Every now and again I search for Sourcing Innovation on Google, expecting to find this blog and companion website, a few Spend Matters posts, Nine Sigma, a service for innovation seekers looking to hook up with innovative solution providers using open innovation, and maybe the Wikipedia definition for innovation. But I recently ran the search, and what did I find in the top 5? IBM with their Innovation Sourcing white paper and Accenture with their Innovation Sourcing Strategy Matters research report. And, especially in the former case, what nerve!
According to IBM, innovation sourcing is the term used to collectively describe the assets, processes, and techniques used in outsourcing contracts to drive innovation. I have to disagree. As far as I’m concerned, innovation sourcing is innovated sourcing and innovated sourcing is any sourcing endeavor you do that applies innovation – be it outsourcing, insourcing, category sourcing, or personnel sourcing. And the innovation doesn’t have to to be restricted to processes and techniques – it could be the technology you employ, the location of alternate materials, or even finding a way to bypass sourcing altogether. Now I know I should be flattered that they used my blog as their inspiration for suggesting a way to take outsourcing to the next level, but they could at least get it right!
In Accenture’s paper, penned by the Institute for Strategic Change back in 2003, they noted that although many companies are increasing their reliance on external sourcing for innovation, most of them lack an innovation sourcing strategy that would not only help them decide what combination of internal and external sources they should consider but how to leverage those resources throughout the innovation chain. This is important because a good innovation sourcing strategy can open up new doors, delivery quality results faster, cut the cost of innovation, facilitate priority calls, and even stimulate internal innovation while the lack of such a strategy carries risks and costs.
According to Accenture, a good innovation sourcing strategy, which should be holistically driven, addresses five questions:
- What is the organization’s innovation strategy, including desirable domains and end products for innovation?
- What are the key sourcing principles?
- What are the firm’s innovation sourcing channels and what needs do they address?
- How are the interfaces across channels identified and managed?
- What international organization mechanisms need to be established to leverage external sourcing effectively?
Not bad … but what about Why?? And, more importantly, Why?? First of all, you can’t develop an effective innovation sourcing strategy unless you know why you should have such a strategy, and how it could help you source better. And secondly, you need to know why you want a strategy. Because a strategy takes commitment, and that takes drive.
Roses are Red, Violets are Blue, Mz. Dawson is Sassy … and so am I!