Editor's Choice, September 2015: collaborative innovation – why, how, and what does it look like?
Collaborative innovation between mature firms and young firms is the focus of this month’s Editor’s Choice. The report looks at how collaboration unlocks opportunities for firms, different forms that partnerships can take and highlights key ingredients for success.
Drawing on the experience of several partnerships between corporates and start-ups, it shares a framework for planning and operating four types of collaboration, taking potential pitfalls into account.
‘Collaborative Innovation: Transforming Business, Driving Growth’ is written by the World Economic Forum. It actually focuses entirely on European firms, but the lessons about why and how to collaborate for innovation go much wider. I can certainly see their relevance for potential participants in Connect to Grow, a DFID-funded programme to catalyse collaboration, which launched in Nairobi and on the Hub last week.
Why to collaborate is probably fairly obvious. Table 1 below summarises the capacities and challenges of each partner, which are the drivers for working together.
How to partner is more challenging. The authors frame the process with 3 Ps:
- Prepare: this task lays the critically important and often overlooked foundation for collaboration, and involves defining objectives, finding the right partners, preparing both organizations culturally and through incentives to support collaborations, and connecting with the right potential partners).
- Partner: this task focuses on negotiating and tailoring the projects with partners to ensure that the benefits, risks and governance aspects are adequately defined.
- Pioneer: this stage ensures that partnerships adapt and thrive for the mutual and sustained benefit of all parties as they are executed and as the context changes).
The report contains advice on negotiating the partnership, focusing particularly on the need to be flexible and creative on terms around intellectual property, and to adjust to the different timelines of larger and smaller companies. It has a strongly worded message about the need for top leadership support: saying if your collaboration does not need approval of the Board of your partner, then don’t bother.
Delegating collaboration within the organization if the chief executive officer is not interested means it is dead.
Paul-Bernhard Kallen, Chief Executive Officer, Burda Media
But, you may ask, what exactly does a ‘collaboration’ or ‘partnership’ look like? That is a question that the Connect team were being asked at the SEED Forum in Nairobi last week. This report identifies 4 types of partnerships. While there is infinite variety in how collaboration can be structured, I like the basic framework, in which the options vary in the degree of resources they require and the extent to which they take an established innovation forward or create something through an entirely new innovation cycle. Smart procurement innovates in just one defined stage of the product cycle and takes limited resources. At the other extreme, a joint venture can open up the entire innovation and product cycle, but requires large commitment of resources.
The authors make a potent case in the European context that collaborative innovation is essential both for individual businesses and for boosting economic growth. Incremental innovation enables firms to stay relevant. But ‘market-creating innovation’ does more. Through ‘collaborative innovation’ it fosters growth through new business models, new offerings, and the evolution of entire systems. In inclusive business, there is a lot of talk at present about ‘replication’ of models from one BoP market to another. I think this discussion of collaboration for breakthrough innovation is a welcome and necessary complement, taking the discussion beyond simply scaling through multiple sites, to consideration of dynamic productive and disruptive changes in BoP business.
For the full report from the World Economic Forum click here.
For more in our editor's choice series click here.