By Dennis D. McDonald

Innovation guru Jeffrey Phillips makes the following statement in You should outsource innovation if…:

“…if you can outsource your payroll, outsource manufacturing and other key elements of your business, why not outsource innovation?”

Phillips has seen too many instances where companies just didn’t have the ability to manage innovation effectively, even though they knew they had to innovate and had the people on staff who could do the job. The problem is, he says, that many just don’t make the time to manage the innovation process effectively. In the process, they fail at being able to generate new ideas and take them through the stages and cycles that are necessary to proving them out. Hence, he suggests that some companies should look at outsourcing the innovation process itself. It’s not about saving money, it’s about getting the job done.

It’s easy to have a knee-jerk reaction against this suggestion. Looking beyond the jobs that might be lost through outsourcing, you can begin to see some of the possibilities. For one thing, innovation isn’t all about putting on your thinking cap and waiting for a light bulb to appear over your head. There are methods and processes you can use to enhance the management of the innovation process. Many of these tools and techniques are based on the nitty gritty work associated with sweating the details of design, testing, evaluation, review, risk analysis, and ROI analysis. 

One danger that I see occurs when, in the process of outsourcing a process, the company also outsources part of its responsibility for strategic planning. (I’ve seen situations, for example, where corporations have outsourced a technology-dependent process to an industry- standard outsourcing. In the process, the company lost some of its ability to strategize the appropriate role that information technology could be playing in growing the business.)

Still, Phillips’ ideas is a good one, even if it only forces a company to think about innovation as a manageable process. Ideas are useless unless they are examined critically, nurtured, and given appropriate care and feeding. If outsourcing helps in this respect, why not try it?

Copyright (c) 2008 by Dennis D. McDonald