I have been testing perspectives on open innovation I shared in my previous post here on Sideways Thoughts. Over the last month, I have had some fascinating conversations with leaders in:
- Not for profit and Social enterprise;
- Pre-commercialised start-ups;
- Market disruptors in the energy space;
- Distressed and disrupted companies in the media space; and
- Complex GOCs.
Questions that come up in our conversations include:
- How does innovation happen in the organisation?; and
- How are others involved from outside the organisation?
The conversations are reinforcing two characteristics of collaboration inherent to the emerging open innovation ecosystem.
First, it is naturally occurring. Collaborative models can be seen as an expression of the invisible hand of the market moving in the direction of least resistance for maximum gain. Leave us alone in a room with ourselves and we will most likely work with each other to figure stuff out.
Second, culture plays a significant role in effective open innovation structures. A common barrier to getting people around a table or playing well with each other is the natural fear-based response inherent to survival mechanisms of established institutions. If we are all in a room together, whoever thinks everyone else is out to get them probably won’t play well with others.
Organisations that best capitalise on open innovation frameworks are those that can balance risk-aversion with a shared aspirational vision within the competitive framework.
This is a premise I have been testing in my conversations, framed with three forms of: corporate, social sectors / hubs, and the open market.
(I repeat the caveat from the original post that the forms are not cut-and-dry. The interfaces and players are constantly emerging and evolving. However, it is a place to start.)
There are two narratives that emerge in the corporate space.
One narrative is a fear-based response, often seen in long-standing, risk-adverse corporations or government institutions. Individuals in these organisations can be 30+year veterans in a profession that may end well before their career. The organisation may be delivering a service that will be made redundant at a faster rate than the organisation can adapt. The proverbial ice age is coming and there are not enough generations available for the dominant dinosaur to alter its DNA fast enough.
A second narrative can be described as constructive, from the perspective of a large institution that can leverage a wealth of domain knowledge. Individuals are emotionally resilient and making external connections to add new forms of thinking to their substantial repertoire. The organisation is collectively investing in new skills to prepare for a range of likely scenarios. A disruption is coming, and they have the experience and scale to best position themselves as a market player.
The narrative can define the nature of the collaboration. Leaders describe this not as an either/or proposition, but as a continuum made up of pockets of both perspectives in the same organisation. The narrative can also change, as leaders make a conscious choice about the future they want to create for themselves and their teams.
A fear-based response is more likely to engage in open innovation frameworks as a transaction. Activities such as hackathons or an ideas crowdsourcing initiative are seen as stand-alone projects. Engagements with third-parties such as the education sector or supply chains can be on one-way provisions of service rather than a sharing of mutually beneficial ideas.
The second constructive narrative is more likely to take a holistic approach to collaboration activities, integrating and aligning to strategic direction. Examples involving competitive collaboration include engaging with competitors to educate the market and create demand for new market disruptions. Market engagement is early and frequent to test ideas rather than waiting to have all the answers.
The social “third space” sector is an area I am most excited about, as I believe that it is only through our collective wisdom that we will address the complexities of the challenges we have created for ourselves.
The social sector can experience different drivers which affect the nature of collaboration. The quest for funding from sponsorship, donations and grants has unique nuances that are different to competing for clients or consumers. Public sentiment, policy direction, and volunteer engagement are just some of the dominant concerns.
Collaboration can be more prominent in the third sector as the resources are often not available for any single player to address the scope of change on their own. There is also a greater need for collaboration to coordinate and align services between two organisations doing “good” that may inadvertently create negative conflict competing to deliver the same social outcomes.
The social sector has a valuable role in fostering open innovation collaborations, as they can sit outside the competitive frameworks of a capitalistic profit motive. The combined form of collaboration I hear from leaders is one that taps into the rigour of commercial drivers from the corporate sector under a scope of shared purpose inherent to the social space.
The open market acts as a case study in complex adaptive systems, evolving and self-learning towards dynamic outcomes in a rapidly changing environment. It is messy, uncertain, and exciting.
One challenge moving forward is to address the risk associated with ‘messy’ and ‘uncertain’ while maintaining ‘exciting’. The diagram above risks becoming one big blob as market leaders emerge and acquire or merge capability and capacity in a quest for consistency and dominance.
This will be a careful balance as norms are established and approaches become institutionalised. It does not take long for those who were the disruptors of the past to become the inhibitors of the present and irrelevant in the future.
Collaboration is natural in this space, as actors are often unable to leverage existing capital of brand identity or market momentum. The opportunity is to ensure collaboration includes existing institutions.
A common frustration from start-up founders can be the bureaucracy involved with engaging with established institutions. From the other perspective, start-up founders can be reticent to tap into established channels for fear of getting lost or adsorbed.
We are seeing collaboration mature in this space. Large corporations set up innovation teams in open market shared working spaces. Government and academic innovation hubs are popping in both city and regional areas. A key to the success of these initiatives will be ensuring the nature of the collaboration avoids the protective fear-based response that prompted the emergence of the initiative in the first place.
The nature of collaboration
As soon as you have people in a room, you have culture. Your culture will determine how effective your collaboration will be. What this looks like varies based on your context (start-up, corporation, not for profit), but the principles remain.
What we see and I hear leaders reflect is that:
Being intentional about your narrative and perspective, replacing a fear-based response with a realistic shared aspiration, fosters more effective collaboration and improved shared outcomes.
This conversation is ongoing, a process of constant learning and exploring. How does innovation happen in the organisation? How are others involved from outside the organisation? And what is the nature of the collaboration you experience?
In the spirit of collaboration, I welcome your input.