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Blog post:

Innovation Success When Working with External Partners

  • This article provides advice related to collective intelligence, ownership, learning, goal setting and IT to help you succeed when performing innovation with one or multiple external partners.

Ideation and innovation across a diverse set of individuals and groups offers both great value and clear challenges. This is especially true when conducting innovation efforts together with external partners. This insight will highlight some key challenges, ranging from strategic decisions to team performance and technology, that one should stay aware of and manage to secure innovation success.

Advice on Key Strategic, Team and Technology Challenges to Enable Value

Define ownership
A key question that likely will come up during your external innovation engagement is who owns what, and what do the various parties have the right to do with it. For example, what applies for future add-on innovations? How open may the standards or code be for entities outside this the current collaboration? Therefore, remember to combine business, legal and subject matter expert stakeholders to iron out the key challenges before you initiate your innovation effort.

Ensure you do not build a competitor
Working in innovation partnerships is high risk - high reward. In the desire to increase the individual competitiveness, some organizations may enter a partnership with the aim to use the other’s know-how for individual purposes. These organizations are more likely to add more resources to the alliance as it develops, which may result in that these companies learn more and faster from the partnership. In some cases, the new know-how may also cause the companies to become competitors, as the terminating partner may enter completely new markets and gain market shares which could have belonged to its partner. To prevent this, start by looking at your own strategy as well as the competitive landscape. Then consider the type of competency that you want to build and ensure that you chose your partners wisely with an eye towards the long-term outcomes.

Optimizing your team to solve challenges creatively is a challenge in psychological safety
Innovation requires you to solve challenges in an ever changing and sometimes even messy environment. This chaotic nature of innovation is only enhanced (for better or worse) when working with external partners.

Research has shown that the best creativity and team output comes from teams where expectations and challenges are freely shared. Given that all members in a collectively intelligent team should share their understanding of reality and challenges, their goal should be not hide behind a veil of professionalism or be concerned due to distrust or fear. To succeed, members must hence feel psychologically safe! Collaboration between people from different organisations makes this even more challenging as you are interacting with strangers who, at a personal and organisational level, may not have their goals aligned with yours.

This can in part be assisted by NDAs regulating what information can be shared outside the collaborative effort. Our experience is however, that the best way to collaborate openly is to build strong relationships and personal trust, as well as to reflect together about transparency and your performance as a team. You should also keep in mind that the nature of innovation and working with immature products generally being messy is true for both you and your partners.

Set common learning goals and adjust the scope and problem definition as you learn
Innovation is hard and one major goal of working with innovation should be to document new learnings. As partners you may have different agendas with what you are trying to achieve with the partnership. Thereby, try to spend time to set common goals and a shared representation of what kind of learnings you like to make, and how you will work together to reach these. In a pilot agreement between two parties it may be better not to define a clear scope in terms of exactly what analysis and solutions to be made during the pilot if you believe this will make it difficult to adjust the scope as you learn. This is because learning may transform your understanding of what you are solving and how it is defined.

Secure proper and sufficiently open IT tools for external innovation
Even though your greatest long-term challenges are on the business and people side, not having your IT in place for external collaboration can obstruct your whole innovation initiative. To gain quicker momentum and reduce unnecessary friction we therefore recommend you take the following steps.

Firstly, digital collaboration tools vary in their support for collaboration with external organizations. Due to this we recommend you early on define the strategy for your external innovation collaboration. This will enable you to define how this collaboration is to be conducted and what digital functionality you will need. Once this is set, you should move on to secure that your toolset can support your requirements through existing tools, enhancements or new tools.

Secondly, even though your IT tools in theory may provide externals with appropriate functionality, they may in practice be closed off. Once you have defined your strategy, way of working and functionality requirements we recommend that you ensure that your tools are accessible. For example, is certain functionality customized for your firm to not be available to outsiders? Does the functionality require special registration or VPN (Virtual Private Network) and if yes how is this acquired?

We hope you have found this insight valuable. Please do not hesitate to reach out if you would like to discuss this or other related subjects further.

Simon Eliasson
Pierre Jarméus