Holistic Innovation Ecosystem

Traditionally, companies favour a closed innovation approach, where innovation is developed in-house and IP is rigorously protected as a source of competitive advantage. However, there are number of key drivers that call into question the logic of this approach in today’s world:

• Technology, digital and social networking are connecting us in new ways, enabling us to collaborate more and better
  
• There are more skilled workers in more places, and they are more mobile than ever
  
• Companies can no longer maintain large R&D and innovation budgets
  
• An unrelenting pace of change makes it riskier to rely solely on in-house capabilities and lengthy innovation development cycles
  
• More active consumerism – Consumers are more accustomed collaborating and participating in the innovation process
  
• Competition isn’t letting up, and trusted brands are stretching into different sectors
  

Successful innovation normally stems from insight, or learning something new that is valuable and actionable. This only happens when our perspectives are challenged. The more perspectives we have, the more learning and insight we will get, and faster. Similarly, we rarely have all the capabilities and assets we need in-house (let alone in one part of the business) to deliver innovation. Going back to first principles, an idea that doesn’t see the light of day is not innovation.

The implication is that it is now possible to involve more parties in your innovation activities and doing so can result in better, faster results. This requires a more holistic innovation ecosystem, one that accesses more employees from outside business silos and more parties outside of the organisation. A holistic innovation ecosystem can draw on entrepreneurs, start-ups, customers, partners, venture capital firms, academic institutions, government bodies, and many other parties. It’s not about involving everyone, but rather about selectively involving those parties who can help you achieve your ambitions. It can require planning and a lot of change, but there are many possible benefits:

• A higher innovation success rate
  
• Efficiency and improved ROI
  
• Speed to market
  
• Risk reduction & risk-sharing
  
• Monetisation of shelved IP
  
• Brand trust, advocacy and engagement
  

In summary, we need a more holistic innovation model that will work harder for us in today’s world. We need to reconnect it to our organisations’ purpose and strategy. It needs to filter enterprise-wide throughout the organisational value chain so that every part of the business is innovating to contribute to the company’s purpose of creating and capturing value for all stakeholders. We should reassess our innovation portfolio strategies and widen our innovation ecosystems to get better, faster results. In future editions of Innovation Quarterly we will explore holistic innovation in more detail and pick up on how organisations can go about designing and implementing holistic innovation systems.
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