Finding Innovation Through Collaborations and Partnerships

Generating innovation is the number one means of staying ahead of the competition. Forming collaborations and partnerships is an excellent strategy for accessing innovation, but success depends on perspective and planning.

Driving innovation is the number one strategic goal for most businesses, and meeting this goal has become more challenging in a constantly changing business environment. Partnerships are built for many reasons – to name just a few, they may be to innovate an existing product design, generate innovation, capture a competitive edge, advance corporate social responsibility efforts, and transform operations and supply chains. The question is how to create new partnerships and collaborations that successfully drive innovation? Partners can include a variety of organizations such as universities, startups, accelerators, clients, nonprofits, and associations. However, many partnerships and collaborations fail. Though there are many reasons for failure, there are also common underlying issues that derail these associations. First and foremost, corporations need a holistic perspective, and partners or collaborators need the freedom to innovate and not be hemmed in by bureaucracy.

Moving From Research to Products

A collaborative arrangement is one in which the organizations do not share decision-making, but do share information while coordinating efforts, however each partner retains autonomy. In a partnership, decision-making is shared - partners co-create and share resources, and there is joint management. Beyond strategic is the integrative partnership, which is focused on achieving sustained impact across sectors. The structure of a joint effort depends on whether it is a collaboration or partnership, but there are some common success factors applicable to both. For example, both parties should share a vision, agree on leadership and develop an acceptable financial arrangement. But there are also other critical details to navigate, such as non-disclosure agreements and intellectual property (IP) that will potentially be produced.

For example, collaboration with universities is a common approach because the universities have research facilities already established. Kenneth Lutchen, Dean of Boston University’s College of Engineering addressed what it takes to accelerate the move from research to new products. He says that a transactional model requires negotiation each time a new research project is initiated, and instead, the partner organizations should use a relationship model and find universities or other organizations that enable them to stay continuously connected to early-stage research and production of innovation. Other advice includes seeding research of areas of interest as they emerge.

Lutchen described how Boston University (BU) seeded an acute care project with Philips Healthcare and submitted a joint proposal for funding to the U.S. National Institutes of Health. Philips Healthcare was focused on fostering a long-term relationship with an educational facility instead of just funding a project. Lutchen also pointed to Red Hat, which chose to go where the collaborative opportunity existed and opened an open innovation lab in Boston. The company created a $5 million partnership with BU to advance open-source and emerging technologies. There is jointly licensed co-developed technology, with each partner retaining exclusive rights to pre-existing IP. The IP developed will be owned by whichever organization employs the inventor.

Oxford University held a UIDP Summit that addressed university-industry partnerships that are best fit for today’s business environment, societal challenges, and tech-based disruptions. This is an excellent source of more information.

Holistic vs Project Approach

Businesses can partner with large and small firms. Many are partnering with start-ups because they often develop technology innovations. The start-up gets access to funding, markets, support, and other resources, and the corporation gets faster access to innovation needed to remain competitive.

A conversation with experts in corporate-startup partnerships revealed their research found only 28 percent of startups were satisfied with the partnership, and the majority of corporate investors stopped investing after 2-3 years. The success rate is higher when corporations take a holistic approach rather than a one-objective project approach., because the project focus ignores the additional capabilities of the startup, leading to missed opportunities. Other factors causing partnerships to fail include lack of internal corporate support for the partnership, lack of strategic clarity, lack of impact tracking, and lack of definitive leadership to keep the partnership moving forward. Also mentioned are slow processes such as corporate future resources budgeting, as for example the corporation asks the startup to anticipate future needs and plan way in advance, while the startup does not want to be hemmed in, because innovating is a fluid process.

Strategic Cycle for Collaboration

Successful partnerships are built on a thorough analysis of current corporate capabilities and the partner’s capabilities plus a measurement system. It is a process requiring in-depth planning. Research has shown that some partnerships fail because corporations do not spend the time and resources evaluating the gaps in their own business and the gaps in the potential partner.

According to the World Economic Forum, “…research suggests that often the most significant challenge and the greatest positive impact springs from how well firms prepare to collaborate: having well-defined objectives, a carefully-designed business case and suitable organizational processes.”

The International Organization for Standardization’s (ISO) blueprint for a successful collaboration strategy shows multidimensional relationships. A business can develop partnerships with external collaborators, such as universities and startups, suppliers, customers, and internal departments. The framework has eight stages which are awareness of the vision, values, and objectives; knowledge of the specific strategy, desired outcomes, business case, and implementation plan; internal assessment of policies, people, and collaborative maturity; partner selection based on capabilities and roles; working together through governance, management system and processes; value creation through an improvement process; staying together requiring team management and measurement; and exiting via the development of an exit strategy for disengagement.

Joining Efforts to Achieve Outcomes

Corporate collaborations and partnerships are major sources of innovation. They are proving to be successful strategies for delivering innovative products to corporations in a business environment constantly in a state of transformation. Success depends on the corporation being willing to give the innovators the funding and freedom to utilize their capabilities, and that is where difficulties often arise. Sometimes, the biggest corporate challenge is finding the right balance between control and freedom.