- While Olay has long been
a Procter and Gamble beauty care brand,
over a decade ago, Olay Regenerist
became one of its most successful products.
This happened through a collaboration
with a French company, Sederma,
which developed a chemical compound
that helps rejuvenate
and repair the skin from the inside.
P and G had no prior experience
with this type of compound
and would almost certainly not have developed
Olay Regenerist had it not been
for the partnership with Sederma.
Procter and Gamble considers Olay Regenerist
one of many new products to emerge
from a relatively new approach to innovation,
that is, collaborative innovation,
which has dramatically boosted the company's pace
of new product development.
Today, P and G openly spells out
its innovation needs on its corporate website
and invites anybody to submit
a potentially relevant idea for mutual benefit.
Like P and G, a growing number of companies
are now embracing collaborative or open innovation.
This is the development of new technologies,
products, and processes in partnership
with other independent entities.
The innovation partners could be universities,
government labs, other companies, or even individuals.
Two factors are driving a growing embrace
of collaborative innovation.
The first is that most products
now require an integration of multiple technologies
and no company can master all of them.
Take Apple and Samsung.
Every smartphone is a tightly integrated system
of multiple components.
Developing the next generation smartphone
requires pushing the envelope,
not just at the level of the entire system,
but also at the level of many components,
such as the processor chip, the camera,
the touch screen, and so forth.
Not even Apple and Samsung have mastery
over all of the critical
and interdependent component technologies.
The second driver is the rapid pace
of technology development
and the increasing ferocity of competition.
Many companies find that
even in their core areas,
they need to partner with other companies
that may be more nimble.
Take, for instance, Barclays, the British bank.
Barclays rounds a 13-week accelerator program
targeted at young startups
in the financial technology sector
at some of its offices around the world.
The idea is that this type of collaborative innovation
could help Barclays move faster than its competitors.
Like all partnerships,
success at collaborative innovation
requires being smart about who to partner with
and how to manage the relationship.
The ideal partner is one that is complimentary
and poses little risk of becoming a competitor.
Sometimes, however, companies have little choice
but to work with frenemies,
companies that are competitors,
as well as collaborators.
Case in point, Apple and Samsung.
Even though they compete ferociously
in the smartphone market,
Apple also relies on Samsung
for some iPhone components,
such as display panels and memory chips.
In terms of managing a collaborative relationship,
it's important to have upfront agreements
regarding who will contribute what,
who will own what,
how the resulting intellectual property will be shared,
and how decisions will be made and conflicts resolved.
It's also crucial to cultivate trust
while keeping a watchful eye on the partner.
It's difficult to openly share information without trust.
Yet over time, new developments,
such as changes in leadership,
could make a trustworthy partner less so or vice versa.
Partnerships between companies are unlike marriages.
At some point, they will come to an end.
Until then, they can pay off handsomely.