Playing chess or playing poker? Assessment of uncertainty propagation in open innovation projects

Abstract

Consider an interorganizational open innovation project, in which different organizations cooperate to generate value for clients or to solve a technological problem. In this setting, both the focal firm and the partners face uncertainties over time (e.g., technological uncertainties, market uncertainties) and, therefore, the performance of the focal firm and the overall interorganizational project depend on that firm's ability to assess potential uncertainties. The process of diffusion of a particular uncertainty throughout an inter-organizational project can be defined as uncertainty propagation. Assessment of uncertainty propagation can be employed to mitigate its detrimental impact. This paper connects previous studies of open innovation, uncertainty management and project management by providing a comprehensive, but structured, framework to assess uncertainty propagation. First, we propose the underlying causes of uncertainty propagation. Then, we present the three different approaches to its assessment, based on causes, effects and protection.