Academic journal article Research-Technology Management

Innovation Ecosystems: An Interview with Ron Adner: Ron Adner Talks with Jim Euchner about the Challenges and Benefits of Managing Your Innovation Ecosystem

Academic journal article Research-Technology Management

Innovation Ecosystems: An Interview with Ron Adner: Ron Adner Talks with Jim Euchner about the Challenges and Benefits of Managing Your Innovation Ecosystem

Article excerpt

Innovation is increasingly complex and interdependent. It is unlikely that a company will control all of the resources necessary for success with a significant new innovation. In this interview, Ron Adner discusses the concept of the innovation ecosystem. He discusses practical tools innovators can use to identify members in an innovation's ecosystem, understand the motivations of those parties, and manage their alignment in order to increase the chances of success for your innovation.

JIM EUCHNER [JE]: I would like to start with the concept of an innovation ecosystem. What do you mean when you talk about ecosystems?

RON ADNER [RA]: When most organizations try to innovate, the primary focus of attention is on the innovation itself, including the commercial wrapper that makes it an actual business proposition. From there, attention moves to execution. This is the bread and butter of what we think about when we think about innovation. It's all critical, but implied within the proposition of many innovations is an additional set of factors and an additional set of actors that need to come together in order for the innovation's value to be realized.

That larger set of actors is the innovation ecosystem, and I believe that it is important to make that set of dependencies as explicit as possible as early as possible. When you think about the strategy for an innovation, you should be incorporating into that strategy all the dependencies and partnerships that are necessary for success and how you are going to align them to make the innovation work in the real world.

JE: Who are the ecosystem members, typically?

RA: Members of the ecosystem are the partners that you depend on for success. They include the usual supply-chain partners, the people who lie on the critical path of the innovation itself, but they often also include parties who are not directly required for the product or service but who are necessary for its ultimate success. These can include traditional complementors (such as software developers for hardware platforms, or charging infrastructure providers for electric cars), but it is critical to understand that ecosystem partnerships are not just technology based or product based.

Co-innovations can also be procedural: someone needs to come up with a new process or a new procedure in order to make use of the core innovation. Those innovations have to be considered from the outset.

JE: You have identified two distinct risks: the co-innovation risk and the adoption-chain risk. Can you explain each of them?

RA: The moment you start expanding your focus beyond execution and your ability to manage your supply chain, you will find partners that are important but that you do not have direct visibility into. How do you think about this nebulous cloud of the ecosystem and the risks it introduces? For me, the two helpful categories are co-innovation risk and adoption-chain risk.

Co-innovation risk concerns other innovations that need to be successful in order for your innovation to matter. You need to ask, does anyone else need to innovate to make my innovation successful? Those co-innovations can be product technologies, but they can be other kinds of changes required for success. Innovation is change, and it requires change among multiple parties. Whether it's a new training program that needs to be developed, a new certification process that needs to be implemented, or a complementary technology, you are dependent on other innovators. That's co-innovation, for me.

That's distinct from the requirements of the adoption chain. The adoption chain question is, who else needs to buy in to enable adoption of my innovation? It is often the case that many parties need to agree to play. The critical issue when thinking about adoption chains is that the different parties will be approaching the choice of whether or not to participate based on their own concerns. …

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