12 April 2017

Startups and Strawberry Rhubarb – Why Open Innovation is a Necessity for Big Business.

I see my friend Josh each year around the holidays. The thing about Josh is, he doesn’t like pie. Every November, we have the same conversation. He says, “It’s too sweet”, “It takes too long to make”, and even “I eat cookies for dessert all the time. Why change it up?” In my mind, Josh is crazy… seriously. Who doesn’t like pie?!

Right from the start, we can logically reject all of Josh’s excuses. Pie doesn’t have to be sweet. There are salty meat pies, umami pecan pies, and even tart rhubarb pies. Next, we admit that baking a pie takes longer than most desserts. First you have to pre-bake the bottom crust, then you make the filling. If you want a fancy pie, the top crust alone could take you an hour (we’re partial to the lattice design). While you might think Josh has bested us in our annual debate about pie, let us look to the bakers of the world. Why spend hours baking a pie when you can go to a literal pie expert?

To us, pie is like open innovation. The strategy itself is an open ended enterprise approach to advancement that leverages bakers… sorry… startups and their products. Large companies like GE and Coca Cola have a goal of selling their products and services, but have found that sponsoring large research and development programs can be inefficient. Rather than relying on the brains in house, they open up their innovation initiatives to the world, where startups – who are experts in their fields – provide the tools necessary to push them forward.

 “Powerful levers of competitiveness are [at work], and are actionable through new pathways of collaboration… Coopetition, a collaboration between competitors, [has become] a necessity in the race to innovation… Large companies need catalysts [and partners] in the form of innovative startups or academic partnerships to be an integrative part of their strategy.”

                          – Ronan Stephan, Scientific Director at Plastic Omnium

Startups are constantly coming up with new recipes, mixing new ingredients, and baking pies that larger companies can then purchase without the costly initial investment. Those startups went through years of perfecting their flour to baking sugar ratios, validating their recipes at bake offs and against their rival bakers, and doing all the dirty work that, at a larger scale, would cost larger companies significant energy and capital. By essentially outsourcing development, end users, managers and decision makers can remain experts in their products and services, while their open sourced army of thinkers help smooth out the problems that have already been identified.

If I gathered thirty of my friends and we started listing pie flavors, I doubt we’d make a dent in the number of possibilities that exist. Using the experience and expertise of the world to solve problems that would otherwise be tackled by a small team isn’t just cost effective – it makes plain sense. R&D teams usually are too close to the problems they work to solve. This fogs up the optimal open brainstorm that devalues the entire process. By utilizing people who are unburdened by expectations and other organizational constraints, solutions become simpler, more streamlined, and so are able to be tailored to enterprise specific issues.

Startups

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