Collaborative Innovation: Engaging Across Organizations

Benefits of a Collaborative Innovation Approach

1. Enhanced Creativity, Idea Generation & Problem Solving 

Diversity in business operations is crucial. This principle is fundamental to most modern businesses. Organizations that embrace diversity often create products that appeal more effectively to specific target markets and users.  

When this approach is applied on a broader scale, not only within individual; but also between different companies, the effect may even be more significant. This is because it brings together and harnesses the talents of people from various industries, with diverse expertise, experience and problem-solving skills. 

2. Resource Sharing  

A collaborative approach to innovation also results in companies sharing the resource requirements such as the technology, infrastructure and human capital required to develop new offerings. This makes the endeavor more cost efficient and enables organizations to have access to know-how and potential Intellectual Property (IP) they would otherwise not be able to access. 

3. Boosting Brand Image and Reputation 

The right cross-company collaborations can help to enhance brand image and reputation through association with other reputable and innovative companies. For consumers, this can increase trust and loyalty in a brand. 

An example of this is the collaboration between H&M and high-end fashion designers for once-off collaborations. This has included collaborations with Karl Lagerfeld, Versace, Moschino and Mugler, to name a few; creating exclusive collections at affordable price points.

These partnerships originated with the aim of generating publicity and have led to these designer brands democratizing their pieces and indirectly leading to an entirely new clientele. This has significantly boosted brand image and loyalty amongst many people due to these high fashion brands giving a new range of customers access to their otherwise pricey clothing. 

4. Expanded Market Reach 

Cross-corporate innovation can significantly widen an organization’s target markets. This is because the companies collaborating can be active in entirely different industries or fields.

A collaboration thereby allows organizations to tap into different target markets, and potentially strengthen their position or create an entry point to entirely new markets. 

Two of the most well-known and loved consumer brands worldwide, Apple and Nike partnered in 2006 to create the Nike+ product line, integrating Apple’s technology with Nike’s fitness expertise. 

The collaboration is still ongoing and has led to products like the Nike+ iPod Sports Kit, Nike+ Running app, and Apple Watch Nike editions, providing enhanced fitness tracking and a seamless user experience for athletes. 

For both companies this partnership has been incredibly valuable. Not only did they get to work on new and innovative products, it also helped each of the two companies to expand their customer bases and enhance their credibility across different industries.  

How to Implement a Collaborative Approach to Innovation

While a collaborative approach to innovation can yield significant benefits for organizations, many companies still choose to work in a siloed approach. This being even though the superior know-how and access to resources of another company would significantly benefit them and offer the potential of improving their innovations and ideas.  

Often the reasons for this are manifold and companies struggle to implement a collaborative approach. How can an organization make cross-industry and cross-company collaboration for innovation a reality?  

According to a report published by the World Economic Forum, a useful model to manage a collaborative innovation partnership is the Prepare-Partner-Pioneer model. This model consists of three different layers: 

1. Prepare  

This can be likened to laying the ground rules. Where careful preparations are missing, organizations risk not finding the right partner, potentially running into disagreements or complete misalignment between collaborators when it comes to innovation. 

• Establishing Clear Objectives

To set clear objectives, organizations entering a collaboration should identify the area of innovation, the desired outcomes for all stakeholders, and evaluate whether the expected benefits would outweigh the associated costs.  

• Building the right partnerships & networks

Identifying potential partners requires being part of the right networks and using the most suitable approaches to find them. Companies can participate in industry events, networking forums, and leverage online communities to identify and engage with potential partners. Some organizations also use dedicated sections on their website to highlight partnership opportunities, showcase successful collaborations, and provide a platform for interested parties to reach out.  

These efforts ensure that companies can tap into a diverse pool of expertise and resources, fostering innovation and growth through strategic partnerships. 

• Preparing organizations by achieving cultural readiness

When companies collaborate on innovation, efforts need to be made to put organizational structures into place that will govern the flow of information and exchange between the parties. Since often these two parties will have different ways of working and different perceptions of what it means to collaborate in innovation, it is important for all employees to be on the same page and to set up cross-functional and cross-organizational teams that will ensure a smooth collaboration. 

2. Partner

At the root of every effective and valuable collaboration lies a strong mutual agreement. This needs to be established both in the form of informal and formal agreements, to set the tone and framework for companies to enter a collaboration. 

Partnering for innovation carries a higher level of uncertainty than a lot of other collaborations, since ultimately the availability of resources, know-how and skill, as well as IP rights differ from firm to firm. To prevent any disagreements down the line, it is important to set up an agreement that offers a ‘win-win’ for the collaborators.  

It is also crucial for organizations to choose their partners based on the alignment of values and ethical standards. Failure to establish mutual agreement on moral principles could jeopardize the success of the partnership.

3. Pioneer

Consistent efforts need to be made to maintain the partnership and ensure that it is monitored and produces ongoing results and additional value.  

Where agreements for prolonged collaboration are in place, volatile business environments or organizational structures can easily put collaborative agreements at risk and potentially diverge the interest of firms. It is key for firms involved to continuously reassess and potentially realign to forge a longstanding collaborative innovation partnership. 

To successfully innovate collaboratively, organizations also need to ensure that innovation departments or cross-company departments working on innovative products and services can do so without being exposed to the corporate pressures of the rest of the firms. In this way, employees will really focus on producing innovations. 

Tools and platforms facilitating collaboration

A crucial aspect of establishing a successful collaborative innovation partnership between firms is also by implementing the right tools to do so. While there are many different tools that can be used to create a collaborative innovation approach beyond company boundaries and even extending to other stakeholders, such as open innovation for example, there are various innovation management programs which can make the collaboration between two corporates for example even smoother.  

KICKBOX Intrapreneurship is an employee-driven innovation program that allows companies to run cross-corporate campaigns and engage in peer-to-peer exchanges.  

Perhaps a very fitting way of summing up the numerous benefits of collaborative innovation is in the words of Mark Esposito, from Harvard “collaborative innovation is the engine of modern, agile organizations capable of creating new capacity which can pioneer radical new ideas while testing the limits of markets. A true best friend for growth.” 

In an increasingly complex and dynamic environment, the chances of a single company solving difficult challenges are minimal. To continue meeting customer and consumer needs, particularly in critical areas, companies are required to broaden their focus and capabilities through collaborative approaches.  

Ultimately, when organizations combine their forces, their power isn't merely the sum of their individual strengths; it's exponentially multiplied.