Those who live by the sword get shot by those who don’t

The need for companies to innovate and embrace disruptive technologies, products and services has never been more important than at present as we emerge from the current recession. The recent economic crisis has been ?game changing? and organisations that simply expect to pick up from where they where a year ago may find new agile competition invading their market place. This is because new organisations are not burdened by old paradigms and structures and can more readily exist in smaller emerging markets, while more established organisations are tied to less appropriate structures.

But why innovate if your clients are once again placing orders for product and services in ever increasing volumes. Professor Ian Philips of ARM and visiting professor at Liverpool University, confirms that half of the revenue earned by a technology company in five years time will be from things they have no knowledge of today. In other words if an organisation does not research new innovative technologies then its revenue will only be half of what it could be in five years time.

It is accepted that this five years will vary from industry to industry, but the principle remains the same and those that do embrace this principle and make a real investment will prosper and ultimately take market share from those who don?t.

We can not imagine things of which we have no knowledge

? Much less can we have capability in things we do not know about in any depth. Every organisation is limited by its own internal paradigms which constrain its ability to think truly ?out of the box?. External collaboration is therefore an essential part of any innovation process. It opens the path to seeing problems and concepts from completely different angles and makes us aware of previously unknown opportunities and solutions. It therefore enables organisations to break out of long held paradigms that were restricting their expansion.

Given that it is the capabilities of the people in the companies, managers and employees alike that are key to the development of new products and services, then unlocking the creative energy of employees in all areas of the company will present the organisation with new opportunities. Collaborating at the individual employee level broadens perspectives and allows for creative input outside of the organisation?s normal perspective. Through collaboration an organisation may become aware of new markets for its existing technology base or just as importantly new threats to its existing markets.

But as every manager knows the skill is in managing creativity effectively. It is so easy to go to extremes with valuable resource being used on ideas which are simply never going to be strategic to the organisation. Or the opposite where creativity is so controlled that the only ideas that ever make progress are simply ones that provided incremental advances to an existing product or service. Developing a management process for this early creativity and for investment in things that may not have an immediate market calls for a different approach to the process normally used for evaluating investment decisions. Investment has to be filtered, that is a commercial fact of life, but the key is to develop strategic thinking that embraces new possible scenarios that may emerge. These scenarios may involve accepting the possibility of new cost structures or margin levels that are unacceptable today. Recognising that entry into new markets may involve structural change in order to allow for future business development to take place.

There is help

So how to collaborate? organisations may simply decide to collaborate on a pure commercial basis or find mutual value in sharing work in a particular field. However in Europe there is a culture of collaborative research that is supported by national governments and by the European Commission with investment from taxation. The UK government runs its own technology programmes with investment in the hundreds of millions but the EU has its flagship Framework programme with a seven year budget of over 50 Billion Euros. The programme covers ten thematic areas from aerospace to ICT and the bio sciences. Thousands of companies participate every year when the Commission ?calls? for proposals. The programme is especially generous to small and medium sized companies with up to 75% of any research costs being reimbursed.

However the main benefit of participating in these programmes is the way they bring organisations of all sizes and nature together in a collaborative adventure, sharing ideas and working towards exploitation of new products and services.

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