Advances in digital technology create opportunities to innovate across multiple industries. Whether it’s using artificial intelligence to create a new customer experience at electric car charging stations; streamline how quickly patients can be seen at A&E; or explore new business opportunities for telecom operators in digitalising live events – it is the collaboration between companies from a variety of sectors and information technology providers that are driving real success.
The need for digital transformation fundamentally changes the nature of relations between information technology providers such as IBM, Microsoft and Amazon and their clients. IT providers need to go beyond simply selling innovative IT products or services to clients’ IT departments and instead develop capabilities for collaboration that respond to their specific digital transformation pathways. This could be improving the efficiency of their current operations, developing digital solutions that support strategic differentiation or helping the client explore future-oriented business opportunities.
Meet your ‘innovation squad’
IBM has found that close collaboration and co-creation is the key to unlocking innovation that delivers real value on their client’s biggest problems and opportunities. It is this recognition that has led to the creation and rapid scaling of their Client Engineering team. The cross-skilled team of 1,600 engineers, architects, designers, consultants and data scientists was globally hired specifically to transform how IBM engages with its key clients and become a trusted innovation partner.
An agile ‘squad’ consisting of IBM’s business transformation consultants, designers, solution architects and data scientists work closely together with a client to create innovative digital solutions. This approach shows clients how technology can work for their benefit, builds trust in IBM expertise, increases the interest in IBM technology and opens up new collaborative opportunities.
Developing organisational capabilities for co-creation with clients is based on three pillars: diversity of expertise, unique innovation process and strategic leadership.
Diversity of expertise
In just 18 months, IBM hired a large number of digital technology experts that significantly increased the diversity of its Client Engineering team. Moreover, the spirit of collaborative innovation enabled IBM to attract a new generation of digital experts less constrained with the technological and cultural legacy of IBM. This influx of fresh thinking combined with IBM's deep understanding of technology and their client’s subject matter expertise creates a diverse inter-organisational team with varied knowledge and experiences. It is this diversity that enables the co-creation of innovative solutions that either radically improve client’s business processes or help explore new business opportunities.
Unique innovation process
Co-creation is supported by a unique innovation process that combines elements of Design Thinking with Agile software development and Lean start-up principles. IBM’s team takes the client on a journey to understand current challenges and opportunities, and then ideate potential solutions to these together. It’s a creative and collaborative process facilitated through research, workshops and conversations.
After creating a shared vision for the future, they work to identify how the client can take their first step of this journey – prioritising maximum value, learning and risk minimisation. After agreeing this and outlining a hypothesis (including pre-defined success criteria), IBM will assemble a team to spend 2-8 weeks designing and building out a ‘proof of value’. During the design and build phase, the client can be as involved as they like; sometimes co-designing and co-building the solution, or sometimes attending weekly playbacks and providing feedback.
The end goal is to test the solution against the hypothesis and either direct it to the right team within IBM or its ecosystem partners to scale the solution – or pivot into a direction that works better. This robust process enables IBM to identify clients’ needs and rapidly adapt to their innovation challenges.
As IBM moves from its traditional sales model to a more collaborative and innovation-driven client engagement, the changes affect the role of account technical leaders who are responsible for building and sustaining strategic engagement with the key clients. They increasingly need to demonstrate strategic competency in matching client’s innovation strategy with IBM’s expertise and technology portfolio.
Moreover, they need to be entrepreneurial and frame broader innovation opportunities that set the scene for a more targeted co-creation process with the client. This requires building distinct social interactions with clients leading to mutual understanding of strategic directions. Establishing such a strategic intimacy is crucial to influence interpretation of innovation opportunity and increase its resonance for clients. If unique innovation processes are critical for effective adaptation to the client’s needs, the strategic leadership is vital for a more ambitious shaping of the collaborative innovation journey.
Getting the right heads together
Co-creating is not easy and it is not without managerial challenges, yet it remains a strategic imperative. Getting the right people from the client organisation in the room and keeping them committed throughout the intensive process of co-creation is a very tangible challenge. IT professionals with whom information technology providers historically built close relations may not be the drivers of innovation with clients. Expanding interactions to these non-IT professionals is an important imperative that requires skilful navigation across the client organisation.
Perhaps the most intriguing challenge is to define a level of innovation ambition. Innovation comes in different shapes or forms and it is often tempting for both clients and information technology providers to focus on low hanging fruits – for example, the use of previously tested technological solutions promising incremental improvements.
But this potentially leaves out exciting and more future-oriented innovation opportunities. The IBM approach allows clients to tackle different levels of innovation ambition. The company’s unique innovation process supports adapting to different innovation challenges experienced by clients. Strategic leadership and ability to skillfully frame entrepreneurial opportunities becomes increasingly important if the ambition of co-creation is to shape markets of the future.
Key learnings from IBM’s collaborative approach
Co-creation leads to powerful innovation.
Getting the right people from across the client’s organisation in the room is essential but challenging.
Design thinking in co-creation allows solving of problems and additional techniques can be used for more of an opportunity-seeking and futures-thinking approach.
Strategic intimacy and openness between innovation partners is crucial to shape innovation.
- Strategic leadership for collaborative innovation requires skilful framing of innovation opportunities.