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Innovation Ecosystems: a Matter of Identity

pascal brier

The famous German writer and poet Goethe, wrote: “Tell me with whom you associate, and I will tell you who you are.” Replace the word ‘associate’ with ‘collaborate’, and you’ve got the perfect quote to sum up the modern innovation ecosystem.

Why? Because the process of creating an ecosystem today reveals so much about an organization – from what they offer to what they value.

Surviving the avalanche of progress
A modern innovation ecosystem is a network of organizations coming together to do what none can do alone – thrive in an increasingly volatile, uncertain, complex and ambiguous corporate environment.

I’m no historian, but I can’t think of any other period where so many sciences have evolved so rapidly within the same timeframe.

Everywhere you look, progress is being made in all domains, from computing and robotics to life science and energy management.

“If companies want to keep up with scientific advancement and drive innovation, they will inevitably need to master new technologies that lie outside their legacy core competencies.”

Critically, these new technologies intersect; they don’t operate in silos. Just look at how biology, engineering and computer science have converged to create biocomputing, or how life science and nanorobotics come together in nanomedicine.

If companies want to keep up with scientific advancement and drive innovation, they will inevitably need to master new technologies that lie outside their legacy core competencies.

It’s the same challenge that automotive companies have started facing in the last 10 years, when they were suddenly asked to develop and master electrification, connectivity and software.

So what should companies do?

Unless they have unlimited time, money and talent, there’s only one thing they can do: partner with other companies to fill in the gaps and get faster access to market.

A peer-to-peer relationship
Note that I say ‘partner with other companies’, not ‘find suppliers’.

While needing external help is not new, what was once and in some industries still is a very hierarchal value chain is now an interconnected network of companies, in which each party’s unique contribution is (or should be) recognized.

In other words, a true ecosystem.

To build one, here are three things that organizations must remember:

  1. Distinguish your competitive advantages from your core competencies.

If ecosystems are built on each company bringing something unique to the table, the million-dollar question becomes: what does your company want to bring?

To answer this, don’t only focus on what you can do – even if you believe you do it best.

Focus on what you should do: the key elements that matter to clients and consumers, and will create a strategic differentiation and drive tangible results.

I often see companies who tend to confuse their traditional competencies with what constitutes a competitive advantage for the future.

It may seem overly simple, but overcoming this can be the hardest step.

Because it requires a huge amount of self-reflection from companies, and an honest outside-in point of view to assess the market landscape and their own position within it.

In some cases, it could also mean that companies will have to completely rethink their strategic offering, triggering a full-blown identity crisis.

Ultimately though, it will lead them to an ecosystem that allows them to generate sustained business value, while keeping up with relevant advancements within and beyond their industry.

  1. Avoid the ‘not invented here’ syndrome.

I think it speaks for itself but the best way to illustrate this point is with an anecdote.

Remember the auto companies? The ones seeing connectivity, electrification and software infiltrate their industry? Back in 2015, very few were taking Tesla seriously and would bet that Tesla would become the world’s leading electric car company, and that this ‘industry outsider’ looks set to hit a $1 trillion valuation by 2022.

In this era of convergence, organizations must understand that innovation and disruption can come from anywhere, and the only way to beat them is to join them – early.

Which brings me to my next point.

  1. Partner early in the process.

This isn’t just about bravery. It’s also about self-awareness.

If you only partner when you’re an established business on downstream activities, you run the risk of falling into the old value chain model.

Organizations must have the courage and honesty to admit that they’re unlikely to be the best at anything early on in the game, and seek external input at the foundational stages of a project, such as design or even R&D.

This will certainly increase their chances of delivering a competitive go-to-market offering. Beyond that, it will also ensure that a culture of collaboration is built into the very DNA of the organization or project – along with the processes to support it.

And that can only lead to more innovation.

Why your innovation identity matters
As a final note, a company with a high-functioning, equal and collaborative ecosystem tells me a few things.

One, they have a strong, well-considered business strategy and a unique competitive advantage. Two, they are both open-minded and hyperaware of external threats. Three, they have an innovation mindset and usually a superior product or service.

Most importantly, they have a high potential to deliver true innovation and thrive as a business of the future.

What does your ecosystem say about you?

For more information: www.capgemini.com