Satish Nambisan

Innovation in the Emerging Markets

A couple of weeks back I had gone to Sao Paulo, Brazil to give the keynote address at an innovation conference organized by the Harvard Business Review (here is a link to the video of my talk). While in Brazil, I had a chance to discuss with the conference attendees (who were managers in a wide range of organizations—from the likes of P&G and Fiat to small tech ventures to nonprofits and government agencies) about the state of innovation and its practice in Brazil.

One of the key insights that I got from my discussions was how the lack of well-developed external innovation infrastructure (particularly, innovation intermediaries) may be dampening the flow of innovative ideas and technologies in Brazil. Clearly, the pace of innovation in Brazil has increased considerably in the last 5-6 years or so. There are more and more innovative ideas being generated - both within organizations as well as by independent inventors. And, more broadly, there is much greater extent of participation (by people from all walks of life) in innovation initiatives (the Fiat Mio project is an excellent example of this). At the same time, it is also becoming evident that many of the innovative ideas coming from independent inventors are not getting transformed into new products and services. What is holding back many of these innovations?   

I believe a key factor is the lack of a mature innovation infrastructure that could help transform ill-developed but innovative ideas from independent inventors into promising products and services. In particular, there is a paucity of innovation intermediaries such as the innovation capitalist who can play a valuable role in identifying promising ideas and making the right connections with companies so that those ideas find a home within existing organizations. True, intermediaries such as Innocentive operate on a global basis and cater to the Brazilian market too. But that is no substitute for more local or regional innovation intermediaries – who would have a better understanding of the Brazilian marketplace and the network connections with companies large and small. In fact, this is an issue that is relevant in some of the other emerging markets too, particularly in India.

While there has been considerable democratization of innovation in countries such as Brazil and India, the institutional infrastructure (read: intermediaries) needed to shepherd the process of innovation often lacks maturity (or is missing) and as a result many of the truly innovative ideas do not see the light of the day. The true scope and the extent of innovation in the emerging markets will be realized only when such institutional voids are filled in the innovation marketplace.      

From 'Firm-Centric' Innovation to 'Network-Centric' Innovation

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.   

A brief intro to my new book, The Global Brain

In this blog I will briefly describe what this new book is all about. 

Most managers are aware of the vast creative potential that lies outside their company boundaries – customers, suppliers, independent inventors, academic researchers, innovation intermediaries, and a host of other external entities that constitute the Global Brain. However, tapping the Global Brain for innovative ideas is easier said than done. There is still very limited understanding of the landscape of such external network-centric innovation or how exactly companies should take advantage of the dizzying array of opportunities to partner with external actors.

This book is to help companies address this “execution gap” in network-centric innovation. Here are a few key questions that this book addresses: What are the different approaches or models of network-centric innovation? How should companies evaluate and select the most appropriate approach vis-à-vis its particular industry and market context? How should a company prepare for network-centric innovation? What types of organizational capabilities and competencies would be needed? How should a company integrate its internal and external innovation processes? What benefits can be expected and how can they be measured? What are the implications of global network-centric innovation for companies in emerging economies such as India, China, and Brazil?

As I often tell my executive audience, each company has to find its own path to successfully pursue externally-focused innovation. What works for a P&G or an IBM may not work for your company. So it is up to you – the innovation executive – to systematically analyze the network-centric innovation opportunities out there and to identify, prepare for, and pursue those opportunities that make most sense in your company’s particular industry/market context. I hope this book will help you in getting started on this effort.

The Global Brain

I have not blogged for quite a long while - Well, it has been almost a year since my last blog! But I think I have a good excuse! - I have been working on a new book on network-centric innovation.

My new book The Global Brain: Your Roadmap for Innovating Faster & Smarter in a Networked World will be published by the Wharton School Publishing at the end of this month. The official book website is at: http://www.theglobalbrain.net.

The next few months are bound to be quite exciting -- I will be traveling quite extensively from October 2007 onwards - speaking engagements at companies, universities, etc. as well as promoting my book at various other forums. And, I hope to blog regularly during this period - reflecting on my interactions and experiences as well as to engage you - my reader - in a dialog on The Global Brain, network-centric innovation, innovation capitalist, etc.

More later ....