Among companies contemplating an external innovation aided product development strategy, you should expect and address negativity from the people most directly affected by the implementation of the strategy. This resistance may be covert, but it will very likely exist.
How to deal with it? Carefully.
Employee negativity can represent a substantial threat to the successful implementation of an external innovation strategy. Shrewd external partner selection can be as important to program success as the technology or capability that may have served as the initial basis for the relationship. However, even if a company is very careful about partner selection, it will still likely have to address tensions that an inbound technology or product may induce among its employees.
A few years ago, I participated in an inaugural external innovation project within a major consumer products company. The mission was to customize the aesthetics of a product developed by a non-direct competitor to allow its sale in the company’s retail outlets. While a technically straightforward exercise, this project prompted a fair amount of internal resistance from the product development team tasked with the customization effort. Why? The technology customer’s product development team (TCPD) resented that the external innovation strategy and partner was being imposed upon them by top management. Further, TCPD was concerned that the new product would be better accepted than products developed internally. Also, unlike some of the close knit supplier relationships that TCPD had built over a period of years, they wouldn’t be able to control the relationship with this external partner.
Is this type of behavior unique and specific to TCPD teams? Hardly. As evidence of this, separate from the above example, scientists from the Technology Supplier in the case I cited above were guilty of sitting for 6 months (!) on one of my technology submissions. Why was this? My contact admitted: “Some of the scientists were concerned about advancing a technology that they might have been expected to have devised themselves.” And so it goes.
I’ve read a lot of literature that describe negative corporate entities as “antibodies”…almost as if they are an infection that somehow needs to be eradicated. While antibodies need to be dealt with decisively, one must be careful to not “kill the patient”. Top management needs to be sensitive to the fact that the attitudes revealed in the example above reflect simple human nature. The rest of the organization will be watching closely to see how management deals with the issue as a bellwether.
I don’t believe that it’s enough for management to offer verbal assurances to employees that external innovation won’t be a threat to their employment and to their position within the company. In today’s corporate world, outsourcing and downsizing is becoming increasingly common. Who wouldn’t be suspicious of management’s intentions, given the type of business environment we all live in?
So, what should be done about this? Upper management needs to be very transparent and specific with employees about the new strategy, why it’s being implemented, how it’s going to contribute (and be additive) to existing business results to allow the company to meet shareholder expectations. Employees also need to be told how their roles will be altered to accomodate the new strategy and why this will be critical to its success. Those employees who choose to “get with the program” will do so, while those who don’t will exit the business, sooner or later. Importantly, employees will need to experience a reality that is consistent with what management has promised. If management walks the talk, and if business operations unfold as promised, then the naysayers should recede into the background. Companies should anticipate and actively manage these types of issues before they open their doors for external innovation business. I feel it’s naive to assume that your company is somehow different and that these issues won’t exist for you. The ones that address them head-on should increase their odds of long term external innovation success.