RESEARCH NEWS

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Who's Leading Now? Rethinking Leadership in Collaborative Innovation

MARKETING & SUPPLY CHAIN MANAGEMENT

Summary by Laura Bilbao, Director of Research & Outreach

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Who should lead when multiple organizations try to jointly develop a new product?

In traditional buyer–supplier projects, one organization, often the buyer or focal firm, is expected to take the lead. The logic is simple: a single leader helps prevent confusion and conflict. But as innovation becomes more complex and spreads across company boundaries, fixed leadership can also slow things down and limit the use of supplier expertise.

A new study by Dr. Tingting Yan, Ph.D., and a team of researchers offers a different view. It examines rotational leadership, where leadership shifts between the buyer and supplier at different stages of a project. The organization with the most relevant expertise, resources, or strategic stake takes the lead when its input matters most. Because suppliers often hold specialized knowledge that buyers do not have, this approach can speed up problem-solving and support innovation.

Still, shared leadership is not automatically beneficial. Buyers and suppliers may have different goals, incentives, and expectations. Without clear coordination, rotating leadership can create confusion, raise costs, and weaken trust.

Drawing on agency theory and role theory, and using both large-scale data and interviews, the researchers found a U-shaped relationship between rotational leadership and project performance. In plain terms: a small amount of shared leadership may hurt performance, especially when roles are unclear. But when rotational leadership is used more fully and supported by strong coordination, performance improves.

The study identifies two conditions that make rotational leadership more likely:

• Buyer willingness to accept risk: Buyers that are open to new governance approaches are more likely to share leadership. For example, an automotive buyer may accept more risk in an electric vehicle project because of its future growth potential.
• Supplier relationship-specific investment: Suppliers that invest in assets or processes tailored to the buyer signal commitment. For instance, a supplier might expand a facility to produce more single-speed transmissions for that buyer.

The study also highlights boundary buffering as crucial. Buyers must actively manage the boundaries between themselves and suppliers by setting safeguards, clarifying roles, and creating coordination processes. This helps reduce misunderstanding while preserving flexibility.

The key takeaway is that shared leadership is neither good nor bad on its own. Poorly structured rotation can disrupt performance, but well-managed rotational leadership can unlock the full value of supplier expertise in collaborative innovation.

Yan, T., C.Deng, Y.Wang, and S.Yin. 2025. “Taking Turns Leading? Rotational Leadership in New Product Development Projects With Supplier Involvement.” Journal of Operations Management71, no. 6: 851–879. https://doi.org/10.1002/joom.70000.

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