The traditional image of large scale R&D was that a large centralised lab, such as the famed facilities at GE and AT&T. Now, according to authors and innovation experts Satish Nambisan and Mohanbir Sawhney, companies who want to innovate need to partner with outside organisations to create "innovation networks" to achieve successful innovation
In their book, The Global Brain, the authors describe the organisational transition as follows: "To enjoy the benefits of a rapidly expanding horizon of innovation opportunities, companies need to make gradual shifts from firm-centric innovation to network-centric innovation. The emphasis on the network as the focal point and the associated opportunity to extend, optimize, and enhance the value of a stand-alone entity by making it more intelligent, adaptive, and personalized is the essence of network-centricity." Doing this, the authors assert, will produce an innovation process that is faster, and less costly, than one that relies purely on in-house resources.
Choosing the right network model is vital, and to this end the authors propose four basic network models. The are:
1. The Orchestra. "The Orchestra model for network-centric innovation closely resembles the organization and structure of a typical symphony orchestra. The structure of the innovation space is fairly well-defined and the network leadership is centralized with a single dominant firm. And just as the musical instruments in an orchestra need to resonate with each other, the innovative contributions of network members in the Orchestra model also complement one another."
2. The Creative Bazaar. "The Creative Bazaar model describes a context wherein a dominant firm shops for innovation in a global bazaar of new ideas, products, and technologies and uses its proprietary commercialization infrastructure to build on the ideas and make them market-ready. In much the same way as a music studio sources new musical compositions from a wide variety of artists, companies that implement the Creative Bazaar model to source new products or services can use a variety of mechanisms to source new ideas and technologies from inventors."
3. The Jam Central. "The Jam Central model involves individual contributors coming together to collaborate in envisioning and developing an innovation. The innovation space is typically not well structured and the objectives and direction of the innovation tends to emerge organically from the collaboration. Like a musical jam session, there are no dominant members and the responsibility for leading and coordinating the activity is diffused among network members."
4. The Mod Central. "The Mod Station model is focused on exploiting an existing innovation or knowledge to address market/technological issues by a community of innovators (innovation users, customers, scientists, experts, and so on). The activities occur within the boundaries of a predefined innovation space, and aim to add, enhance, or adapt existing products or services. The norms and values that govern the innovation activities are established by the community and not by any one dominant firm."
Unsurprisingly, the authors see the CEO's role as being critical. This role is more, however, than one of traditional management authority, i.e. setting targets, allocating resources and ensuring accountability. "The CEO's role goes beyond setting goals related to how much innovation should be sourced from outside or how much new revenue should be generated from network-centric innovation initiatives. CEO's need to champion a new set of beliefs that might initially be perceived as heretical and generate stiff internal resistance."
