The magazine of Friedhelm Loh Group

The magazine of Friedhelm Loh Group

Text Ingrid Kirsch ––– Photography

Professor Weissenberger-Eibl, companies are working together with research establishments, large corporations are collaborating with start-ups – even rivals are joining forces. It seems that organisations can’t function any more without networks and collaborations. Did companies use to be more powerful in the past? The concept of a company developing an innovative idea on its own and creating demand this way is an ideal scenario that seldom occurs. Innovation processes are much more complex than that. It really is becoming increasingly important to look beyond your company’s confines. It’s no longer enough to conduct research and then bring a finished product to market. Companies need to change their perspective.

In what way? Instead of looking from the inside out, they need to develop an innovation strategy from the outside in – to forge partnerships. To start by gaining an understanding of what is going on beyond their immediate horizon, and then to consider how the company can contribute to meeting the challenges people face in the outside world. This calls for a concentrated search for potential, but also for clever marketing and strong collaborations between everyone involved in the innovation process. I am certain that forming networks improves your chances of being heard, compared to going it alone.

Where would you say this shift in paradigm towards cooperation stems from? In part from digitization and the associated increase in networking. Our research shows that digitization acts as a catalyst for collaborative forms of business in industry. This explains the success of carsharing or pay-per-service models, for example, which involve the widespread sharing of knowledge or usage of goods. Sharing and exchanging material and digital goods this way will continue to increase enormously, which stands to benefit highly digitized small companies, above all. Innovative ideas will no longer only be developed on consumers’ behalf, but increasingly in collaboration with them. 

Can you give an example? Our “Patient Science” project is examining how people suffering from a rare disease can be involved in the research process – for instance using health apps or wearable tracking devices. 

Consumers playing an active role in these kinds of networks might be new. However, the division of labour has been the bedrock of our economy since the dawn of industrialisation almost 200 years ago. Back then, innovations often emerged along clear technological system boundaries and generally progressed through classical development phases. Nowadays, we are experiencing a shift towards open innovation processes occurring at technological interfaces that until now were not linked in any way. 

What do you specifically have in mind? Such as research into batteries and the automotive industry, which developed quite independently from one another for decades but now collaborate intensively. The trend towards creative start-up hubs and co-working spaces also shows how the division of labour has changed. These places offer a high level of innovative potential by mixing interdisciplinary knowledge with free space for creativity – which provides very fertile ground for start-ups. Global players (such as Bosch or Siemens) are also discovering the potential that lies in these work formats. Our research shows that flexible high-tech companies with a strong interdisciplinary focus enjoy a strategic competitive advantage over their rivals in the globalised economy. 

“I am certain that networks present more opportunities than risks.”

What does it take to turn a network into a competitive advantage? A good network ideally involves give and take. This applies to both sharing knowledge and dialogue. Personal recommendations are also very important for gaining access to networks and weighing up whether a particular network is of interest. I am certain that networks present more opportunities than risks. Good networks are based on mutual trust – and trust is a valuable commodity in our digitized, globalised world. It is important to approach one another open-mindedly and to initially give others the benefit of the doubt. Only then can we get to know the other party’s strengths and weaknesses. The stronger and more trusting this connection, the more robust my network will be – and the more likely it is that synergy effects will emerge, to everyone’s benefit. And these are exactly what we need to tackle 21st-century challenges such as climate change and other big issues. 

In times when data theft is rife, this trust can quickly prove damaging. Any data that belongs to a company’s DNA is certainly sensitive. Revealing information that forms part of a company’s core skills would endanger its competitiveness quite significantly. However, it’s impossible to ever entirely rule out any risk of someone else siphoning off your intellectual property. I believe it would be a mistake to forego all cooperation for fear of risking too much transparency. Transparency is an important motor of innovation. I am certain that, with all this in mind, it makes sense to invest in honing employees’ digital skills. We must enable people to handle technology sensibly, together with the associated opportunities and risks, and equip them with a thorough understanding. Lacking this core digital competence could make things difficult in the future. Germany still has some catching up to do in this regard.

Who is ahead of the game? Companies such as the consumer goods corporation Procter & Gamble, for instance, which had already realised a good 20 years ago that there were millions of researchers worldwide that were at least as skilled, if not more, than its own staff. This led it to set the aim of increasing the proportion of external collaborations to 50 per cent – with great success. Prior to this change in strategy, P & G had been one of the more cautious companies, focused on protecting its own patents and licences. Nowadays, it is one of the world’s most prolific patent holders, in part due to the many innovative products born from cooperation between internal and external research departments. All because senior management knew that: “Innovation means forging new links.”

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