Innovation arenas and outsourcing

Innovation arenas — where innovators, entrepreneurs and intrapreneurs collaborate across boundaries to create magic — have become an important ingredient for successful innovation. All enterprises are part of complex value chains. There is only so much improvement and innovation that can be done by a single actor. These innovation arenas allow people and enterprises to collaborate in a practical manner to make innovation happen.

Innovation in the greenhouse

Someone probably said that “An idea is the seed, and innovation is the plant that grows from it” or at least something very similar. We all know that ideas are cheap, worthless even. Getting rid of the bad seeds and finding the good ones are an important part of innovation work. Fail fast has been promoted as the way to do that.

If it is so hard to find the right seeds, then we need to make an effort to find them. Gene Hughson has pointed out, as a part of our ongoing conversation on innovation, that the past is an excellent place to find the right innovation seeds: “What’s old can be new again.” Other places to look include up and down the value chain. In fact, successful companies need equal focus on their suppliers and their customers. Many good seeds come from academia, other sectors or even from employees in your own company. The key problem is seeing them, because they often hide in plain sight.

Having found the right seeds, we need to make sure that they grow into healthy plants. Unless we are willing to take the risk that the innovation ends up like Tay, we need to make sure that our innovation has a safe environment to grow up in. We need some form of innovation greenhouse.

In summary, we need a way to

• Connect with good ideas
• Find the best ones
• Make sure that they grow strong enough to stand on their own and
• Continue to prosper.

Innovation arenas

Innovation arenas can meet all of these criteria. An arena can be:

• A marketplace that connects enterprises with ideas
• A safe place to see which seeds germinate and take hold
• A greenhouse for the best innovations to grow strong enough to survive in the wild.

Beware of cargo cult innovation arenas

I say can, because we always have to be alert for cargo cult innovation. Just as in any other field, there is always a risk that we take all the right actions but get none of the results we desire. Some people will say that this happens because we lack understanding of what we are doing. I think it is more complex than that. The universe cares very little for our intentions and very much for our actions. Obviously, actions without intention tend to be random but beautiful results can emerge even from mindless action. There are many other barriers to making things work such as our limited cognition and how we tend to govern ourselves by vanity metrics.

Are Vanity Metrics Statistically Valid? https://t.co/u1hjAMEbcC pic.twitter.com/oHYZZzfDnF

— Thomas Cagley (@TCagley) November 29, 2016

Innovation arenas in practice

Sweden is the second most innovative country in the world, according to WIPO. Skåne, or Scania in Latin — the southernmost region of Sweden and where I live, is no exception. The offical regional innovation and entrepreneurship board lists seven active innovation arenas and innovation clusters.

Many years ago, I was the project manager for creating another form of innovation arena — Testplats Botnia — an arena for companies with innovation seeds that had already grown into seedlings but needed to be tested in the real world. Since then, I have learned that you do not always need a large innovation arena to make things happen. Sometimes it is enough to simply sit down and do the work. Let each party bring their own network to the table and let innovation happen without further ado. Just like Kenneth Verlage and I did. Watch the video below to find out more.

Innovation outsourcing

In my work with outsourcing and innovation, customers often come back to one thing: “Can you help me be innovative?” As I mentioned above, successful companies need to care just as much about their suppliers as they do about their customers and their employees. A basic level is often that outsourcing contracts include innovation clauses. Traditionally, these innovation clauses have covered improvements and stepchange innovation to the outsourcing service as such. A first step towards true innovation that goes beyond improving the service is to connect the outsourcing provider directly with the business. The internal IT department needs to take a step back and mediate the conversation rather than being a conversation intermediator.

Outsourcing partners in innovation

An outsourcing partner can help a lot with an innovation arena. Some obvious contributions a partner can make are physically hosting the arena, supporting inspirational seminars and facilitating innovation days. Here are some other ways an outsourcing partner can make innovation happen in an innovation arena:

• Bringing their network of people, partners and customers to the arena. Because of the power of network effects, all will benefit based on the strength of the network that each party brings to the table.
• Supporting digital innovation means supporting developers. In a digital world, enterprises do not only collaborate through discussions and correspondence between people or by exchanging goods and services with each other. In a digital world, companies collaborate through code. Some people call this the “API economy”. It takes skill and experience to do the API economy right. It’s not just about being developer friendly. It also has to provide a win-win situation for partners that collaborate. Regardless, outsourcing companies has the cross-customer and cross-sector insights to help do this right.
• Innovation is not a surface level phenomenon. Doing as if it were will not give any long term effects. It is just sprinkling fairy dust on a dull board game. Real innovation involves changes in the core systems of the enterprise. The very same core systems that the outsourcing partner has taken responsibility for. Unless the customer of the outsourcing company plans to run innovation the slow way, through formal change requests, the outsourcing partner needs to be there. The partner needs to be active in the arena, at the sharp edge of innovation.

Flash flood innovation

When parts of England were severly flooded for weeks a few years ago, the responsible government agency wanted to make innovation happen and fast. They wanted to create an instant innovation arena. Part of the solution was to make flood data API:s more widely available. Part of the solution was to run a hackathon with partners and interested parties. The success of this innovation arena has since prompted many similar efforts. I do not believe this would have been such a success if the agency’s outsourcing partners had not played an important but perhaps unsung role in the arena.

Part of a series

This post is part of a series. Gene Hughson and I have exchanged blog posts and videos on innovation for over a year now. In the previous post, Gene wrote about “managing fast and slow” in innovation, about the strategic and tactical aspects of innovation. This post has been about innovation arenas, one way to create a structure that supports innovation whether it is fast or slow.