Technology Renaissance Re-Enables Spirit Of Inquiry With Co-Innovation

Vasanth Kumar

Digitalization eases and complicates our business environments simultaneously. To tide these waves, organizations need to become capable of continuous innovation. Taking it one step further, the concept of co-innovation comes through as a disruptive force to help foster an ecosystem of open-minded and inventive organizations capable of creating game-changing solutions. So how do you become one of these?

In his 1997 commencement address at Morgan State University, President Bill Clinton encouraged students to “imagine a new century, full of promise, molded by science, shaped by technology, powered by knowledge.” The dawn of the 21st century brought newer challenges for companies.

Fiercely competitive markets and diminishing margins forced some companies to reexamine their strengths and competencies and revitalize the core of the business to remain relevant. Other conventional players chose to look inward and grow their core capabilities based on in-house knowledge and innovation. Ultimately, businesses with a high innovation quotient survived, and thrived. Those that made perfunctory attempts at acquisitions to sustain momentum managed to stay afloat, but still had difficulties in addressing their market needs.

Clearly, the realities of the new business economy are different. The business landscape has changed, and companies are tackling digital transformation as a way to meet customer behavior and expectations and to face new economic realities. Adoption of existing or emerging innovative digital technologies, such as the Internet of Things, blockchain, and artificial intelligence, is on the uptake. To do this today, it is prudent to join hands with co-innovation partners to accelerate this transformation journey in a strategic way. This means organizations once again need to revisit – and possibly reimagine – their digital transformation strategy and driving growth.

Today’s companies can either choose to grow organically, through acquisition, or a combination of the two. However, in the era of accelerated growth, it is imperative to also explore a new dimension – one of collaboration, as a way to create additional impact for revenue and profit growth through social and ecosystem involvement.

Co-innovation provides new dimensions for transformation

In today’s highly digitized and connected world, knowledge does not remain the asset of any particular department or organization. It has become a free, shared, and distributed resource. I believe that in today’s “knowledge and distributed intelligence economy” no single company, irrespective of its size, can claim dominance of the creative and skilled workforce.

It’s also important to consider that this widely distributed knowledge is not limited only to our employees, but could also reside with our partners, customers, competitors, and academia. While the changing landscape may compel companies to effectively harness in-house knowledge, it is also necessary for them to look beyond the company walls.

That’s why this integral approach of seeking ideas internally, and supplementing them with external innovation and concepts is becoming central to developing new solutions, addressing market needs, or even creating new ones. Quite simply, this calls for new ways to connect, collaborate, and innovate.

My advice, therefore, is for organizations to essentially deconstruct their existing mindset and transition to a new one that is driven by a strategy of enabling external collaboration.

 A need to transcend boundaries

The exercise of breaking down existing business boundaries and redrawing new ones is not a simple one. Connecting and developing means companies need to foster an open architecture that allows a continuous flow of ideas from anywhere and at any time. A good example is Procter and Gamble, which has set up a measurable target of achieving 50% of innovations from external ideas.

But here’s the wider challenge: While many organizations have experimented with the approach of innovating from within, the same readiness has not been evident for engaging with the external ecosystem. Often, the lag comes from the fact that developing ecosystems require clear leadership directive and an inspiring vision. Unless leaders spearhead a disruptive approach to innovation goals and reinvention, we will continue to see a mismatch.

Let’s also look beyond growth for a moment and consider another benefit of the collaborative approach: problem solving. By involving multiple partners in deriving a solution for a complex problem, organizations can reduce the risk of doing the wrong thing, or worse, doing nothing at all. Working on the problem from a variety of angles and perspectives and leveraging a diverse pool of experts, can result in unique, invaluable, and inimitable solutions.

Coupled open innovation is the new mantra of the corporate world

American organizational theorist Henry Chesbrough states that open innovation is a more profitable way to innovate because it can reduce costs, accelerate time to market, increase differentiation in the market, and create new revenue streams for the company.

Quite right. Many key companies, including names like Akzo Nobel, P&G, Lego, GE, SAP, and Unilever, are now reaping the benefits from their open innovation journey. Taking a cue from these leading organizations, it is pertinent for companies to ask themselves these key questions:

  • Is my organization ready to leverage co-innovation as a key performance lever in the growth strategy?
  • Can we potentially tap into the knowledge and insights of our external ecosystem, to advance technology and charter new routes to market?
  • Can we, as an organization, build trust and confidence, and inspire the ecosystem to make a success of the co-innovation strategy?

If your answer to these questions is yes, then your organization is poised to embark on harnessing the true potential of co-innovation.

Also remember, co-innovation was not born in a day. It has been part of an evolutionary process of innovation, transitioning from closed to collaborative architectures, including open and co‐innovation approaches. With digitalization playing a double role in our environments today, an inspirational and creative leadership approach can create an organization capable of co-innovating continually over time.

For more on the role of leadership in digital transformation, see Business Intelligence Emboldens Digital Transformation.


Vasanth Kumar

About Vasanth Kumar

Vasanth Kumar is the head of SAP Co-Innovation Lab, Middle East, for SAP. He is fostering co-innovation with ecosystem and bringing success in the region for SAP. Vasanth brings over 27 years of rich and blended experience with the manufacturing industry and enterprise business software to create value for customers, partners, and startups by driving strategy and achieving execution excellence.