Collaborative innovation is the process of developing new products, services or ideas through collaboration. This collaboration may be within an organisation, but the term is more generally used for efforts involving several organisations, or stakeholders from beyond the initiating organisation. Examples include co-creation projects with customers or suppliers, partnerships between several organisations, or crowdsourcing and multi-contributor projects.

The thinking behind the concept of collaborative innovation is to harness the power of groups, and particularly the power of diverse groups, to create something new. It requires a different way of thinking and approaching innovation. In particular, it needs an understanding that customers are not just consumers, but can be actively involved in shaping products.

Defining Collaborative Innovation

Collaboration is working together, and innovation is the process of creating something new. Collaborative innovation is therefore the process of bringing people together to create something new.

Put like this, collaborative innovation sounds like ‘business as usual’—and to a certain extent this certainly should be true. In any organisation, people will need to be working together to innovate. However, formal collaborative innovation is distinguished by bringing in more people, with more diverse backgrounds, to generate and deliver ideas. It therefore generally involves more than one organisation, or people from beyond the original organisation.

The thinking behind the concept is to create something new by bringing together different perspectives. Collaborative innovation is therefore more of a culture than a process.

Companies that embrace collaborative innovation have processes to enable people from across the organisation, and from outside, to work together, propose and vet ideas, and create new products or services. They will draw on techniques like co-creation with customers or suppliers, learning from competitors, and bringing in people from other industries to provide a new perspective.

Why Focus on Collaboration?

It is fairly obvious that companies need to innovate. They need to refine their products and services to address changing markets. If this doesn’t happen, they are likely to fail—witness Kodak and its focus on film, ignoring the arrival of digital photography.

The real question when thinking about collaborative innovation is therefore why collaboration?

The answer is that when done well, groups can be significantly stronger than any individual on their own. Groups can compensate for the weaknesses of individuals, and draw on a wider range of skills and knowledge.

There is more about this in our page on the Strengths and Weaknesses of Group Working.

Collaboration therefore makes sense to improve results of innovation processes.

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The Importance of Diversity

However, there is a caveat to the value of groups.

There is growing understanding that diversity in teams and groups is essential to achieving success. This is a driver behind the concept of involving wider groups of stakeholders.

Groups with a more diverse range of backgrounds, knowledge, skills, and ages are more successful. Organisations with more diversity among their staff, and particularly their higher level employees, are significantly more successful financially than those with less diversity (and there is more about this in our page on Diversity in Teams and Groups).

There are two main reasons for this.

1. More diverse groups are more likely to come up with a wider range of ideas.

   When you have people coming together from different backgrounds, they bring different views and ideas. Being exposed to people with varying backgrounds can help to broaden our thinking—and therefore spark even more ideas.

2. More diverse groups are more likely to spot potential problems with ideas.

   Sometimes you hear about a corporate decision that is so obviously wrong that you wonder how it ever got through the decision-making processes. The answer is often that the decision-makers were too similar. They simply didn’t see the potential problem. A more diverse group of stakeholders can often spot potential issues more quickly because of their wider experience. In a nutshell, diversity reduces blind spots.

It is therefore essential to involve a wide range of stakeholders in an innovation process—hence the idea of involving customers and people from beyond the immediate industry. This allows organisations to take advantage of new ideas and perspectives that would not otherwise be available to them.

Creating the Right Culture

How can you create a culture that will support collaborative innovation?

Research from MIT Sloan suggests that there are three key practices that more innovative organisations follow. These are:

1. Creating tools that allow everyone to communicate strategically about innovation. For example, some companies have a template for proposing ideas, which can be submitted by anyone in the company.

2. Vetting and refining ideas on an ongoing basis. More agile organisations review innovative ideas on an ongoing basis. This allows them to be refined and if necessary, abandoned, before resources are wasted. Our page on Idea Validation provides more information about this process.

3. Focusing on ensuring that those closest to customers get resources. The most innovative companies recognise that those best placed to innovate to meet customers’ needs are those closest to customers. Ideally, top leaders should focus on these employees, and ensure that they get resources to enable them to innovate.

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A Final Thought

Perhaps the most interesting aspect of collaborative innovation is why it is not more common.

The benefits of diversity and collaboration are now so clear that is hard to understand why more organisations do not embrace these practices.

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