The key to building a well-functioning innovation ecosystem, is, as with building anything, having a solid foundation.
By definition, this is where you are looking to have all the relevant parties you need involved end to end from need identification to commercial marketplace, so it’s no surprise the keys to a strong foundation are a clear understanding of your reason to innovate and having the right people involved. Having the right reasons and the right people sounds simple enough, yes? So why do so many struggle to get it right?
I recently went to an event in Boston on Collaborative Innovation which looked to address connecting the internal with external to overhaul organisations’ innovation strategies and was surprised at the lack of focus on the workforce within the organisation. The attention was squarely on external innovation and accelerators.
External innovation and accelerators are common approaches to building out an innovation ecosystem without looking to fathom the internal ecosystem first. Or, they are too often used as a substitute for failed attempts to innovate internally and/or a sticking plaster for the lack of a comprehensive innovation strategy. Companies long to be able to call themselves innovative and if this is not working well within the guts of the business they go external. Usually this is where there is an inability to align internal innovation to BAU – the business is just too stuck in its ways to do things differently that the innovation has to happen separately.
This is understandable but may not get you where you want to be. The main issue with this is that you can’t really call yourself innovative if you’re not working innovatively and innovating internally.
Many accelerators are set up on the principle of attracting exciting start-ups who need corporate money to bring an idea to fruition/sell their concept to. To some degree this is mutually beneficial. What comes through may be new (though chances are it’s just a better version of something you already have), and it may be the first time you’ve partnered with a small business in such a way, but buying in something new from a start-up is exactly that – buying something new. Hans Balmaekers of Intrapreneurship Conference takes a deeper look at some of the issues here in Innovation Labs: Flying, or Failing?
You need to be able to bring something other than money and experience of ‘product to market’ to the table – because, well, if you’re looking externally because your internal innovation isn’t doing so well, you have to recognise that the current value you bring has a shelf life. Your organisation’s value is limited.
Ultimately, those new items coming through the accelerator will likely get swallowed up into the bigger, slower beast. Not much about how you operate has changed. The flow of information is limited to your benefit and therefore you won’t be seen by the wider ecosystem as able to contribute meaningfully.
To be a truly innovative business and build a fully functioning ecosystem you need to start from within. If you want top quality innovative partners then you need to attract the best talent (likewise with your internal workforce) and they will be attracted to you if you are collaborative and innovative – marking yourself out from the others who are also willing to just pay.
For ecosystems to be well built and external innovation to really deliver transformational outcomes, the first step on the journey is dependent on what’s going on internally. The organisation needs to ask itself some simple key questions: why, who and how?
Why – what’s your purpose for innovation, the unarticulated need you are looking to solve?
Who – what competencies already exist in the organisation, who do you need to hire, what other types of stakeholders do you need (at this point you of course need to be open to not being able to do everything yourself, but must at least check first.) If you don’t look internally think what message you are sending to your workforce about their lack of opportunity to help drive the business forward.
How – what do you need to create/set up to deliver and what business models are appropriate for the relevant ecosystem or partner?
By asking these questions we are taking a design thinking approach – why (insight – need identification), who (connected – ecosystem for solution creation) and how (adaptable – validation and to market asap) – which urges us not to make assumptions about what solutions we need.
Critically, looking to your workforce will help you identify step one and two more clearly – the Why and Who – the whole premise for many going external!
If you are not working collaboratively internally, you are not able to understand what skills and knowledge you have internally and therefore are unable to utilise it properly, or get correct or more informed answers to the above why, who and how.
Using external innovation to solve problems when you are not using internal resources to truly identify what the correct problems are is a waste of existing knowledge and understanding, as well as missing the trick of potentially being able to do it yourself (and not having to go through the deal/IP process of external interactions). If you’re not looking to solve the right problems then you are unlikely to be working with the right external partners. There’s no reason why you can’t ask both, but not asking internally is leaving a huge stone unturned. The point of an ecosystem is that information moves in both directions and that those within it are interconnected. Surface what is going on internally so you can connect and balance the internal with external better – bring the inside out and bring the outside in.
In order to change and get this right internally, your organisation needs to develop a learner’s or growth mindset – society’s constructs to date mean that traditionally we go away with a problem and feel like we have to come back with the answer, to be certain and have a final end point. This is exemplified in transactional relationships. However, what’s really needed is to be curious and persistent about learning your way around an obstacle – not ‘yes’ or ‘no’, it’s ‘how could we?’, ‘what if?’, ‘how about…?’ This is what’s needed internally and that’s how your partners need to work with you too if you want co-creation rather than a transactional partner/supplier relationship. Gareth Morgan’s blog Innovation Culture – Changing Mindsets explains how Fidelity International are successfully addressing culture and mindset to get it’s people engaged and make the most of their talent through different design thinking approaches and innovation tools.
So when building out your all singing all dancing innovation ecosystem, go internal first. Put your mask on first before you can help others. Or, if you prefer, you can’t be happy in a relationship (a healthy one) until you are happy on your own.
Written by Nicola Darke