv, 1978). The focus here is placed on finding the optimal contract for the collaboration or relationship under consideration of the “varying levels of outcome uncertainty, risk aversion, information” (Eisenhardt, 1989).

These aforementioned challenges posed by questions of governance, diverging objectives among the parties and others, make an application onto collaboration for social innovation promising. While the Agency Theory in the traditional sense pictures the collaborative relationships in a static way, where one principal delegates tasks and power to the agent, this thinking has not been investigated in the context of SI yet. As collaborative projects for SI involve multiple entirely diverse partners from different countries and sectors with various organizational forms, sizes and working approaches, it is valuable to examine what the dynamics look like in these endeavors. It needs to be observed whether the static agency view is still adequate for contemporary collaborative relationships for SI, or if other dynamics are anchored in the project structures, when governments, industry partners, research institutes, charities and others are brought together. The application in this context is particularly important, as these diverse organizations come together for a project scope, purpose and outcome that exceeds that of other kinds of innovations, where the impact on society is limited.

Regarding the collaboration for social innovation, the Agency Theory therefore serves as an interesting framework due to the fact that it deals with the exact problems that arise when organizations marked by diversity in various regards come together to collaborate (Jensen & Meckling, 1976), which is an examination that is still missing in extant literature. Therefore, the topic of this research will be elaborated upon this theoretical foundation in the following sections.

2.3. Role Dynamics in Collaboration for SI

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past perceptions. According to Nicholls & Murdock (2012), “a model of SI requires a model of creative and autonomous agents who themselves contain models of the system within which they act”. It is implied that the exploration of large-scale projects such as collaborations for SI require a deviation from traditional perspectives, that were directed at lower-scale innovation projects without a primary social intention, onto more flexible ones that correspond to contemporary dynamics.

Hence, it has been claimed that collaboration theory is insufficient in its ability to accurately explain the collaborative processes or governance structures in more complex projects, where many and diverse actors are involved (Westley & Vredenburg, 1997; Selsky & Parker, 2005). The study that comes closest to suggesting an alternative principal function has been published by Trist (1983), who found a positive impact on collaboration with one party taking on a guiding function, which he coined as the referent organization. According to his research, it entails functions such as the regulation of values and the subsequent deduction of established objectives (Trist, 1983). This could alleviate the proposed negative effects of diverging objectives and goal conflicts on the joint endeavor. Furthermore, it is concerned with the sharing of information by facilitating the necessary infrastructure (Trist, 1983), thereby potentially reducing the level of discrepancy in information bases. Lastly, the referent organization works out a mutually desired future with the fellow organizations (Trist, 1983), which can moderate risk aversion in the sense that perceived risks by an involved party become pacified. Altogether, this approach could be highly suitable for SI projects, as it complements the prior statement by Nicholls & Murdock (2012) in that the adjusted principal ensures the needed structures, but still allows the organizations to maintain a degree of autonomy to make decisions and take actions. Examining SI through this lens can therefore contribute to the SI literature by observing principal-agent dynamics that either support or hamper the complex collaborative projects for SI between highly diverse partners for a social cause.

3. Methodology

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projects for SI and witnessed the problems they bring about. Likewise, it is highly valuable to analyze the statements provided by the interview partners on their perceived challenges in collaborative projects for the development and implementation of SI.

3.1. Research Setting

In the fragmented research field of collaboration for social innovation, it is highly important to gather information on the overall topic from experts with extensive knowledge from different organizations. Examples here are research institutes specialized in social innovation and innovation foundations with a social orientation. Due to the wide spectrum of social innovation, however, it was decided to choose one related field as a leitmotif and thereby provide a practical illustration of the relevance and application of SI. Given the contemporary disrupting impact on society, governments, industries and research, the interface of mobility and energy has been chosen as an exemplary field that requires collaboration across sectors. It was strived to provide insights on as many relevant perspectives as possible and avoid selection bias, due to the fact that a mere focus on one of the involved parties in this complex environment of SI, e.g. only car manufacturers or SI experts, would present a one sided point of view while neglecting others. Examples of the interviewed parties, therefore, include individuals from research institutes directed towards mobility and energy, manufacturers and service providers for energy and advanced mobility infrastructure, consultants, as well as a collaboration design expert. The research hence encompasses various actors and made it possible to examine different perceptions of social innovation, as well as the opportunities and challenges of collaborating with diverse, relevant parties on the path to synergetic partnerships.

3.2. Selection of Participants

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Eventually, a total of ten experts could be recruited for the research, which are enlisted below in Table 1 with their organization, the role of the given organization within the field of social innovation and further details for each of the interviews. Out of the respondents (R), interview partner R1 chose to stay fully anonymous, the corresponding information on the organization and position are not revealed in the overview.

