The wild frontiers of open innovation
By Matt Chapman
Every now and again I meet one of those fantastic companies that was born from an entrepreneur. They had a great innovation some time ago, which they capitalized on, and the company grew quite rapidly. Further innovations followed as opportunities continued to be observed through being close to the customer, as the market needs grew and evolved. As they’ve grown they have also hired some really smart people who are very creative. So the innovation continues to flow from everyone and they are supported and developed according to market feedback. So fast-forward a few years and we have a well-established innovation culture with a very organic structure, process and management team in place that hasn’t seen the need to change the model.
But what happens to companies that continue to use this approach when the gold they’re panning starts to run out?
First they cry out and panic! Then they run around and ask questions: “How has this happened?” “Have we got too big and removed from the customer?” “Where did it start to go wrong?” “What do we do next?” Etc. Etc.
There are three standard responses to this scenario:
- Carry on: “There is still some gold here, just not as much.” – a.k.a. decline
- Stop: “We’re quite wealthy now so we don’t need more gold to grow.” – a.k.a. self delusion
- Change: “We need to find more sources of gold.” a.k.a. continue to grow
So what do companies have to change to support their growth?
Well they have their pans – they work. They also have great people who know how to pan for gold. They just can’t find as much gold because it’s running out here. So the obvious conclusion they draw is that “it must be the river.” They need to find another source and take their innovation people and pans there to find more gold.
Ahhh - but who’s to say the new river will have gold?
This is the question I get asked by companies venturing out into wild frontiers of open innovation. They’ve had great success with innovation since the company’s early days, but now they need to go outside and see if customers/partners, through open innovation, have anything that can help better serve them and meet their growth targets.
Thankfully all this wild talk of new frontiers hasn’t gone to everyone’s head – the innovation team does see the limitations of new waterways, although seeing and acknowledging can be two different things.
So now the big concern is that the new river might not have any gold, although they’ve heard the rumors of other companies connecting, developing and discovering gold. Ignoring the obvious need for training, new tools, techniques etc., they want bigger pans as they are going to be sifting more rocks (ideas). There are many more customers/partners/etc. than employees, and they can see their old pans aren’t up to the job.
Then they experience the real wake-up call: They’re really not sure they will find any gold –they know it can be hit-and-miss because there isn’t a lot of science to their current process. The pans therefore need to be cheap, just in case they don’t find anything.
You don’t need better pans. You need a different, smarter approach altogether.
Companies can often see a better approach that would help them, but the myopia of using what had worked before is holding them back – even when it is clear that they could see their shortcomings.
Now I’m being a little unfair. Maybe they are not ready. Maybe it’s just not for them. Maybe panning for ideas is perfect with their customers. Personally I prefer to be ready and have the best chance of striking it rich.
Innovation isn’t about speculating, it’s about results. At some point, when the time is right, we need to put down the pans and progress. The pioneers have broken the ground. Time to be fast followers and learn from the best.