Article: Reach out in the era of open innovation

by David Eckoff · 0 comments

X-teams image The Financial Times has a good review of the new book X-teams – How to Build Teams that Lead, Innovate and Succeed” (By Deborah Ancona and Henrik Bresman – on Amazon).

The book is about the importance of building teams with an external focus that reach outside the company for new ideas. From the article:

It is often said that the larger a company becomes, the less adept it will be at creating innovative products and services. Massive scale and corporate inertia tend to engender internal fiefdoms and bureaucracy and stifle communication and creativity.

The antidote, claim Deborah Ancona and Henrik Bresman… is to train and empower special innovation-focused and multi-disciplinary X-teams. …Such teams combine diverse expertise, communication skills, good contacts and the ability to reach outside the company for fresh ideas.

“Radical innovation is increasingly done in small and mid-sized entrepreneurial firms,” the authors write. “Add to that the increasing number of universities forming industry alliances and making money from their research,” they say, and we now live in what Ancona and Bresman term an “era of open innovation”. An era where scouting for ideas and developing close contacts outside the organisation are vital to success.

Procter & Gamble, is mentioned as an example. When P&G found its financials sliding and new product pipeline slowing in 1999, the company abandoned its traditional approach of in-house research and development and turned to the outside world for help. The traditional “research and develop” approach was replaced by a “connect and develop” strategy of working with external partners. The result: 35 per cent of P&G’s new products now come from outside the company and the company has driven impressive financial results.

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