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Plan for Success in External Innovation

Posted by mdf4u on January 6, 2010

Among companies contemplating external innovation, I would offer the following unsolicited but simple advice:

If your company struggles with decision making involving products and technologies that are grown organically within its own four walls, it should expect to have even greater difficulty in successfully implementing an external innovation strategy.

A number of the companies I’ve worked with have shared with me their frustrations with corporate decision making.  Whether this involves R&D waiting for direction from marketing on what it wants to put on the product launch calendar so that it can interpret these needs into technical development criteria, deciding what and how much information is necessary to advance an initiative to the next stage in a stage gate process, or gaining internal alignment on the consumer test action standards necessary to pull the trigger on a product launch, companies can be flush with opportunities for internal gridlock. 

In the context of an external innovation collaboration add the further complexity of seeking to coordinate the activities of two companies (a technology provider and a technology seeker) that don’t necessarily know each other well, or trust each other, or have similar product development approaches and/or philosophies, and things can get even dicier.

The smart companies understand this implicitly.  One of my colleagues at a larger consumer products companies shared with me an insightful observation.  We were discussing success factors for external innovation within companies.  Paraphrasing, she said, “It’s important to remember that there are always 3 conversations going on:  the one between the people at your company, the one between the people at your partner’s company, and the one between you and your partner”.  

I’m not suggesting that companies seeking to pursue external innovation initiatives should have low success expectations.  However, success probability will be significantly enhanced by careful preparation.   Said differently, successful companies prepare for success.  With this in mind, companies should objectively acknowledge their process and cultural strengths and actively address existing weaknesses before they open the door for business in external innovations.


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