Monday, January 4, 2021
Yes, that statement sounds like the title of the latest “business and finance” bestseller, but it’s true—ask any major company. Problem is, “innovation” and “big business” also sounds like an oxymoron. By their very nature, large companies typically can’t foster a culture of innovation. They err on the side of reducing risks and their fastidious, cumbersome processes aren’t exactly conducive to creative thinking. This is why they rely on open innovation, a high-value-added development tool. The goal is to invest in existing start-up companies or to support intrapreneurial efforts from internal talents.
Centuries ago, miners sought their fortune during the gold rush. Yesterday’s gold is today’s virtual, intellectual, digital and scientific gems. And a plan is paramount for modern-day miners, especially as the COVID-19 pandemic is defining a “new normal.”
In a competitive environment, major groups were invested in identifying technological gems to become part of their ecosystem. This is what learning expeditions, Silicon Valley innovation outposts, start-up pitch competitions as well as sustained engagement in innovative technology and incubators was all about. What mattered was being there, meeting the right people and tapping into the right networks. Even though innovation was digital, it still took place in a physical world.
More traditionally, companies partnered with venture capital funds, buying shares or setting up their own corporate investment fund to save time and leverage network effect. There were also a number of academic partnerships through collaborations with universities (chairs, educational projects, etc.), research contracts (cf. Palo Alto Research Center) to complement internal R&D, and local lab creation.
The COVID-19 pandemic has changed the world as we know it and open innovation practices are being redefined. Let’s see how.
Nowadays, opportunities are being identified remotely, and being physically on site is no longer necessary. For instance, Telefónica is planning to send its Silicon Valley teams back to Spain—same work, just done remotely. On the plus side, and quite paradoxically, field investigation has suddenly become much broader as the focus isn’t just on the San Francisco area anymore. Powerful digital tools coupled with intelligent search filters make it possible to identify future talent, start-ups and promising projects all over the world. Companies and platforms like Topio Networks, NineSigma or Netbase quid can determine who is growing, acquiring clients and raising funds, explore feedback on social networks, and suggest start-ups matching a company’s exact technological needs.
Digital technology is taking over traditional in-person processes—contests and competitions now take place in virtual incubators. For efficiency’s sake—and if competition isn’t an issue—companies are collaborating to find clients and funding. There are even multi-corporate hackathons where start-ups work on a common theme, each focusing on their dedicated angle.
Work can be accomplished faster and remotely, plus companies are facing short-term economic pressure, so there’s no time to waste—a return is expected for every dollar invested. To reinvent itself, open innovation relies on venture building to develop in-house “gems” or inject external entrepreneurial skills into the company. While this phenomenon isn’t completely new, it’s gaining momentum with pandemic uncertainties and higher expectations in terms of innovation.
Innovation is a mindset and this is why large organizations benefit from “culture transfusion bootcamps.” Plug and Playor RealChange’s Virtual Learning Expeditions are two examples of the way companies can trigger a workplace culture and mindset transformation. Indeed, 90% of the time, open innovation doesn’t work or doesn’t work properly because corporate culture isn’t ready to embrace new ideas and develop them experimentally in a cost-effective way. Bootcamps challenge managers and senior leaders offering them problem-solving and creative thinking workshops as well as the chance to connect with entrepreneurs—and the whole experience is remote, obviously.
Will Silicon Valley remain a unique environment in a world where everyone has access to the same information? Yes, it will, for two reasons. First, innovation is a mindset, second it needs an ecosystem to develop. Silicon Valley’s ecosystem is amazingly resilient—this is still the place where start-ups grow and venture capital funding can be found. Not to mention that open innovation also needs a pool of talent with cutting-edge skills to support innovative projects—and there’s no shortage of talent in Silicon Valley.