Overcoming the Global Innovation Trade-Off

For their global innovation strategies, many companies have long relied on their ability to assemble people with key capabilities and critical knowledge. This is typically done through co-location: bringing together designers, engineers, technologists, and other creative thinkers in a few innovation centres at home and in lead markets. The new products and services they create are then disseminated to markets across the world.

However, as the range of knowledge required for global innovation becomes wide and more varied, co-location is no longer sufficient.

This paper argues that the reason for this failure is due to the commonly accepted trade-off between complexity and dispersion. The challenge is to overcome this trade-off: to build a worldwide R&D team that can master the complexities of robust innovation. Having researched more than 50 global companies, Doz and Wilson believe that innovation practice can be redesigned to enable far-flung people to work together on complex ideas.

This transition can be made by optimizing three different aspects of innovation, generally at once:

1. A compact and agile innovation footprint – helping to find and access new sources of market, process, or technical knowledge, and easily disengage from obsolete sources.

2. Develop the capabilities, processes, culture and structures needed to support rich communication – when innovators are separated by distance, time, and culture, communication becomes a serious challenge.

3. Boost support for collaboration in innovative projects, both internally and with external partners. It is explained that innovation doesn’t have to be constrained to the complexity–dispersion curve.

Implementing the necessary changes is challenging and can take time — but it is one of the best ways to position an innovative company for competitive advantage in the future.