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Greg Kinsey, vice president at Hitachi's Insight Group, discusses how fresh perspectives and new ideas are critical to solving complex problems. He argues that organizations need to move away from off-the-shelf, solutions-based approaches. Instead, they should use collaborative partnership models, where ideas, risks and outcomes are shared to drive innovation and differentiation
GK: A solutions-based approach, where an off-the-shelf product or service is employed to solve a particular problem, has become increasingly common over the past ten or even twenty years in business. But, the issue with this approach is that it assumes that the customer fully understands the nature and extent of the challenge they face. The fact is that in today's world, customers don't always fully understand their challenges. There can be ambiguity around the scope of the problem, and there may be multiple paths to resolving it.
To solve this, our customers are increasingly looking for a partner that can go on a journey with them to the heart of their issue. They're looking for more than a supplier. They're looking for shared innovation, shared development, and even shared ownership of outcomes and risks.
GK: In any industry you care to look at today, you'll find fewer than ten global-scale competitors. But, we're moving to a world where market definitions are blurring, where small companies are able to challenge large ones, and companies are teaming up in order to strengthen their offering. There's a lot more ‘co-opetition', where direct competitors are working together to tackle specific markets. The fastest movers here were technology companies, followed by consumer companies, and now everyone is looking to get a piece of the action.
GK: Businesses face increasingly complex challenges and there are often multiple routes to a solution. One of the challenges of addressing this as a single company is you often have a necessarily limited scope of knowledge and experience, and therefore a more limited range of ideas. Co-creation addresses this directly. By bringing in new organizations, you are adding fresh perspectives: new cultures, competencies and experiences. That creates a higher level of innovation.
Another driver is differentiation. Part of the problem with solution-based selling is that it leads to convergence in the products and technologies being adopted by competitors. Innovating through co-creation allows companies access to unique options. Off-the-shelf solutions play to the lowest common denominator. To use them reduces the product or service you are trying to sell to commodity status. Collaborative innovation is a way around this – and potentially even a way to find new business models between partners.