In an era of digital disruption, co-innovation has steadily gained traction among companies eager to push the boundaries of creativity and innovation.

However, presenting your strategies with genuinely fresh and original ideas becomes paramount as the term “innovation” becomes a commonplace business buzzword. Given the quickening pace of market evolution, staying competitive is more pressing than ever.

Co-innovation emerges as a strategic response to these challenges. A prominent marketing specialist defines co-innovation as helping companies by “calling on partners with diverse profiles and an ecosystem of client expertise, including startups, bringing fresh and new ideas, to fill knowledge gaps and allow them to create innovative products and services more quickly that will meet their audience.”

This approach doesn't merely involve traditional product or service exchanges; it represents a philosophical shift towards leveraging collective intelligence within a company’s IT ecosystem to anticipate market trends.

At the heart of co-innovation is the engagement with a valuable yet often underutilised asset: the customers. Through active collaboration, businesses can tap directly into their clients’ needs and desires, viewing the world through their eyes. This process allows for incorporating customer feedback into new offerings and fosters an ongoing dialogue that can lead to sustainable and responsive innovation strategies.

For technology companies, co-innovation provides a gateway to previously untapped pools of knowledge. Co-innovation encourages alternative working methods and grants development teams access to a broader spectrum of creativity, particularly in enhancing product capabilities and designing solutions that resonate more deeply with users.

Build a brand community first

Co-innovation isn’t possible without a committed community backing your brand.  Establishing or enhancing this brand community is a crucial initial step if it isn't already in place. This involves more than just surveying your followers; it means creating a space where true fans, supporters, and brand advocates can connect, discuss, and share their thoughts on what they like or dislike about your brand, product, or service. Once such a community is established, you can effectively implement a co-innovation strategy.

Many successful businesses have adopted co-innovation not only as a concept but as a vital part of their operational processes. LEGO, for example, stands out as a leader. The company actively involves its customers in the innovation process by allowing them to submit and vote on new product ideas, which simultaneously encourages employees to explore unique designs and creative solutions.

What do you need for a successful co-innovation strategy?

To adopt a successful co-innovation strategy, specific essential prerequisites must be in place:

1. Adopt the right mindset

Adopting the right mindset primarily involves recognising that innovation is not merely about "creative inspiration" that magically emanates from a single individual's mind.

Understanding that neither vendors nor customers possess the absolute truth is crucial. Instead, co-innovation should be viewed as a methodical approach to creating value through a discussion framework in which the truth emerges, characterised by having an open mind.

2. Encourage communication and collaboration

Transparent, regular, and formalised communication with all parties involved is essential. Setting the right expectations and avoiding false promises are fundamental behaviours. Co-innovation depends on long-standing trust built over time between customers and the vendor.

For instance, at Semarchy, we’ve established two formal programmes. After collecting feedback from customers and partners, we follow up with an “Open Innovation” phase, which involves collaborating with interested customers and partners to align the development with their expectations. The process concludes with an “Early Adopter” programme, providing early access to upcoming products or features to gather crucial feedback and validate key product capabilities.

3. Have the right tools in place

While the formal programmes drive open innovation, the entire company must be involved. Employees across departments must be equipped and trained to recognise the importance of the signals they encounter in their daily tasks and understand how to raise them.

Adopting a structured approach to innovation is crucial. Research by Accenture shows companies with extensive innovation governance experience double the revenue growth compared to those that don’t. Semarchy utilises tools like Slack and Jira Product Discovery to collect, track, and assess all feedback, ensuring prompt responses.

Utilising the results

Once you’ve implemented your co-innovation strategy successfully, you are left with various innovations from your customers and stakeholders that can or can’t be implemented. Some may be ideas parked for a later date due to feasibility, with others potentially discarded for the same reason. Once you have a list of potential ideas, the process of implementation can begin, just as with any other product innovation your teams work on.

It is important to remember that integrating co-innovation doesn’t mean abandoning the research and development capabilities of your teams. In fact, their importance and value are more enhanced when working with a co-innovation strategy. While this method only exists through information sharing, management will need to make more strategic decisions about which research and development capabilities the firm retains internally.

A trigger for breakthroughs 

Whether you’re looking to spark new ideas or refine existing products, co-innovation can be an invaluable approach to achieving breakthroughs and delivering value in an ever-competitive market. It offers an array of undeniable advantages to companies that adopt this collaborative approach. However, co-innovation is not just the prerogative of large corporations.

By engaging internal and external stakeholders, businesses gain access to diverse perspectives and ideas, accelerating the development of new products or services and cutting expenses. Moreover, this dynamic promotes a constant feedback loop, where end-user feedback fuels the continuous improvement of products and services, benefiting all stakeholders.

Just a word of caution, though: co-innovation should never be a "customer-specific design" framework. Product teams must consider their entire user population and product vision to ultimately create value for their customers and company.

By moving beyond the conventional limits of innovation, co-innovation becomes a potent driver for growth and success, enabling companies to remain agile and relevant in a constantly evolving landscape.

FX Nicolas is Chief Product Officer, Semarchy