Why Your Open Innovation Project Will Fail Without These 3 Key Steps:
Fariza founded Trusted Inc. 4 years ago to directly connect decision makers in Japanese and foreign companies, online. The company was born out of her vision to make borderless technology innovation a possibility for companies worldwide.
Here are the three key take-aways from the interview on how your Open Innovation project can become a success.
Fariza, tell us a bit more about your vision.
Fariza : I see the future of open innovation in radical cross-border, cross-industry collaboration. This is why I founded Trusted Inc. Over the last four years, we specialized in directly connecting Japanese corporations with international start-ups. But we soon found almost everyone seems to encounter the same obstacles over and over again: Open innovation projects didn’t get completed, negotiations stopped halfway through.
So, I decided to conduct a research to find the reason for this.
How did you research, what flaws hamper the open innovation process?
Fariza: Trusted conducted surveys across a large number of companies as well as interviews with high-level decision makers. In the analysis, three main reasons crystalized from the data.
Fantastic, could you give us more insight on the three obstacles to open innovation, one by one?
Fariza: Absolutely. The first reason is a very simple one: The start-up to collaborate was not selected carefully enough.
There are thousands of start-ups all over the world and corporations are having a hard time to dissect the market. For this, many are already using consulting firms or agencies to connect them to the right start-up. Yet, we found the criteria applied to the search are often too broad to pinpoint an ideal partner.
Alternatively, their searches leave out important criteria. For example, how the startup technology can be integrated with their existing technology, and what stage the foreign company is at: Is it still a start-up or already established? What industries do they specialize in? Which country do they operate from and does their vision, mission and work culture mesh with that of the Japanese corporation? These factors can become crucial for a successful project.
So what can corporations do to solve this issue of finding the perfect partner company?
Fariza: We recommend pin-pointing your partner criteria with a plethora of start-ups out there, be very specific to get as close as possible to your ideal match.
Further, as filtering thousands of start-ups against dozens of criteria is tedious and time-consuming to conduct in-house, consider using a connecting agency. But make sure they specialize in the field often connecting start-ups for open innovation. During our survey we found that many companies had spent considerable amounts of money on hiring consulting agencies, but did not achieve desirable results as the matching criteria by the vendor were not customized to the client.
At Trusted, we specialize in exactly this and have built a large database with more than 5000 start-ups that can be systematically searched using clients’ custom criteria.
What is the second issue you found in the open innovation process?
Fariza: Again, it seems to be so obvious. Make sure to have completed the planning stage of the project inside your own company before approaching start-ups.
During our survey, we found that the planning stage was often not completed while corporations already approached potential partners abroad. This led to two problems: The department or subsidiary spearheading the project already embarked into negotiations, but then couldn’t get the project approved by HQ or their higher ups.
Not only did this mean that the time spent on negotiations was wasted, in addition this might also leave the foreign start-up as they started investing energy in a project that never materialized.
Surely an uncomfortable place to be, having to quit negotiations halfway through. Any more tips on this?
Fariza: Sure. Please make sure to 1) have a clear goal and vision before entering negotiations and 2) to only start forming relationships if your project is approved. Otherwise you might burn bridges before they were even built.
A final tip is to not only clarify the final goal, but also formulate a step-by-step plan of the project, down to who will be responsible for individual tasks. Such a roadmap can heighten your chance of gaining approval as well as also facilitate efficient negotiations inside and outside your company.
For this, Trusted offers their clients an Innovation Readiness Assessment. It will give you a clear answer if your company is ready to successfully enter open innovation negotiations. We understand the steps, incentives, and vision behind open innovation and not only offer blueprints, but can also consult with different departments within your company to gain approval of our tried and trusted plan that delivers results.
Finally, such a plan will also facilitate negotiations with your future potential partners and reduce the risk of negotiations ending halfway through.
That was very helpful. What is the final obstacle to successful open innovation?
Fariza: While we encounter much enthusiasm within Japanese companies to enter open innovation, we also often find that while an open innovation team is assigned, corporations fail to involve other departments. Open innovation needs to collaborate with teams in e.g. R&D, sales and logistics, but if these aren’t assigned in advance, they often don’t see the incentive and collaboration becomes an issue.
As a start, ask yourself the following questions: Do I have English speaking staff to connect with foreign partners? How many people and what skills will my team need? Do they need training, what kind of training and who can conduct the training? For how many years do you expect the project to run?
Again, a consulting firm can help with outsourcing these tasks to them or with locating them inside your own company. Trusted can deploy a team for you with the skills and connections needed to start your open innovation project. Parallel to that, we help you prepare for the project internally.
We recommend consulting with an experienced firm that can help you locate the right resources inside your company, while they fill in the missing links for you and kick the project off.
Thank you, Fariza. That was really enlightening. Any closing words on global open innovation?
Fariza: Helping you take these three obstacles with grace are the main reason why we founded Trusted Inc. By mastering these, our research shows that we can assist Japanese and foreign companies to the highest and best use. They enter successful partnerships that deliver results with less risk and in shorter time.
From data analytics to a well-connected network and consulting, we deliver the full package and will accelerate open innovation together with you, all the way from the first step to the completion.
Writer: Mareike Dornhege