Collaborating for Innovation
May 2008 (Ignite Academy)
Innovation is a collaborative skill involving actively scouting the future, generating new ideas, choosing the best, rapidly and effectively implementing them, and then learning the lessons from successes and failures in order to begin again.
Innovation is a ‘contact sport’ that requires a rich mixing and mingling of people, information, ideas and collaborative processes.
Providing a place for this mixing and mingling can be an extraordinarily powerful way to jumpstart innovation. There are huge opportunities to collaborate externally. In direct contrast to past corporate thinking, where innovation was considered too important to involve outsiders, major strategic alliances are quickly becoming the new competitive edge. This Guidance Note sets out the areas where organisations have delivered major successes through embracing collaboration as a key method to support innovation.
Organisations can choose to collaborate with many different parties:
Get close to customers – despite the demonstrated benefits of working closely with customers to drive sales, improve product innovation, and better match supply with demand, a recent study by Deloitte found that only 3% to 8% of respondents are actually engaging their customers in this manner. There is a myriad of examples of where organisations have gone to extraordinary lengths to get closer to their customers. BMW have found a way to collect the views and opinions of car enthusiasts and are, where appropriate, using these to inform future commercial activities. Computer gaming giants have for many years benefited from being able to co-create products with computer-savvy youths. If an organisation is not already collaborating with customers for innovative product/services development, then in terms of external collaboration this may well be the place to start.
Make suppliers part of the solution – as part of Chrysler's SCORE (Supplier Cost- Reduction Effort), there is shared responsibility for innovative ideas to get cheaper parts. The goal for each supplier is cost-cutting opportunities that equate to 5% of its annual billings to Chrysler. The collaborative program has generated a flood of more than 100 ideas per week and an estimated savings of $2.5 billion.
Partner with the competition – collaboration among competitors is the most difficult and delicate form of partnership. But archrivals Procter & Gamble and Clorox have managed to make it work. The two packaged goods companies compete fiercely in the cleaning products and water purification categories, yet both profited when ‘Press'nSeal’, a new plastic wrap based on breakthrough Proctor & Gamble technology, went to market under Clorox's well-established Glad brand. And the collaboration continued with the subsequent introduction of Glad ‘Force Flex’ rubbish bags, which are made of strong but stretchable plastic developed by Proctor & Gamble. Be it with customers, competitors or suppliers, organisations can deliver significant value from developing high quality relationships in a focused, meaningful way in order to influence key decisions and thinking within the business.
For generations, Procter & Gamble generated most of its phenomenal growth by innovating from within. They hired the best global talent and built huge research facilities. In 2000, a newly appointed CEO dispensed with this philosophy and created a “connect and develop” approach that uses the world as a giant idea factory. Today the company searches everywhere for proven techniques, packages, and products it can improve, scale up, and market. Now the company collaborates on a massive, geography-defying scale with suppliers, competitors, scientists, and entrepreneurs. R&D productivity at Procter & Gamble has increased by nearly 60% in the past two years, with P&G launching more than 100 new products where some elements of the development came from outside the organisation.
LEGO Factory has been around for a while, but it remains an inspiring example of how to tap the creativity in a customer base. Children and other building enthusiasts visiting the site are invited to design models (using easy to use, free downloadable software) and take part in competitions for LEGO prizes. Recently a popular contest entitled winners to have their model produced and fully marketed, with them receiving a 5% royalty on each set sold.
Often the germ of an idea comes from an individual operating alone. However such ideas are stretched, built upon, developed and implemented through a series of collaborate efforts sometimes spanning many areas of an organisation.
It is rare that a single original idea becomes the master plan for a successful new product or service. Raw ideas need to be developed, expanded upon, analysed, and tested in order to produce concepts with a high chance of delivering success. Building such ideas takes place most effectively through collaboration between individuals, even though a single person may have created the original concepts. Undoubtedly some people are better at refining the ideas of others, rather than generating original ideas. Those organisations who proactively develop mechanisms to support internal collaboration deliver significantly greater successes in the area of innovation.
Nearly 80% of the senior executives surveyed said that effective coordination across product, functional, and geographical lines was crucial for growth. Yet only 25% of the respondents described their organisations as ‘effective’ at sharing knowledge across boundaries. McKinsey Global Survey of Business Executives, July 2005
No organisation can afford to ignore collaborative technologies. As organisations become more organic, diverse, and geographical, technology will bring people, systems, and resources together. Emerging technologies such as e-Learning, learning management systems (LMS), customer relationship management (CRM), knowledge management (KM), and web-based technologies allow organisations the ability to collaborate across the world.
These management systems support facilitation for exchanging best practices, knowledge, customer information, realtime access to experts within the organisation, training and development, customized marketing information, and collaborative work environments for project teams. Increasingly important, also, are social on-line networks (forums, blogs and so on) that enable an informal exchange of information and ideas on a scale unparalleled in human experience.
Recent research on over 35,000 ideas from a variety of companies has found that the rate of collaboration (the volume and quality of insights and comments shared by participants) depends on a number of factors including the nature of the event, the degree of collaboration feature through internal marketing, and the attitude of the individual participants.
Many organisations seek to establish a physical presence of some form to encourage collaboration. To be successful they typically include:
• Interaction – collaborative spaces invite interaction and movement, allowing people to move around, grouping and regrouping as ideas and energies shift.
• Visual thinking – ideas and thoughts gather power and energy when they can be seen and interacted with. This will require generous whiteboard space, large sheets of paper, boxes of coloured markers, etc.
• Process/approach – collaboration rooms exist to create better and more innovative project results. Therefore, you might want to have a constant reminder of the process you’re following. Collaboration rooms need to stimulate open interaction and ensure respect for each participant and idea. They create a safe environment for generating ‘out-of the- box’ ideas and voicing the hesitations and reservations that might remain unspoken in more hierarchical environments.
Effective collaboration, be it external or internal, is a consistent thread running through those organisations that have a mature and well-developed innovation capability. However, to develop and maintain the kind of formal and informal mechanisms that encourage and support collaborative actions and behaviours often need specific investment and attention. Those organisations that have a defined ‘strategy for collaboration’ were much better positioned to benefit from the collective knowledge, experience, views and opinions that exist across the business.
Get this right – and the opportunities will be endless.
This guidance note is courtesy of Ignite: http://www.igniteacademy.com