As the goal was to have insightful conversations with experts from SI in general, plus mobility and energy, it was avoided to set strict limitations on their geographical location and to only consider individuals from a certain hierarchical level. Therefore, experts from a variety of locations have taken part in this study, precisely from Australia, Austria, Germany, the Netherlands and the United Kingdom. In order to ensure greater accuracy, the interviews were conducted in the expert’s mother tongue, where possible. Hence, 70% of the interviews were held in German and the remaining 30% in English. The table gives further information on the sectoral affiliation and funding sources.

Table 1: List of Interview Respondents

3.3. Data Collection

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Therefore, interviews with selected experts have been conducted in order to collect primary data on the focal topic. The reason is that the given lack of information calls for participants that have experience with collaborative projects for SI, as they are capable of sharing insights on potential conflicts and tensions they encountered. In the course of the study, the theory developing approach by Eisenhardt (1989) will be followed. The selected experts were asked questions in semi-structured interviews, as they provide room for flexible reactions and a fluid conversation. Moreover, this approach of interacting with experts provides a strong connection to practice, as the insights are contributed from experienced individuals who have been working in the area and industry for years and built up a valuable expertise. According to Glaser & Strauss (1967) this practical orientation throughout the theory building process facilitates theory testing at a later stage in research that follows. In total, ten phone interviews have been conducted with R&D project managers, experts on mobility and energy, as well as experts on social innovation overall. Resulting in a total of 447 minutes of dialogue, the interviews with individuals from highly diverse organizations involved in SI provide numerous insights into the observed topic. Lastly, all interviews were audio recorded with the consent of each of the interview partners and transcribed afterwards, to avoid unnecessary distractions during the conversation (McCracken, 1988).

3.4. Data Analysis

Following the guiding method of Eisenhardt (1989), the first step was thoroughly reading and coding the interview transcripts one by one. For this matter, the ATLAS.ti software was used, which is a computer-assisted tool that facilitates researchers in analyzing large bodies of text. Therefore, it was highly useful for this task and enabled the following step as well, which is to compare the data of each interview in order to find patterns between them and provide the basis for subsequent interpretations. This was a highly iterative process of going through all the transcripts multiple times to grasp the connections or contradictions between the findings and letting thematic categories emerge, while simultaneously resulting in a high familiarity with each of the interviews and the respective contents (Edmondson & McManus, 2007). Figure 1 on the following page depicts the final categories as a result from the coding process, which serves as the framework to structure the results section at a later point.

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Figure 1: Coding Scheme

4. Results

In the following section, the relevant findings from the data analysis will be presented. First, the interviewee’s definitions of social innovation will be outlined. Afterwards, the reasons for collaborating for social innovation projects with diverse organizations will be described, to show the perceived benefits they anticipate in these endeavors. Then, the gathered insights on the challenges of collaboration for SI will be presented. As the interviewees emphasized the key aspects that are important to be considered in dealing with the challenges, these will be listed in the last step.

4.1. Social Innovation: Definition and Characteristics

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R Interviewee’s definition Essence

1 “What I see is a more general trend [...] from a vertical hierarchical organization to a more horizontal and social innovative approach to things like energy”

Horizontal approach

2 “Putting technology on the road is one thing. To bring an autonomous vehicle on the road that drives, that is foreseeable to realize. What is very exciting is the awareness of people to deal with this technology. [...] It requires a change in thinking that is at least as challenging as the technology itself”

Change in thinking

3 “So we see social innovation as a process as well as an outcome. [...] There is usually a lot of beneficiary activity involved in the innovation

development program, and then also the values of openness, transparency, iteration, learning [...]”

Beneficiary activity

4 “[...] it is helping to bring about change that supports the people in our society who need it the most. It is those difficult, those really hard to solve issues where [...] usually it is not one organization that can solve the problem on their own, it usually requires collaboration across the system”

Collaboration across the system

5 “That is not a term I would generally use. I am dealing with the

development of the legal framework and I think that it is very relevant for what you mean by social innovation, because in a modern complex society like ours, many of the societal processes are legally written down, hence the further development of societal processes is highly dependent on the development of the legal framework”

Legal basis of the modern complex society

6 “New, refined social practices, which serve to address certain needs for certain target groups better than old target groups and these practices are actually accepted by the people concerned

”

Societal needs and acceptance 7 “For me, social innovation is basically an aspect when participation formats

are primarily also involved in certain processes, i.e. when an innovation is not only technology-driven, but also socio-politically driven and a change process is triggered”

