By Professor Stelios Kavadias, Margaret Thatcher Professor of Enterprise Studies in Innovation & Growth, and Director of the Entrepreneurship Centre
We know that innovation is at the core of growth and economic prosperity. Yet, the rapid pace of innovation that we see across all industries makes the challenge to encourage and facilitate innovation acute. Partly this is because today’s innovations have become so complex that one company can’t do it all; leaders need to rely on broader ‘innovative ecosystems’.
Developing this ecosystem of networks and relationships is a difficult thing to get right; it takes time, money and knowledge and requires a shift in mindset relating to how you see the world around you. But the pay-off of such an investment can be significant; it can harness bigger and better results for you and your business and rapidly increase your opportunities and market reach.
So where do you start? What are the common relationships that you find in an innovative ecosystem and how can you build on these to ensure success? What are the frequent ‘misalignments’ between big business and startup innovators?
Before we touch on those points it is useful to keep in mind the three principles of success when it comes to building an innovative ecosystem.
It stands to reason that the wider the scope of your ecosystem the higher the levels of complexity, which will in turn require more governance and management time. If you are focused on innovating in a particular area of your business then you should try and focus your ecosystem in a similar way. If you want to open up the scope and explore more widely, then do so consciously and with the right anticipation of governance and coordination costs in place; there is no such thing as a free lunch.
Setting priorities and expectations is key, both on a personal and organisational level. Be clear in your mind what you are striving for and be clear with the other stakeholders in your network; alignment of objectives is the key task here.
With innovation, achieving your goal is not a simple, transactional process. It will involve experimentation which means accepting some failures along the way. Execution within the context of an innovative ecosystem means being open to co-experiment and flexible in your acceptance of failure; no room available for blame games.
With those principles in mind, the next thing to consider is the different relationships you might expect to find in an innovative ecosystem and how these relationships influence outcomes. A lot of this depends on your vantage point; if you’re a leader within a large, multinational organisation your point of view is going to be very different to that of a founder of a startup. For those tasked with developing an innovative ecosystem within a multi stakeholder environment you may find yourself developing many different types of relationships, sometimes acting as a gatekeeper to your organisation.
On the other hand, if you are in the startup position, you may be more concerned with developing one to one relationships with key influencers in your industry. The point here is that there are many types of relationships within an ecosystem so it is important that you recognise this and understand the different priorities of the various players in the system.
By reflecting on the relationships and priorities you can manage one of the common pitfalls of the innovation process; ‘vision misalignment’. To return to the corporate leader and startup founder example you can quickly begin to see where misalignment may arise. The startup founder will be absolutely focused on their business and have very clear priorities. On the other hand, the corporate leaders will have multiple priorities and multiple stakeholders to manage and the ‘innovative idea’ so keenly promoted by the startup may quickly slip down the priority list.
No matter where you are on your journey to building an innovative ecosystem, it is important to develop awareness around relationship types, priorities and the common challenges for those you are keen to work with. The good news is there are tactics and processes you can develop to help develop this understanding; I’ll be looking at these as well as offering up some examples of good and bad practice in my next article.