The Future Of Innovation Is About Innovation Value Webs

Mr Geoff Carss

The future of innovation will be defined by our appetite to create new models for innovation, demonstrate leadership and find new ways of extending the enterprise to include other stakeholders.

Multi-national companies realise they employ world class expertise and need a way of engaging them in the innovation process on a large scale, sustained basis to help solve material business problems. Enlightened large companies have taken this one step further and understand that there is significant insight, creativity and ideas in the extended enterprise – including their suppliers, customers, consumers, business partners, academia and alumni networks

One model which I believe will start to emerge over the next few years is that of collaborative innovation value chains or value webs. While the concept of value chains has been around for some time the idea of a company recognising it can create an innovation value chain as a means of creating sustained competitive advantage is quite new.

Most models for Open Innovation typically have a large company drawing insights, ideas and innovations from smaller companies with only one level in the network (although I appreciate there are a number of exceptions to this).

The collaborative innovation value chain can be described as follows:

A multi-national company identifies the need for diverse collaboration to solve complex business problems

This set of business problems are not easy to solve, and solving them will create significant business value, and may take some time

The ultimate beneficiary of any new solution may not be the direct customer of the multi-national but may be a consumer who will pay a premium

The multi-national recognises that bringing together a diverse but complimentary set of organisations over a period of time will create a significant barrier to entry

The company also recognises that there needs to be some form of differentiated relationship with members of the value chain such as minority equity stakes, shared IP development, exclusive relationships etc

While the multi-national may sit at the centre of the value chain/web (as it has the capacity to invest and direct) it may need to influence it’s suppliers and customers to adopt similar approaches for them to be able to contribute effectively

At Imaginatik we are seeing some companies reaching out to suppliers, customers and consumers with some 60% of our customers are involved in some form of collaborative innovation programme.

To engage a number of these groups at any one time, to solve complex and material business problems, will require new models of governance, ethics and alignment of business goals.

I believe the potential benefits of collaborative value chains or webs are so significant, due to the potential for competitive ‘lock out’ as well as well as profit increases, that we will see examples of these appearing in the next 1 – 2 years.

If you aren’t innovating with your suppliers, customers, consumers or business partners then be assured that your competitors are – it’s an arms race.

Article © 2009 Mr Geoff Carss. All rights reserved.

about the author...

Mr Geoff Carss

Mr Geoff Carss

affiliation:   Imaginatik Plc

position:  Vice President – Professional Services

country:  United Kingdom

area of interest:  Collaborative Innovation

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