Change process and sociopolitical context

8 “The term is of course very elastic, but for me the point of reference in my perspective is most likely to be on topics such as car sharing, an innovation that benefits the general public but is also likely to generate profit. [...] And where then companies have to work together that might otherwise be more likely to be enemies”

Beneficiary activity Competitor collaboration

9 “It may be that one city is very innovative and another is normal. [...] you sometimes have to define that a little bit flexibly [...]. Then learning processes come in, where you can learn from each other”

Learning

10 “Innovations that can take place at various levels. The core of the work is that it benefits a certain class in society [...]. It can be a technology, it can be a product that makes the lives of several people easier, but it can also be a behavior that has changed through an innovation that has taken place”

Beneficiary activity Behavioral changes

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As they are the key receivers, society is relevant for SI yet in another regard, which is acceptance. Their awareness and acceptance of e.g. the new technology that shifts prior behaviors is essential after a successful implementation in the final step (R2). The reason is that while it is indeed challenging to develop and introduce new technologies, such as autonomous driving, it is an additional challenge to achieve that the members of the society are aware of the new technology, accept it and change both their mindsets and habits by leaving the vehicles with ICEs that they have been used to behind (R2).

While the majority of interviewees agreed on the main focus and meaning of social innovation and its purpose, the diversity of interview partners resulted in additional insights that show the bandwidth of what it entails. Expert R5 pointed out the complex character of modern society. In that context, it has been found that social innovations, due to their scope and impact on civil society, businesses and governments, often require adjustments or extensions to the legal framework of the respective country. Likewise, the initiation of change processes that lead to social innovation, for instance in the course of the energy transition, needs these extensions in the first place, as the legal framework then allows and facilitates the implementation of novel, disrupting movements (R5). The change processes are henceforth socio-politically driven, instead of the usual case of solely technologically-driven innovations (R7). Therefore, social innovation as a response to large issues cannot be developed by one organization and _{“usually requires collaboration across the system” (R4)}.

4.2. Reasons to Collaborate for Social Innovation

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“[...] to really establish such a system [the electrification of heavy goods vehicles] you just need an incredible number of partners. And you are always confronted with problems that you cannot research on your own” (R5).

Hence, a substantial benefit is the possibility to gain insights into a variety of sectoral levels and simultaneously learn about the functioning and solution approaches of scientific institutions, as well as the research and development departments of businesses (R10). In other words, you come up with different, new ways to tackle a certain problem (R3). More specifically, _{“if you have a whole} bunch of charities in a room [...] you'll run a campaign, run a fundraiser, but if you're doing cross-sector stuff you'll probably do those things but also [...] run an event, or develop a new business model, there is all sorts of things that might come out of it” (R3) . Therefore, the conjunction and the interfaces of these inputs in cross-sector collaboration subsequently offer ample room for novel solutions that can transform current behaviors to the better and offer benefits to the members of the society.

User participation. _{As social innovations are directed towards societal issues and}

environmental ones that affect civil society, the data shows an increasing benefit in involving the ultimate users, so civilians, into the development process (R1, R3, R6, R7). In fact, it has been found that they can take on different roles in the collaborative social innovation project. Firstly, it was pointed out that in the energy field so called cooperatives or commons economies are emerging, which results in a collaboration between civilians and energy providers, for instance (R1). Here, they are increasingly powerful and create a bottom-up approach to address their own needs, which automatically involves the corresponding industry partners and can reach a degree where it is necessary that the government joins the conversation to design a well-functioning system (R1). Secondly, user participation is also crucial in a more passive role, where their input and the user experience are taken into account when developing a social innovation. According to another expert, SI projects entail _{“participation from all levels, usually includes some kind of user experience, for} example if you are trying to develop an innovation for a hospital, in some social innovation they might just use medical professionals, but for us [...] if the ultimate user is the patient, then we should also include patients” (R3). This argument is linked back to the acceptance factor of social innovation that was mentioned in section 4.1.

“If you want such innovations to be accepted or such ideas to be accepted in order to attract innovation, i.e. to actually come into use, then you really have to work much more with the users, with the potential users, and I find that much more exciting than just sitting in an ivory tower” (R6).

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new technologies that disrupt these habits and demand acceptance need to be delivered well. Because of that, users are becoming more and more involved in the process of developing SI, for instance in citizen workshops or exhibitions (R7). Thereby, possible misunderstandings can be cleared up and a platform is created where citizens are both included and directly asked for their input, which enables a valuable exchange between the society, research institutes and industry partners, and fosters acceptance on the side of the users in the best case (R7). A specific output of this constellation, according to expert R7, is a consultory concept for the government on participation processes to improve user involvement, in that course also acceptance processes, and lastly create and implement a social innovation successfully.

