Outsourcing Innovation for Greater ROI
Large companies appear to have all of the skill sets necessary to sustain innovation, yet appearance can be deceiving–one cannot valuate what they cannot measure, lost opportunities. Companies have begun to outsource innovation (a.k.a. open innovation) to maximize their opportunities, yet it is important to minimize transaction costs of administering projects, whether outsourced or not. In fact, streamlining R&D processes including outsourcing can provide returns of up to 10 to 85 cents on every dollar of R&D expenditure.
As one develops their cast of headshops and other outsource partnerships, one needs to balance their internal and external resources of skill sets, experience base, and congregate their core competencies to satisfy the need of the corporate strategic plan. Once the system is established, one needs to establish leadership practices to ensure sustainable management of these resources.
Leadership and management work in concert to shape the path and then drive the organization along that path. This is just as true for innovation environments yet with the added dimension of fitting in with the corporate culture of their organization. Innovation environments are comprised of technical leadership and those relevant stakeholders in the company that enable commercialization of novel goods and/or services.