Partnerships for Innovation

A few weeks ago I attended a talk by John Hennessy, the president of Stanford University. Hennessy pointed that universities like Stanford have always been on the forefront of solving large problems facing society. However, in considering today’s concerns e.g. hunger, AIDS, fresh water, etc., they realize that problems no longer come in disciplinary packages. Complex problems facing the world today are inherently interdisciplinary in nature and their solutions will require skills from across a wide range of specialities. To meet these challenges, Stanford is creating cross disciplinary centers staffed with professors and students from a range of traditional university departments.

While listening to Professor Hennessy, I was struck by the thought that significant problems facing large multi-national enterprises in the 21st century must also be interdisciplinary in nature. Solutions to these complex business problems will probably command an economic premium. Conversely, business problems which can be solved with a single discipline approach will probably become commoditized over time. A large opportunity is available to firms who are able to bring non-traditional cross discipline approaches to these problems. The key issue is how firms can organize the breadth of expertise necessary to solve these 21st century problems.

A week or so after Hennessy’s talk, I attended an innovation meeting where a major consumer products company presented their approach to innovation. Although this global organization has an R&D budget in the billions of dollars, they realized that they could not meet their ambitious growth goals simply through internally generated product ideas. Their internal R&D staff is in the thousands, however, the number of researchers outside the company working in areas of potential value exceeds two million. They had to find ways to capitalize on the work of the external researchers along with internal ones. The CEO of the organization set an imperative to require a significant external partner be involved in many of their new initiatives. An entire program was born, dedicated to finding appropriate partners and creating mutually beneficial business relations. It is truly amazing that this organization is willing to partner with all who can help them accomplish their business objectives, from single scientists to their biggest competitors.

Putting these two ideas together leads to the conclusion that service firms must use organizational partnerships to assemble the expertise and talent necessary to solve the corporate problems of the 21st century. Traditional organizational approaches in which services are limited to the talents of the already employed individuals will not be effective in solving these new problems. Companies need to see partnerships as a strategic imperative, not simply a tactical opportunity.

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2 Responses to Partnerships for Innovation

  1. Christopher L Wasden says:

    We see a similar phenomenon in healthcare. Traditionally, healthcare providers were organized into silos based upon speciality i.e. cardiology department, anesthesiology department, etc. However, they found that nearly all patients go to their provider for a problem that requires a multi-specialty solution and that the handoffs under the hierarchical/silo model are poor and both increase costs and decrease the quality of care.

    The solution has been to create “institutes” around certain types of disease that bring all the specialties required into one organization and one location. For example, they will have a Cardiovascular Insitute that will perform soup to nuts procedures with regards to the cardiovascular system. The same will apply for a Digestive Disease Institute, etc.

    The nature of medicine, as is the case increasingly with nearly all pursuits, requires cross disciplinary teams that are integrated to provide seemless solutions.

  2. Sarah Firisen says:

    I’m currently reading “The World is Flat” by Thomas Friedman, and he makes a very compelling case for not focusing on mathematics and engineering at the expense of art, music and so many of the other classes that are falling by the wayside in our public schools. He says that the real innovation comes from the people with cross-disciplinary skills not just the best engineers. I think the same could definitely be said within companies. Most people have a range of skill sets and interests that they could bring to the table, they are usually only encouraged to focus on the ones that meet the particular tasks in their job description. How much untapped innovative talent is out there under our noses already?

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