Efficiency.

“The way I try to get people to visualize it is, I am not sure if you heard of the saying to eat the elephant you start with one bite [...]. It is so big to be eaten, [...] you need to start with one bite. I talk about it and I say if the elephant is our big problem and you want to eat it fast, you need people biting from different parts [...] and if we all keep eating, eventually the elephant will be eaten. It is thinking about the system like that” (R3).

The upper statement and the included metaphor show how the collaborative approach on social innovation is essential due to the actual size of SI endeavors. While collaboration for innovation in general is already well-known for the benefit of shared costs and risks, as well as the amount and quality of resources that adds to scale at the same time, this advantage is found to be particularly beneficial when it comes to social innovation (R3). As each organization from its respective sector brings a certain expertise into the collaboration that others do not possess, a large social or environmental problem becomes tackled from different sides who each make use of their knowledge and skills. In the case of mobility and energy, it is therefore significantly driving the progress when research institutes, industry partners, foundations, governmental ministries and others join the process to work on joint solutions (R2, R3, R4, R5, R7).

4.3. The Main Challenges in Collaboration for Social Innovation

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going to exactly be” (R3) . Structures are ill-defined and often there has not been a reference point from the past yet which could ease these uncertainties.

“It is complex because it is hard because it is important. In my mind, anyone can sell more stuff to someone, make a new ice cream and sell it [...] but that is not that complex, it is just working out what flavour is really good, making it nice, trying it on a few people. This stuff is really hard, because it does include a lot of people and people are humans in organizations with cultures, and the problems are intractable because they are big problems that haven't been solved by others before” (R3).

Another factor contributing to the uncertainty according to the interviewees is that people in SI projects tend to be insecure about whether or not they are doing a good job, as they cannot measure their performance the way they are used to, with clear responsibilities and corresponding accomplishments, so _{“there is so much complexity with that just on the individual level, let alone on} the organizational level” (R3). Furthermore, uncertainty manifests itself in the often unknown leadership, meaning which party is in charge of whom, and who should be involved in the first place (R3, R8). The latter is most uncertain in the commencing phases of the project, as it has to be determined which competencies are needed. Expert R8 confirmed that the know-how from partners, whether they be development service providers or start ups, is highly relevant, but how that happens and whose expertise is required reflects a tremendous challenge for organizations and will further be outlined in the following section.

Partner selection. In the mobility area, contrary to common belief, there are more actors that need to be involved than merely the car manufacturers for the technical innovations. In addition to their engagement, it was found that social innovations often require adjustments or entire extensions to the legal framework to realize systemic changes for society (R5). Additionally, both political and economic decision makers as well as the public are involved in huge shifts in the system, which will only be accomplished with the final step of societal acceptance. Therefore, it has to be examined beforehand who the actors are, what the constellations look like and to set clear boundaries on the endeavor in order to use the resources and know-how specifically for the given cause and avoid drifting off to other emerging fields (R5, R7, R10). Expert R5 contributed the following statement to provide an extract of the entities that need to be involved in the course of energy and mobility transitions to develop and eventually implement an electric grid for trucks on German highways:

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highway and suddenly at one point suck the electricity and put a load on the network. These are questions that they can't figure out without really involving companies that have expertise” (R5).

The quote gives an insight into the challenge that is selecting the right partners for the collaboration for SI. It shows that firstly, there is a high number of organizations whose general involvement is required, and secondly, that these significantly vary in their sectoral affiliation, expertise and hence the contribution they make to the partnership.

Two other interview partners stressed that in the partner selection for social innovation projects, it is crucial to look for the so called _{“unusual suspects” (R3)}. These are usually not the most obvious collaboration partners and might _{“understand very little about each other's business, but} everyone is still in the project because they are working on an essential aspect of the project and overall it is then harmonious and balanced” (R10) . Finding the unusual suspects highly depends on the question the social innovators are asking themselves. According to expert R3, you get a certain group of people who are most likely directly related to cars when asking what the future of the automobile in Germany is going to be, but a very different group of higher variety resulting from the question of what the future of transportation or mobility is going to be (R3).

Hence, partner selection in social innovation is challenging due to the unknown organizations that might contribute substantially to the project, which have yet to be uncovered with the right questions and an open mindset.

Organizational diversity. _{The data clearly displays the differences between the collaborating}

organizations for SI as the biggest challenge they are facing. This diversity has been identified on multiple levels in the experience of the interview partners and will be outlined in the following sections.

