Co-innovation & the rules of engagement5 minutes
Here’s a quick experiment to try next time you’re in a meeting or party with a group of Millennials: Ask how many have landlines in their homes. When I put this question to a handful, not one used a home landline. In fact, about half of adults in the U.S. now live in a “wireless only” household, according to the National Center for Health Statistics. Compare that to 2004, when the vast majority had a landline at home.
This is what people mean when they talk about “disruptive technology.” It’s one sign of how tech has recently changed our lives, but not the only. A look at the burgeoning rideshare business might have a Baby Boomer wonder if their grandchild will ever own a car.
Grappling with change
The rate of tech-driven change – increasing exponentially – has companies of all sizes thinking about how to innovate. Some people believe innovation happens better in early-stage ventures than established corporations, but I disagree. Innovation can happen fast when organizations of different levels come together. What matters are the rules of engagement.
Panasonic turned 100 last year, and our history is marked by collaboration with innovators of all sizes. Our co-innovation efforts range from co-development of products and solutions to capital investments to incubation to outright acquisition. One example includes our work with Tesla, where Panasonic jointly designed and engineered the 2170 cylindrical battery cell for Tesla’s energy storage system and its Model 3 sedan.
As network operators evolve their infrastructure to support 5G, companies are looking to greener, more efficient grid and tower tech. Panasonic, in collaboration with Ericsson, has begun trial deployment of a sustainable energy-as-a-service solution at hundreds of North American sites. The Green Tower advanced energy solution combines lithium-ion batteries and renewables with site management software and analytics for companies to measure, monitor and maintain energy infrastructure.
More recently, we announced plans for BeeEdge, a joint venture with San Francisco VC firm Scrum Ventures. BeeEdge will identify Panasonic technologies that are not fully utilized and create independent startups to commercially develop them. It will also act as an accelerator, collaborating with and supporting entrepreneurs.
Start off on the right foot
Here’s what we’ve learned from years of co-innovation. First, don’t begin by looking for the technology. Instead, start by looking at the problem you’re trying to solve. Once that is identified, ask “Why?” Then the solution will present itself when you put the teams together. This approach is highlighted through a collaboration between Panasonic and Pika Energy that led to the Harbor Smart Battery, which addresses issues caused by surplus energy created by renewable sources.
Spectacle or substance?
In addition, for co-innovation to work, collaborators must have a realistic understanding of each other’s goals. What can spell doom is one-sided grandiosity. Entrepreneurs can be unrealistic when it comes to manufacturing. Do they understand what it takes to achieve production milestones? It can be painful to watch startups initially impress investors, miss key milestones and find themselves unable to raise additional funds or retain key staff.
Differentiate or die
In the business bestseller, "Competitive Strategy," Michael Porter made the case that there are two ways to compete: by selling something for a cheaper price, or by “differentiating” a product or service by making it smarter, faster or better in some other way. When it comes to co-innovation, you have to have differentiated technology that you can defend now and for some period of time into the future. One of my favorite examples: The Apple iPhone Steve Jobs announced in 2007.
Consulting firm McKinsey identified two dozen disruptive technologies that would account for trillions of dollars in economic value in the decade ahead. Panasonic is deeply engaged in almost half of them. And when industry leaders are creating new experiences – like the move to 5G, residential solar energy or electric vehicles – chances are they’re going to need to stitch together different disruptive technologies into an integrated solution. Panasonic is uniquely skilled at bringing together these technologies.
Almost by definition, established organizations are risk-averse. What makes co-innovation exciting is the way it builds a path to success in an existing company. After all, if you don’t take risks, you end up standing still – and that in itself may be the biggest risk of all.