How Collaboration and Open Innovation Builds Businesses and Industries
Internal business strategies, collaboration techniques, and innovative approaches typically fall under the umbrella of all-things-confidential — after all, that’s why they’re internal. But the internet has made the quick and widespread dissemination of information accessible to pretty much anyone, and since it’s not so easy to plug up digital leakage, today’s companies have to learn to take advantage of how collaboration and open innovation can help build businesses and industries.
B2B Collaboration and Multi-Channel Consumers
Business-to-business collaboration used to be a strategic choice, and one only very carefully executed by companies with several layers of backup and protection in place. That’s not the case anymore; increased operational complexity and marketplace demands are shoving organizations together out of necessity, and resistance to these types of partnerships can be costly.
According to research conducted by the Aberdeen Group, 83% of industry leaders (defined as companies with a gross margin of 27.9%) have B2B collaboration initiatives in place, over half of which have been implemented in the past two years. A big part of this migration is being caused by the rising need to respond to multi-channel customers, who demand fluidity across different customer support mediums, whether they’re online or not, 3rd party or direct. Companies have the opportunity to reduce costs and protect resources by knocking down the blockades that typically exist between them and their channel partners, manufacturers, and the like. Unfortunately, it’s not as simple as identifying a liaison or trying to collapsing responsibilities — it requires streamlined communication, trust, and transparency.
Unlike open source practices, which “promote access to the design and production of goods and knowledge,” open innovation addresses the much larger issue of disruptive changes in the global marketplace. The approach surrounds the idea that internal research and development just doesn’t cut it anymore, and being tight-fisted with ideas is beyond difficult — it’s detrimental.
Says Andrew Gaule, an open innovation expert and director of the H-I Group, “If you sit on an idea, you’re likely to have it stolen, duplicated or rendered obsolete long before you develop the competences and capabilities needed to unlock its true value.” Because open innovation is a collaborative practice, understanding the fundamentals of high-level partnerships — things like clear communication, authenticity, asking questions, embracing failures, and focusing on outcomes — is imperative. Determining the unique value, individual investment, and financial implications of each organization’s participation is also key to successful and beneficial B2B partnerships, and should make their way into risk assessments early on.
The End Game: Better Businesses, Improved Industries
Moving from company-level team collaboration to industry-grade, business-to-business sharing can seem like a quantum leap for organizations unprepared to disclose strategic plans. But it’s important to remember that, in the larger industry ecosystem, success often relies on balance and interdependence among partners and potential partners within the larger system. Businesses that connect have access to a much wider range of resources, ideas, talent, and even budgets. Collaborative research allows internal efforts to refocus on things like product development; experimentation and A/B testing stops being so risky and expensive. Companies can practice innovation in the same way that they preach it, and organizational culture will reflect that.
Collaboration contributes to better business, and better businesses effect positive changes that will echo throughout any industry, promoting growth, customer satisfaction and retention, and smarter innovation.
In other words, there’s power and profit to be found in synergy that simply can’t be unleashed behind closed doors.