How to delegate innovation
Today, an increasingly evident truth is emerging: when it comes to innovating, large groups and major corporations experience a certain difficulty. Most frequently, innovation takes place in small start-up or medium-sized structures. The reasons are well known: large groups often operate with a top-down management hierarchy that causes them to resemble administrative structures more than private enterprises. Thus, in the Bain study (March 2016) on the alliance between large and young companies, Alain Evrard, director of acquisitions at L'Oréal, states: "Today the alliance with new partners (young companies and universities in particular) is a necessity: large companies no longer have the monopoly on knowledge and creativity. In the age of interaction and connectivity, 'not invented here' is truly no longer relevant." As a result, while they often owe their gigantism to a particular innovation, they have difficulty finding the second wind that will allow them to launch a similar innovation onto the market. The best examples of this thesis are found among the GAFA (Google, Apple, Facebook, Amazon). These companies knew their finest hours and reached their colossal size thanks to the disruptive innovations they launched. Yet while they continue to innovate internally, they have also adopted as a strategy the systematic acquisition of all innovations that seem relevant in relation to their core business. In 2016 alone, Google acquired eleven companies and Apple seven. Sometimes these acquisitions are a means of absorbing a potential competitor — this is the reason why Facebook, for example, took over Instagram. One might conclude from this that today, the only way for a large group to innovate consists of making its market its own by acquiring a complementary piece.
Do all groups wishing to innovate necessarily have the critical size that allows them to behave in this way? The majority entrust their innovation to third parties, as is commonplace in IT management. They then have the choice between two solutions: either calling on body-sharing companies, or calling on outsourcing firms. While the former make available a catalogue of qualified resources, the latter propose a team with know-how and a dedicated experience. If the first solution seems more attractive and less constraining at first glance, it turns out that it can subsequently generate a certain number of obstacles for the company wishing to innovate.
First of all, one must acknowledge that the allocation of dedicated skills is constrained by the availability of resources. Indeed, when a company wants to select a CV from the catalogue to integrate into one of its teams, it will have to wait until that person is free of any other obligation. In contrast, an outsourcing firm will be at its service much more rapidly. At a time when execution speed is decisive, on-demand innovation is a fundamental added value.
It is then more complicated to verify the aptitude of a qualified engineer based on their CV, than that of a team that would already have a catalogue of innovations to its credit. A doubt will always remain about the seconded staff: will they be able to integrate into the team? Will they get up to speed immediately and demonstrate the same competencies? All these imponderables increase the share of uncertainty and diminish the chances of finding the ideal partner who will guarantee the company a genuine capacity for innovation. Indeed, this is where one realises that the latter does not depend solely on the ability to find a missing link, but on the ability to inject a genuine dynamic. To achieve this, preference is given to a reactive team likely to intervene effectively within a short timeframe.
Finally, a multidisciplinary team, composed of resources accustomed to working collectively on heterogeneous subject typologies, will offer a shared experience as standard. Co-creation and the strength of the collective are two added values of outsourcing firms that body-sharing companies are incapable of delivering: experts who are used to confronting problems together in the resolution of complex challenges. In conclusion, one will notice today that innovation is not necessarily an internal process within the company. Companies that innovate little or not at all can perfectly well outsource research to external partners or service providers who will bring them support in carrying out certain developments. There is undoubtedly no perfect solution, but the choice is there. All that remains is to decide on the most appropriate solution in light of their overall strategy.
