In a highly competitive market, and one where market dynamics are changing faster than ever, innovation is the key to long-term sustainability and success. History has proven that companies that have a culture that encourages innovation stand a far better chance at sustaining their leadership position or emerging as market leaders.
Harvey Firestone, an American businessman, and the founder of the Firestone Tire and Rubber Company once said, “Capital isn’t so important in business. Experience isn’t so important. You can get both these things. What is important is ideas. If you have ideas, you have the main asset you need, and there isn’t any limit to what you can do with your business and your life.”
Businesses recognize that. Most progressive businesses have put in place people, processes, resources, and investments and encourage a culture that fosters innovation.
Considering the fact that companies need to innovate faster than ever before, many companies now are also looking for absorbing innovation that is independently created outside their company. Smart companies recognize that they cannot hire all the smart people, and that smart and relevant innovation is also happening outside of their organization. Their efforts are therefore directed not just in innovating within the organization, but on engaging with innovations from outside as well.
By ‘outsourcing’ innovation, many leading companies have managed to minimize innovation costs and associated risks by as much as 60% to 90% while simultaneously reducing cycle times. In addition, they leverage tens to hundreds of times by internally investing the resultant savings. By engaging with innovators outside the organization, larger companies are able to look at a significantly larger pool of concepts and products, and thus are able to significantly reduce the cost of deploying innovative solutions and products for their businesses.
To enjoy the benefits of outsourcing innovation, the executives and the front-line should be on the lookout for the latest and most innovative technologies emerging across the globe and then figure out which ones they can leverage to derive the maximum synergy.
What is important is that you catch innovative companies’ young, i.e., when they are still in the startup or early-growth stage. Identifying and engaging with companies at an early stage has significant benefits for a large company, not just in monetary benefits, but also in being able to guide the product / concept design to best suit their own use case.
Larger companies who may not have the ability and bandwidth to scout for innovation independently can easily collaborate or partner with enablers in the entrepreneurial eco-system like accelerators, incubators, early-stage funds, and also the emerging online platforms that showcase startups and early-stage companies. Domain specific ‘hackathons’, mentoring clinics, and boot camps are some other ways in which larger companies can connect with relevant innovators.
Once the organization has identified which of these innovations fits into their scheme of things, there are 3 options before them:
These are interesting times, particularly for software products. The pace and quality of innovation in India has gone up significantly. At iSPIRT, we have seen the quality of entrepreneurial talent, ideas and products, improve rapidly. We have quite a few global standard companies as witnessed by the global scale acquisitions, and the pace at which newer ideas are being introduced is very encouraging. It is also encouraging to note that a number of larger companies have already connected with us to get an early glimpse into innovations. The InTech50 event is a great initiative to showcase innovation to CIOs, product leaders and VC’s that provide the platform for the innovators to springboard.