How Does a Shifting Landscape of Competition Impact Innovation?
The pace of business and thus also innovation is faster than ever before. For innovators – corporate as well as start-ups – this means a shrinking window of opportunity, which also moves faster and more unpredictably than before. To counter this, some forward-thinking companies have adopted open innovation in which they bring together an ecosystem of partners in order to bring out better innovation faster.
I argue that open innovation and ecosystems bring opportunities, but this also brings a shifting landscape of competition. You no longer just fight it off with a few key competitors; now you fight it off with entire ecosystems and if your company has not yet fully embraced open innovation, it is very likely that some of these competitive ecosystems are better than those that your company is involved with.
This is a tough situation and I am inclined to say there is not much you can do in the short run. Your company really needs to change its mindset, innovation approach and culture. These elements are difficult to deal with and they require a fairly long time horizon before you see results–if any.
The Side Effects: How They Impact Innovation
This post is not intended to be about the lack of understanding of open innovation, but more about the side effect related to the shifting landscape of competition. This is a topic open for discussion and as a starter, I can share an interesting conversation I had some years ago with a competitor to P&G.
This person said that their organization was fairly pleased with their deal-flow and the innovation opportunities they saw. They just had an issue that really nagged them. It seemed as if many of the opportunities they got had already been around P&G, which decided to pass on them.
In essence, this person complained that they did not the get first look and pick; they got the leftovers; not the main meal. This company got into a pinch spot as P&G had a better competitive situation having a stronger ecosystem that allowed them to pick better partners for specific projects.
Here I can draw on my anology of open innovation as a car. The best companies (almost always the big players within an industry) get to sit in the front seat where they have a strong influence on which projects the industry should move forward and they also get to pick which companies that get to sit in the back seat as being the partners in the ecosystem. The thing is that almost every industry has 2-4 big players, but only one of them get to be in the driver’s seat when it comes to open innovation.
Another thing to consider is that open innovation brings global opportunities, but also global threats. Corporate innovation leaders must be able to manage innovation in a global and open environment. This involves two key components; search and execution. How well can your company scan and search the globe for new innovation opportunities and more importantly, how can you merge these external resources with your own organization if they are thousands of miles away? Innovation is no longer confined by geographic boundaries making the competitive picture even more complex. If your competitors are better than you at this, you are in trouble.
On a note on the above, virtual collaboration and communication tools have developed fast in the last decade and this will definitely continue as the need is growing. More interestingly, we will start to see such platforms being dedicated to innovation efforts. Again, this will turn into a game of being open for change, which in this case is about new ways of working and innovating.
When we look at the shifting landscape of competition in the lense of open innovation, this is quite simply about the opposites. Executing fast and learning fast will bring you the benefits while being slow will give you an even tougher competitive landscape.
These are definitely interesting times. Is your company up for it?
[This post originally appeared on 15inno and is republished with permission.]
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