De-Risking Corporate Innovation by Using Suppliers
In this column we have analyzed why it is nearly impossible for Corporate Innovation teams to successfully commercialize new products, services, and business models both within and outside of their core business at length.
The risks alone make Legal and Brand departments quake, quiver, and fight against these innovations. The use of new channels, new materials, or partners makes product managers reject an innovation concept over me too products for which they understand the path to market and have paid to have 100s of pages of market research. Then, there are Executive land mines in Gate Reviews, etc.
After a company has moved into a mature phase, it is a surprise that any innovations make it to market given these factors.
Here’s a too little to help you with this Enterprise-level struggle. You don’t have to do it alone.
In fact, with some guidance, metrics, and goodwill, as well as old-fashioned persuasion, you can liberate those many commercial engines that already work on your behalf, the legion of people who depend on your business to thrive, your suppliers.
Here is what I am saying put plainly: demand that your suppliers innovate for you.
Bake it into their metrics that they will find new, open needs in the market, create new solutions that have sustainable competitive advantage, and find new, novel ways to commercialize these solutions on your behalf. Ask them to tech scout from adjacent markets and find materials you can apply to your category for novel purposes. Encourage them to find market insights, test new concepts, and to push the boundaries on your category.
Leverage your supplier network to accelerate the pave of innovation within your category. Think about all of the suppliers you have—packaging, technology, parts and materials, industrial designers, brokers, distributors, and supply chain, for example.
Now envision giving each a metric each year that would provide you insight into parts of the markets where you may have blind spots. Another metric could be creating new solutions (new to the market) that pay off that insight. Perhaps they can test the solution with various market segments before bringing it to you in a small pilot, where things like pricing and demand can be vetted in a real-world context.
If the preliminary tests go well, you can set it up where you can have exclusive rights for a set period of time.
Suddenly, you have two major wins. You have your suppliers bringing more focused, strategic value to you. You have also grown your innovation efforts without investing in full time resources.
Most valuably, you have taken a lot of internal risks—reputational, legal, brand, channel conflicts—out of innovation equation. These smaller firms can afford to be more adaptive and can follow opportunities in the speed required to be first-to-market.
This model of supplier-led innovation can we a win-win for both organizations. It requires good metrics, deeper collaboration, and trusted partners. Pick a partner and see how it can work for you.
Image Credit: Pixabay
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Michael Graber is the managing partner of the Southern Growth Studio, an innovation and strategic growth firm based in Memphis, TN and the author of Going Electric. Visit www.southerngrowthstudio.com to learn more.
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