Co-innovation, like innovation, is fast becoming a corporate buzzword. Co-innovation is a partnership with tech companies that harnesses the power of emerging technologies such as artificial intelligence and big data. This is especially true for businesses outside the digital realm.
Companies should not rush to embrace the growing trend of co-innovation in corporate America. They would be better served to remember a few fundamental principles for innovation.
As PepsiCo’s chief strategy and transformation officer, I oversee the digitalization strategy. I am aware of the potential power and benefits of new technologies. We are already using machine learning, data analytics, and other advanced technology to improve our products, processes, and systems. However, I recognize that there are limitations to “one-size fits all” solutions. This is why I encourage collaboration with external partners. Co-innovation is not without its limits. Its success hinges on a set of conditions.
I keep five core principles in mind to ensure that breakthrough solutions are possible when it comes to innovation.
Innovation is not just about technology.
It is essential to combine technological innovation with process innovation. If you attempt to solve a problem with technology alone and don’t also consider how your processes must change, co-innovation is unlikely to work. While it’s easy to get caught up in the latest digital capabilities, these capabilities will fail if existing systems or behaviors don’t allow for them.
Change management is vital.
Groundbreaking solutions are likely to shake up the status quo. They will also impact multiple systems and departments, so co-innovation projects need sponsorship from the highest management levels. Because of the wide-reaching impact of these solutions, co-innovation must also be managed by cross-functional teams. A better solution will be found if there is broad support and input throughout the development phase. This will help to ensure that it is adopted across the organization.
Co-innovation is not just for experimentation.
Innovation is not about creating a proof of concept. The best use of co-innovation is to solve specific business problems. Start with a north star representing where you want to go and work backward.
However, this does not mean there isn’t room for creativity and imaginative thinking. Because co-innovation is about solving complex problems, creativity is required. However, to focus the blue-sky energy, there must be a business problem.
Make space for conflict.
The structure of your partnership is crucial for co-innovation. The “two-in-a-box” approach is the key to a successful collaboration. This means that every resource or expert of our partner is paired up with one from our team. This allows them to learn from each other and challenge one another. While your partner might have technical expertise, your team may have a business and operational experience. The realities of the ground are often very different from theories and software.
At every stage of the process, you should question both the reasoning and the quality solutions. It would help if you achieved far more than you could as an individual. This is what separates co-innovation and innovation.
Your partnership is only as strong as your partner’s.
Both sides need to be open-minded and willing to work hard. Both sides must also help contribute resources pro bono for the project to succeed. Viable solutions can lead to growth for your company, profits, or additional funding for your partner. The proper incentive structure will increase trust and transparency, which are essential for a successful partnership.
These are not rules. They are guidelines for how to approach innovation. When done correctly, it can be an enormous growth lever that generates exponential gains by solving the most challenging problems in your company’s business. Co-innovation is only possible when you have a sense of humility. This means that you must be open to accepting your limitations and allowing a partner to help you overcome them.
