There was a conference held last week at the Wharton School on Network-based Strategies and Competencies
(organized by Prof. Jerry Wind of Wharton and Prof. Paul Kleindorfer of INSEAD).
It was a very interesting conference (some of the best minds in the business
were there including C K Prahalad who was the keynote speaker) and a number of important and
challenging network-related topics and issues were discussed.
I was one of the invited speakers at the conference and the focus of my presentation was on the challenges companies face while shifting from a firm-centric innovation model to a network-centric innovation model.
The benefits of looking outside for innovative ideas and partnering with external innovation networks – for example, customer networks, inventor networks, academic researcher and scientist networks, etc. – are quite evident to most companies. However, making such a shift from innovation initiatives that are centered on internal resources to those that are centered on external networks and communities – i.e. a shift from firm-centric innovation to network-centric innovation – is quite challenging and complex.
As recent examples from companies such as P&G, Boeing, Sun, Staples, IBM, and Apple illustrate, such network-centric innovation can take many forms. There are different types of entities that companies can reach out to (including new types of innovation intermediaries) and many different types of relationships and networks that can be developed to harness innovative ideas.
Thus, the point that I emphasized most in my presentation (and which I think resonated well with the attendees) was the importance of a company’s context in evaluating its network-centric innovation strategy. A company has to develop a deep understanding of the various external innovation networks that exist and relate them to its own unique market and organizational context. Only with such an understanding can it position itself appropriately in the landscape of network-centric innovation.
In short, CONTEXT MATTERS! And, acknowledging that is the first step towards success in network-centric innovation.