Business alliances remain a tricky thing. On the one hand, alliances allow companies to tap into new markets and growth platforms. At the same time, forming alliances is risky, as it demands trust building and deep knowledge sharing with external parties. This article provides a pathway for successfully managing business alliance formation.
Business alliances remain a tricky thing. On the one hand, alliances allow companies to tap into new markets and growth platforms. At the same time, forming alliances is risky, as it demands trust building and deep knowledge sharing with external parties. In an uncertain business environment, today’s friend may be tomorrow’s enemy.
Nonetheless, the rise of open innovation has led many to believe that collaboration has become a key way of securing future innovation management and creativity —blurring the traditional lines between corporations and institutions within and across sectors. This provides new incentives to turn outwards and form business alliances.
“Always consider new alliances carefully, without basing your judgment on past experiences only. ”
A real skill
The first step is to realize that business alliance formation is a real skill to be built and developed. Alliance building is similar to M&A –mergers and acquisitions. There are a lot of statistics about the rate of success of this type of business development. Most research indicates that M&A activity has an overall success rate of about 50%.
Purpose, people and prenups
Many consultants and business schools stress the importance of diligent post-deal execution of alliance, and integration of acquisitions. This is crucial in cases of very clear cost synergies, however, in cases of entrepreneurial endeavors this can be unnecessary limiting.
Read here about>> Sound Judgment and Strategic Partnerships
You don’t need to look far to see risk in innovation leadership. Yet many entrepreneurs lack a sufficient understanding of how to judge and deal with risks. In this article we introduce a model for classifying risks in innovation leadership. In turn, we discuss how some of these risks can be reduced or averted, and in some cases even embraced and reframed to mean something positive.
According to some statisticians, more than half of all startups fail within their first five years of existence; figures on innovative startups are even bleaker. A first round of investment is no guarantee for success, either- the generally accepted figure is that roughly three-quarters of venture-backed firms won’t ever return their money.
“One of the inherent virtues of innovation leadership is that the excitement of the opportunity outweighs the perceived risks of loss and failure. ”
Low probability – low impact risks: to be ignored
Risks that have a low likeliness to occur and low potential impact are not worth spending much, if any, time on.
Low probability – high impact risks: to be insured
Risks that have a high potential impact but a low probability can often be averted through insurance. This is desirable when the benefits of insurance are likely to outweigh the costs.
High probability – low impact risks: to be averted
These risks, due to their low severity, are as inconvenient as they are avertable. Examples of risk in this category are: a key team member becomes ill just before an important deadline; a computer crashes with all the customer data information.
High probability – high impact: to adapt to
The risks in Quadrant 4 are of key concern for innovation leadership (and any existing business), as they are too costly to insure and cannot simply be ignored or averted due to their severity.These risks are the real company killers, often tapping into the core beliefs and (informed or non-informed) assumptions that businesses have built their product or services on. All elements of the enterprise (market, competition, leadership, operations, legal, finance) are exposed to such risks.
Read more about Risks in Innovation Leadership Talent at Innovation Management
Piloting in business innovation means testing an idea effectively. This is not a straightforward process and requires addressing the right questions: What idea should we test? Which aspect of it? How should we go about testing? How should we measure the results? What do we allow these results to mean and what do we do afterwards?
Forget selection – Test all your ideas
“I think there is a world market for maybe five computers.” – Thomas Watson, chairman of IBM, 1943
“We don’t like their sound, and guitar music is on the way out.” – Decca Recording Company on declining to sign the Beatles, 1962
“There is no reason for any individual to have a computer in his home.” – Ken Olson, president of Digital Equipment Corporation, 1977
When you do need to choose
Testing everything won’t work when you have too many concepts. We are constantly choosing between ideas, so it helps to become aware of what should and should not influence choices. A legitimate approach is to strive for a multitude of concepts. In her book Creative Conspiracy, Leigh Thompson argues that “striving for quality results in less creativity than when striving for quantity.” The approach that we call “producing for waste” means you will end up with a whole batch of ideas from which to choose.
So how can we select an idea to pilot if we are famously flawed at predicting successes in our own domain? The answer is to be systematic. We have created a four-step checklist when selecting which concepts to pilot:
- Check your innovation priorities
- Check the origin of the idea
- Check potential impact along important KPIs
- Check that the path of implementation will fit your person or culture
Read more about Are You Focusing on the Right Pilot?
Innovation is an essential and important thing which is required by any business organization to achieve the planned targeted goals. Now a days online learning Innovation help organizations in may ways starting from learning new skills, building creativity & enhancing leadership among employees which is the key factor to get success in this competitive environment.
With the exponential growth in the internet, we have seen similar growth in internet based companies and services. Many of these companies and services exploit the internet’s connectivity to be able to reach people who were previously excluded from a typical business’ day-to-day affairs. These individuals are often willing to offer their “expertise” in return for money, recognition or simply because it is fun (Ipeirotis, 2010). More importantly they are often willing to offer their “expertise” at a much lower price than an expert carrying out the same work with innovation management processes.
Admittedly, professionals in the respective industry have the opportunity to jump boat into the new form of sharing economy. It is an option but a very uncertain one. The sharing economy is often based on one-off opportunities for its workers. Sure there is money to be earned but it is typically not a stable wage and one that is not as well paid as the original job done solely as a professional.
Read more about the creative destruction of your job here