Goal divergence.The mismatch between the objectives that collaborating organizations bring

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“It rarely fits together. Of course, everyone has their own specific interests and they only partially coincide. At the end of the day, an e-highway or an electric road system is not built out of friendliness in the first place, but because he expects a specific advantage for his company. They are also employees who are all paid by their company, I am paid by my company, and because we are a research institute, I have an interest in taking as much knowledge as possible out of it. At the same time as an NGO [with] climate protection in the name, I try to have projects in which this plays a role so that they can take the issue forward” (R5).

Apart from that, data shows that goal divergence reaches a risky point when two direct market competitors are engaging in collaborative sessions and projects with others in order to drive the developments in the mobility field, where a number of disruptive technologies is transforming the prior status quo. For instance, _{“it is hard to imagine even more contradictory interests than those of} Siemens and Alstom, direct competitors who are sitting in a workshop and develop standards together for their technologies” (R5). However, developing social innovation in this context requires their respective expertise in order to develop novel solutions, so on the one hand, they are interested in what the other company is working on in the standardization group, while simultaneously they refrain from making it simple for the competitor and hence tend to set high standards (R5). There is henceforth a consensus among the experts regarding the existence of deviating or even conflicting goals, which results in a significant challenge for collaborators in SI projects in bringing them together and creating a focus on the common project goal.

Project pace and time frame. Organizations collaborating for SI have further been found to

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Decision making.The aforementioned challenges due to goal divergence are directly linked to problems resulting from limited decision rights of the involved person representing his or her organization. According to the data, it needs to be taken into account that _{“members who work in the} economic sector are of course often bound by the respective decisions of top management” (R5) . In addition to that, R5 stated that this conveys the jeopardizing possibility that processes get cut off before they have really been initiated, if decision-making is bounded by other individuals that are not on site. Other experts agreed, stating that _{“often in our processes it is really important that people} have the mandate or the permission to take part” (R3) , to avoid that meetings contain talking periods only, without being able to make decisions that would drive the project to the next step.

Overall, the questions of who is deciding on a certain matter and how particular decisions are going to be made are recurring in projects for SI (R3). Nevertheless, R3 argued that big companies, for instance, who are relatively slow at decisions still need to be integrated due to the value they contribute, which is why the challenge of decision-making is omnipresent and needs to be taken into consideration when designing the SI program.

Geographical distance. The interviews further display a clear obstacle to the collaboration due

to the different cities or even countries the partnering organizations are located in. According to expert N8, the sheer distance to a major car manufacturer brings challenges with it, as the probability that the needed innovators are located in the manufacturer’s close surroundings such as Wolfsburg or Sindelfingen is low. Further, the interview partner could _{“only say from experience that for many it is} totally difficult to work together across distances” (R8). This has been further confirmed by other experts, showing that collaboration for SI mostly works in long-distance partnerships, which hinder the work flow and additionally, _{“there is always the possibility for misunderstandings” (R9)} , which is further outlined in the following quote:

“In our work, where [...] we work a lot at a distance, we meet face-to-face only every six months. [...] you can't do it [more often], everyone has their work in their own town and then we have two to three days together, trying to discuss everything that needs to be discussed and sometimes you find that two different partners were thinking in two different directions or just misunderstood each other. Then you have to take a step back and look at things again” (R9).

The collaboration across sectors hence challenges the involved parties in the sense that the mere geographical distance between them complicates working and communicating with each other, while simultaneously causing misunderstandings which can delay important decision making and require them to make time-intensive clarifications in order to move forward again (R9).

Financial endowment. In the context of collaboration for SI, involved organizations evidently

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engagement in the project. In fact, _{“a lot of those organizations are underfunded and they do not have} a lot of spare time to [...] work on things” (R4) . In case an organization is depending on external parties for funding, collaboration for social innovation can be blocked before it even gets started. For instance, expert R4 recalled a conversation with a youth-based organization about plans to collaborate more closely together, whereas_{“the first question their boss asked was 'Does she have any money?'”} (R4). Likewise, it has been pointed out by another interviewee that _{“you can cooperate with an} institution that really obviously has a problem, but if it [...] cannot be financed for some reason or is not politically opportune, then you really cannot continue with it with your best intentions” (R6).

The political aspect related to monetary funding is particularly a challenge for research institutes that do not possess any basic funding and are thereupon reliant on the European Union, for instance, to approve research proposals and provide them with funding to pursue an innovative research project (R5, R6, R7, R8, R10). Moreover, in projects involving third countries, small companies or startup sized firms, financial resources can become a significant problem where dependency on external funding is high and critical (R10). Within the aforementioned research campus Mobility2Grid, 15 out of 35 partners in the consortium receive funding. Next to the responsibilities to their respective partners within the collaborative SI project, they also have to fulfill certain milestones based on their granted research application (R7, R10).

