Ever since Michael Porter began promoting the concept of clusters in the mid-1990s, a lot has been written about the What and Why: What are clusters and Why are they important. Not so much useful has been written about the How. The reason is obvious.
Designing and guiding new clusters involves complex systems of open, loosely connected networks. Our colleagues at New Jersey Innovation Institute are using the concepts we developed at Purdue to design and guide a new cluster of high-tech companies in the sophisticated area of Condition Based Maintenance. It involves companies in sensors, machine learning, and predictive analytics.
“I’ve worked with large companies trying to do open innovation, but the Strategic Doing process is unique. This is the most clear an concise open innovation process I’ve seen.”
Lesson 1: Strategic Doing provides a valuable framework and discipline for open innovation
We are working with them to see how well our lessons can be replicated. So, for example, we are learning that Strategic Doing provides a valuable design framework for workshops. As Mark Scotland, CEO of 4.0 Analytics said in one workshop, “I’ve worked with large companies trying to do open innovation, but the Strategic Doing process is unique. This is the most clear an concise open innovation process I’ve seen.”
Based on our experience with other clusters, we describe the process of forming innovation networks that moves through some identifiable stages. First, the conversation shifts away from hierarchies and toward networks. In the case of our work with Lockheed, participants needed to move beyond the vertical supplier mindset and move toward a horizontal collaboration mindset. We promoted this first stage by carefully framing the conversations within our workshops.
Lesson 3. Focus relentlessly on small commitments. Trust forms when participants develop patterns of doing.
By pushing participants to make small commitments at the end of each workshop, we were able to use encourage the formation of trusting relationships. We frame these commitments on a very small scale: “What could you do to advance our agenda with one hour over the next 30 days?” These commitments were public and published within the group. People who make commitments but were uninterested in fulfilling them fell away. Our continuous request for small-scale commitments served as a useful filter. We started out with roughly 60 companies. After four months we had a network of about 20 companies, with about eight companies driving the cluster’s agenda forward.
Lesson 4. As trusted networks form, the productivity of the network improves dramatically.
As trusted relationships form, the productivity of the network improves dramatically. This improvement in productivity comes as participants become more skilled at linking and leveraging their assets. They gain a deeper appreciation of each participant’s asset portfolio — the unique competitive strengths of each business. They develop new habits of thinking about how these assets can be linked across organizational boundaries. And they see the value of leverage, accomplishing more productive outcomes with relatively less effort.