By Alessandro Di Fiore
In 1848 San Francisco newspaperman Samuel Brannan announced that gold had been found in California.
In the gold rush that followed, more than 300,000 people headed to the area to make their fortunes. More than 150 years later, there’s still a gold rush in California—this one in Silicon Valley. Even organizations that remain headquartered in other cities have set up innovation outposts there in the hope that high-tech silicon dust will rub off on them.
Setting up innovation outposts in global technology clusters, such as Silicon Valley, Boston or Tel Aviv, is very popular among Fortune 500 corporations. The logic is that if you are present where new trends, ideas and start-ups are being generated, you might be able to assimilate them into your firm’s innovation pipeline.
To make innovation outposts work successfully, companies need to do two things simultaneously. First, they need a “sense and capture” approach in the outpost itself. Second, they must set up “integration and propagation” processes to make sure that all the value is transferred back and properly used by the wider firm.
An integration and propagation model should address three objectives:
- Map out local relationships.Mapping the local team’s network makes social-capital relationships explicit and avoids the risk that they stay with the local team.
- Propagate Intelligence and Insight. Capture, evaluate and channel the intelligence and insights from the innovation cluster through the organization. The tacit knowledge should be codified and shared through formal processes to avoid the risk that valuable information absorbed by the outpost doesn’t reach the mother ship.
- Speed up corporate deal-making process. When the outpost scouts a potential deal—involving licensing, a start-up investment or a merger of some kind—there must be protocols for integrating the opportunity with the company’s existing deal processes. The flow and speed of decision-making should be reviewed, since typically decisions need to be made much faster in a hypercompetitive environment, such as an innovation cluster. Otherwise, a company runs the risk of missing opportunities.
Alessandro Di Fiore is the founder and CEO of the European Centre for Strategic Innovation and ECSI Consulting.