“Money makes things easier, i.e. when the project partners, and here I mean really multidimensional so from the research organisation to the implementers and the beneficiaries, if they are contractually bound to each other and also receive money for their services, then it is easier to do so than when e.g. in a research project only the research institution receives the money, but is nevertheless dependent on the input of [other] institutions” (R6).

The data has therefore shown that organizations differ in their financial resources in terms of the origin and consequences for their research efforts. While for instance businesses can finance their own undertakings as they possess the required money, other organizations such as research institutions are bound to external funding which influences firstly their ability to take part in collaborative projects for SI and secondly their actual work and contributions to the partnership.

Communication. _{The matter of communication between the organizations collaborating for} SI, framed in a challenging context, has been elaborated upon by interview partners 3, 4, 7, 8, 9 and 10, which reflects its importance in the eyes of the experts.

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An illustrative example has been provided by another interviewee, whose organization has partners in 15 different cities or countries from all over Europe. Accordingly, they are facing the challenge of ensuring a common understanding of what they are all part of and coordinating each other, where it is difficult to know when to communicate what to whom (R9). In combination with the geographical distance that has been dealt with before, communication is hence an additional challenging component in the context of collaboration for SI. It has further been stated that it is hard to know the questions you need to ask your partners in order to keep driving the project, as a constant flow of communication is complicated to be upheld among these diverse organizations, across sectors and at different locations (R9). In this sense, communication is required to _{“always create a certain} transparency, so that everyone knows what is happening. When the projects are running and everyone is active in his or her area, it is often the case that one no longer looks left and right” (R7).

Moreover, the data indicates that communication can be a challenge yet in another regard. “Particularly in the beginning, for example with governments, people often don't want to talk honestly, or they don't necessarily want to share what is going on when government representatives are in the room” (R3), which indicates an obstacle in the flow of information due to the presence of a certain organization. The precise reasons are not given, however, as they demand a sufficient degree of contextual explanation of the involved organizations and the SI project as such.

Communication has furthermore been found as challenging in combination with the level of trust between the collaborating organizations. Exchange of crucial information becomes hindered because _{“when you have a problem and you work with people you can’t really trust, you probably} won’t tell them about the problem and it will only get worse” (R9) . Because of that, communication is essential to reduce the risk of costly failure (R4). Without proper communication, the actual problem might not become addressed and other issues that are not as urgent are dealt with instead (R4).

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4.4. Key Factors to Alleviate the Challenges of Collaborating for SI

While gathering data on the main challenges that have been presented in the prior section, the interview partners have also given plenty of insights on what they perceive as important and helpful in dealing with these difficulties and tensions. They result in the formation of four pillars that embody the key factors facilitating cooperation in SI projects, which are depicted below in Table 3.

Factor Description Quote example

Coordinative leadership

Alleviates challenges through redirection towards the shared vision and coordination of the diverse parties.

“There must indeed be a project manager or leader. It is important to have someone who pushes it all forward and brings people together because [...] everyone does his thing in his office, in his city, in his country, but somebody has to hold up the vision 'that's the direction we are working towards together” (R9).

Reciprocity Alleviates challenges through a mutual exchange of resources and information that facilitates participation, commitment and drives collaboration for SI.

“If we were just asking for information and we were not doing anything, then I think people would stop giving out information. You have got to see reciprocity in any of these” (R3).

Trust Alleviates challenges through lower barriers to honesty that facilitate problem-solving and information exchange.

“Often they will start feeling more risk averse and then as time goes on and people learn to trust each other as they see progress, as they see success [...], their risk appetite will change. You can see that over a period of a project” (R3).

Communication Alleviates challenges through the facilitation of information sharing and maintenance of a common understanding of the goals and progresses.

“You have to communicate a lot, that is certainly a very important characteristic [...]. You need the ability to deal with very different people and therefore different roles that the other needs, sometimes you're the one who supervises, sometimes you're the one who encourages, sometimes you're the one who communicates something on a very friendly level“ (R10).

Table 3: Factors Alleviating the Challenges of Collaborating for SI

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who strive to create a behavior-changing innovation for the society. According to the data, if you then have one of the parties acting as a delegating principal, _{“there is probably not much innovation in} there, right, like if it is just me as an NGO in the center telling people what to do. You are probably not going to come up with new stuff” (R3) . Additionally, it has been pointed out that _“obviously everything is going to happen to their agenda. They may not really understand what everybody else wants or needs” (R4) , which implies a new understanding of power is needed in the face of modern and more complex structures.

