Although partnering and open innovation are typically discussed separately, the fact is that they are inextricably linked. The best way to achieve long-term open innovation success is by becoming a partner of choice. In the video below, Dr. Gene Slowinski, Director of Strategic Alliance Research at Rutgers University, argues that the purpose of being partner of choice and of open innovation are, in fact, the same. In both cases, the point is to get first pick at interesting, external technology, markets, channels, etc. The first company that people bring their innovations and opportunities to is the company with the best partnering reputation. Further, companies can encourage people to come to them first by building the processes, tools and metrics of open innovation into a competency of the firm. Check out the video below for his insights.
Not convinced? Check out a few examples of companies that successfully partner for innovation:
Procter & Gamble
It’s no coincidence that P&G, a well-established open innovation champion, is also dedicated to being a partner of choice. As the P&G website states, “P&G wants to be the business partner of choice because we believe more value can be created in effective collaboration with the right partners than we could achieve alone.” P&G not only excels at partnering to bring technology in, such as with Sederma in the creation of Olay Regenerist, but they also license brands out. Febreze Filters, for example, came about because a smaller company approached P&G about licensing the Febreze brand. Thanks to their reputation as a partner of choice, P&G is more likely to be approached with innovative breakthroughs first.
Clorox, the sometimes rival, sometimes partner of P&G, explains in this presentation both the impact of partnering on open innovation and the impact of collaborative innovation on competitive advantage. In their own words, Clorox believes that “Deep, strategic partnering yields impactful innovation.” Further, as demonstrated in the slide below, partnering enables Clorox to stay competitive against larger companies with greater resources. While Clorox’s own R&D spending and patent filings are dwarfed by the likes of P&G, 3M and Unilever, thanks to partnering, Clorox has far greater R&D investment and patent protection.
Deutsche Telekom is one mobile company looking to overcome pressures on profits through innovative solutions for connected life and work. The company declared two years ago that they would do more innovation through partnering. Since then Deutsche has worked to transform their mindset, to facilitate partnering and to make the company more agile. As a result, their product development cycles are down from 12-18 months to 3-6 months and every week one new partner goes live in their partnering ecosystem. Further, partnering for innovation is there to stay. As Thomas Kiessling, Chief Product & Innovation Officer at Deutsche Telekom, explains in the video below, the machine-to-machine market represents a huge opportunity that Deutsche Telekom plans to conquer by being a solution provider.
There’s no doubt that General Electric understands the value of innovation. GE is the only company that was listed on the Dow Jones Industrial Average in 1896 and still exists today, a feat possible only through constant innovation to keep up with technological and market revolutions. It comes as no surprise then that GE regularly ranks amongst the most innovative companies and took home the 2013 Open Innovation Partner of Choice award. GE keeps the innovations flowing in by running OI challenges and by making many of its patents accessible to the public. GE’s own Global Innovation Barometer found that 87% of respondents are confident their firms could be more innovative and successful if they collaborated or partnered with other businesses.
Making partnering for innovation a competitive advantage
Partnering and Open Innovation are clearly a winning combination, and it’s no coincidence that some of the most innovative companies are also known for being the best partners. But how do companies arrive at this level of success and expertise? Like Dr. Slowinski suggests, processes, tools and metrics are vital for turning collaborative innovation into a firm competency and competitive advantage. By implementing a best-in-class software solution, companies gain all the processes, features and functionalities needed to support best practices. Further, with a fully-integrated solution, the process is seamless, from scouting and evaluating new opportunities to securing the most promising deals and turning them into profitable alliances. Partnering for innovation requires tough work, but companies that do it are setting themselves up for long-term, sustainable growth.