4 Reasons Collaborative Innovation Will Change How Management Works

To stay competitive, modern businesses must adapt and stay innovative, and this is increasingly only possible by working with outside talent. Managers and executives have understood the power of outsourcing for quite some time, but traditional client-contractor relationships are breaking down, looking more like partnerships, yet remaining as separate entities.

Why are these changes happening, and how will they affect the future of management, and business as a whole? Read on to find out.

1. Specialized Skills are in Short Supply

The modern business must be more innovative than ever before. But innovation requires diverse skill sets, and the problem is, those skill sets are often much bigger than those of even the largest businesses.

It’s a well-known fact that diversity of race, gender, age, and expertise is conducive to innovation. But diversity of this kind is often difficult to cultivate in-house. Even when diversity is brought in, time takes its toll, and assimilation is common.

Bringing in external talent, temporarily harnessing the power of an outside expert, is often a more effective way to spur innovation. An outsider can bring perspective that an insider cannot. Upsets of this kind have a way of opening minds and possibilities.

More pragmatically, unique talents are simply in such short supply that it’s nearly impossible to find somebody with such a talent who is willing to work for a single company. With so many businesses in need of their expertise, supply and demand encourages them to act as freelancers rather than employees.

2. New Talent Sees Things Differently

Emerging generations no longer see the employment track as the only option. Freelance opportunities are becoming much more common, and younger experts often find the idea of working outside the fold, with several companies, a more appealing opportunity.

New cloud-based project management software, social technologies, and mobile computing have made this opportunity much more viable for such specialists. It no longer makes sense for them to take a position within a single company when they can instead choose to work with several clients at once.

3. Transparency Becomes Necessity

When we see Proctor and Gamble Connect+Develop R&D program lead to more than half of their innovations coming from outside the company, it becomes obvious that new ways of viewing intellectual property are a necessity. Some companies have employed pools of free patents or standardized licensing agreements. Only time will tell exactly how to conquer these issues in the years going forward.

One thing is clear, however. Businesses will no longer have the option of holding onto ideas with lock and key. Businesses that fail to work with external collaborators will only fall behind. Only companies that are willing to risk sharing information with others will be able to pull ahead in the market of new ideas and opportunities.

4. Managers Must Master Remote Communication

One of the most jarring changes we can expect from the growth of collaborative innovation is the changing role of the project manager. Diversity is not effective simply because people from diverse backgrounds are thrown together to work on a project. Managers must facilitate communication in order for diversity to be productive, rather than crippling.

This role for managers will become increasingly obvious as businesses will need to stretch farther and farther for unique talent, often working with people that they never meet face to face. Communication technologies make this easier, but without smart project management, communication breakdowns will become commonplace.

Conclusion

The birth of companies like NineSigma and InnoCentive, which exist purely to facilitate external collaboration, calls attention to the growing role of collaborative innovation. As R&D departments become open networks, managers will need to learn new skills in order to facilitate communication and capitalize on opportunities.