Indeed, multiple interviewees stated from their experience that the classic principal-agent model is not applicable to the contemporary dynamics as in collaborative projects for social innovation (R3, R4, R5, R6, R7). Instead, involved parties rather offer to take on a certain task and the concomitant responsibility, which is why _{“there has not been power given to them by someone else,} but it also has not been taken away. That kind of very clear role definition and power transfer is not really appropriate for this” (R3). In addition to that, the interviewee stated that in their experience at an innovation foundation working with businesses and governmental institutions, among others, a certain leadership might be existent, but not as fixed and defined as in the perception of the Agency Theory, as it can move on to someone else depending on what is needed at the moment. Hence, it indicates that the diversity in cross-sector collaborations for SI calls for a more flexible view on the roles and meanings of principals and agents. In the case of research institutions, this type of project-based work is too dynamic for these roles to emerge (R6) and who is in charge depends on what is currently going on in the project phase (R7).

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rather to drive the development, mobilize the collaborating parties towards the common goal and communicate the shared vision transparently and continuously (R6, R9). Therefore, a coordinative principal in a less static sense is important to keep the vision alive, manage the overall interactions among the parties and provides guidance in cases where problems arise, to avoid the project from dissolving or losing its purpose (R9, R10).

Reciprocity. The challenges of collaboration for SI can further be addressed by ensuring a mutual benefit for the involved parties, both before the partnership is fully established and when the project is already running (R3, R4, R5, R7). According to the data, _{“if you want someone to} collaborate with you, there has to be something in it for them. You need to show them that they are going to get something from it often, because, you know, everyone is busy doing their own thing” (R4) . Particularly in SI projects where the organizations are so diverse that they do not always comprehend the others’ businesses, it is crucial to preserve harmony and drive collaboration by ensuring that the added value for each of the participants is clear (R10). In the example of a stakeholder workshop with competing industry partners, this added value of the social innovation goal needs to be communicated properly, to address the respective interests and achieve that relevant organizations agree to participate (R5). Then, when the collaboration is established, additional organizations that have found the SI project to be so promising that they want to join need to be evaluated first with regard to the contribution they can make to the overall partnership (R7). Otherwise, an expert stated, _{“if we were} just asking for information and we were not doing anything, then I think people would stop giving out information. You have got to see reciprocity in any of these” (R3) . Hence, cross-sector collaboration for SI needs to be carried out under continuous sharing of valuable, complementary information in order to assure that all partners contribute to the common goal of developing and implementing the given social innovation.

Trust. _{The importance and positive impact of trust on collaborative relationships is} particularly striking in SI projects due to their diverse, uncertain and complex nature. As presented in Table 3, a long-term orientation in the partnership builds up the needed trust between the collaborating parties, which then leads to a reduction in risk-aversion and an increase in commitment to the project (R3). Before entering a cross-sector project, the organizations are not likely to have worked together beforehand, which naturally creates a degree of distance before they get to know each other’s working approaches, characteristics and competencies (R10).

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Therefore, trust is a crucial component in collaborative projects for SI, as it facilitates the strongly needed information exchange and the actual willingness to make valuable contributions to the partnership by being open, instead of only collecting the knowledge from the cross-sectoral partners that they would not be able to gather without entering the project.

Communication. Lastly, the final pillar that has repeatedly been named as a pivotal force in driving the collaborative project for SI is a continuous flow of information between the involved parties. After being outlined as a challenge in multiple regards in section 4.3, it plays an alleviating role at the same time. It is firstly a matter of preserving transparency across the collaboration to ensure that all the involved organizations, despite their heterogeneity in expertise, location and sectoral affiliation, are familiar with the current progress in the project and share a common understanding (R7).

“To vibrate in unison, to speak the same language, to use the same processes and also programs in part, that is always a huge issue in terms of systems and data technology, that is already a very, very big challenge, also culturally” (R8).

As stated in the previous quote, this communication problem is of cultural but also technical nature and needs to be taken care of on a regular basis. Therefore, by maintaining an overall comprehension of the processes and each other’s inputs, it can be made sure that the collaborating partners are on the same track towards the shared vision of SI and are not stifled by obstacles in this sense (R9). The importance of this pillar is further emphasized through expert R10, who stated that communication and management strategies are usually written down in documents beforehand and distributed to all the partners to lower the risk of problems in this area in the first place.

Therefore, communication is a problematic element that should not be taken lightly and needs thorough consideration and preparation for all involved parties, so that in the end, their collaboration is not stifled by these challenges and can be carried out more smoothly.

5. Discussion

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distinct intensity of the challenges. Afterwards, theoretical and practical implications will be presented, followed by limitations and directions for future research.

