Two (or more) companies innovate better than one. However, a remarkable number of businesses have yet to take this on board. Research shows, no more than 7 (!) percent of businesses collaborate on a systematic basis. KPMG-partner Han Gerrits knows why so few collaborate and what they need to do.
Would Steve Jobs have managed to establish Apple without Steve Wozniak? Could Elon Musk have made Tesla a success without the billions in subsidies he’s received from the American government? Would Facebook have become a viable business without the advice of Napster founder Sean Parker?
Collaboration works. Recent research into innovation in Europe has established this as a fact: businesses that systematically seek to collaborate with other businesses are more likely to launch successful products. And what’s more, their revenue grows twice as fast as that of companies which choose to innovate alone.
Two heads are better than one and it seems that two (or more) companies also innovate better than one. However, a remarkable number of businesses have yet to take this on board. Of the parties included in the European innovation research, no more than 7 (!) percent collaborated on a systematic basis. Others collaborated on an ad hoc basis (44 percent) or not at all (49 percent).
The most likely reason for this is the fact that the process leading up to collaboration between two organisations is necessarily a complex one. As a rule, the standard R&D department is set up for internal innovation. Companies which want to innovate with others first have to reorganise in order to align their activities and culture with a future partner. This is an essential step, but also a significant challenge.
Many companies, 64 percent in the recent study, don’t employ people that can manage innovation and who can ensure that their companies master all the factors that can make the difference between a successful innovation and a failed one. Innovators which know how to select suitable partners and also establish the infrastructure to support the collaboration which will make one plus one into three.
Of course, it is possible to recruit innovation managers from outside your organisation. But it seems that it would be more efficient to train and coach existing employees. They already know your products or services and customers. They only need to learn how to generate and assess ideas, and then bring these innovations to fruition, focusing of course on fertile collaborations. Because when you’re looking for a partner, you want your organisation to be the most attractive option.
Author: Han Gerrits, partner KPMG/Founder Innovation Factory