5.1. Interpretation of the Findings

Firstly, the results show that social innovation projects encompass a scope significantly larger than that of other types of innovation, for example solely technological, organizational or frugal ones, with the latter being rather incremental in nature (Krüger et al., 2018). Although the transformative processes do include economic and profit-oriented goals, social innovations are still primarily directed towards creating a benefit for society and realizing a systemic change (Reynolds, Gabriel & Heales, 2017). This induces a complexity of SI that is anchored in the spanning of boundaries across sectors and policy fields, which results in a high level of partner diversity and cross-sector collaboration. While collaboration is also crucial for other innovations, the aim to facilitate major systemic changes, such as a reduction in carbon within the society and economy by transforming consumer behavior and mindsets, creates a particular need to work across sectors for SI (Mulgan, 2007; Murray, Caulier-Grice & Mulgan, 2010).

Proposition 1: The level of cross-sector collaboration is higher for social innovation than

other types of innovation.

Secondly, the expert interviews showed a significant emergence of user participation in the field of SI, in which the actual consumers or general citizens are becoming more and more involved in SI projects. Their input has been identified as highly valuable for the development of social innovations, as they are ultimately the ones that should benefit from it. Further, they help understand needs, problems, patterns and trends better, co-develop solutions, or crowdsource solutions, as a source of new ideas and important divergent thinking (Davies & Simon, 2013). While they can take on different roles there, it has been found in 40% of evaluated SI initiatives, the users functioned as knowledge providers who gave feedback and engaged in testing phases, for instance (Howaldt, Kaletka & Schröder, 2016).

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industry, are not always as customer-driven as discontinuous innovation with a social purpose that induce truly systemic changes.

Proposition 2: The level of user participation is higher for social innovation than other types

of innovation.

Thirdly, among the challenges that arise in collaborative projects for social innovation is the uneven supply of financial resources. While there are often industry partners involved that possess large assets and are therefore able to finance their activities by themselves, SI projects also include research institutes that require to receive governmental funding, for instance from the European Union, after their research proposal has been approved. Therefore, “funding is still the main challenge [...], also due to the fact there is still no systemic support of social innovation compared with technological development environments”, where the organizations tend to have sufficient financial resources and do not depend on external sources (Howaldt et al., 2016). Other possibilities of funding, such as commercial investment funds or social banks, are still only emerging and did not unfold their full potential yet, which results in a higher struggle for social innovators to receive financial resources for their project (O’Sullivan et al., 2012).

Proposition 3: The problem of financial endowment is larger in collaboration for social

innovation than other types of innovation.

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is not possible or realistic in SI projects (Janssen, van der Voort & van Veenstra, 2015). The large power imbalances that exist in traditional Agency Theory would further exacerbate opportunistic behavior, which is why a more horizontal view on the partnerships and a guiding, coordinating party seem more functional and promising (Selsky & Parker, 2005).

Proposition 4: The level of complexity is higher in collaboration for social innovation than

other types of innovation.

Proposition 5: Collaboration for social innovation requires a more coordinative leadership

than other types of innovation.

5.2. Theoretical Implications

Due to the novelty of the selected topic, this study provides several contributions to the literature. Merging the two separate research streams of collaboration for innovation, which is a well-established and researched area, and social innovation, a currently emerging topic, adds valuable insights to the nascent field of collaboration for social innovation (Nicholls, Simon, Gabriel & Whelan, 2015. As the growing importance of this field has been displayed in the course of this study due to the societal and environmental issues of today and the future, it is valuable to explore it and collect primary data at this point in time. As soon as more studies have been conducted and a solid base of literature has been created, it will allow researchers to also apply quantitative methods to the field of social innovation and test the formulated propositions based on qualitative data.

Furthermore, the study gives a detailed overview of the challenges that occur in collaborative projects for SI, which need to be taken into account before entering these partnerships and throughout them. Despite the different organizational backgrounds that the interview partners come from and their sectoral affiliation, the analysis has resulted in clear, categories of challenges and also layers of these challenges, as in the case of organizational diversity, which includes multiple sub challenges for collaborating parties. Therefore, the results convey a high level of validity even though the sample is relatively small due to the boundaries of the research project and provide valuable insights that contribute to the scarce existent theory on the topic. It also shed light on the complex relationships and tensions that can result from them, fostering understanding of these issues, which will give helpful impulses to scholars taking up the matter of SI as an emerging area (Jensen & Meckling, 1976).

Collaboration for Social Innovation: The Dynamics and Challenges of Cross-Sector Projects

Master Thesis

MSc. BA Strategic Innovation Management