Business Management Life

Joint efforts to co-develop products and services can be a way to leverage limited resources for increasing profitability for the collaboration partners. Key is to have confidence, risk tolerance and appropriate legal structures in place to make the partnership work. Then assign teams from both companies to work on the project. The focus should be on tasks to be accomplished, along with costs. As with all projects, continued executive management visibility and support for innovation can help drive these efforts to produce significant results.

Joint R&D can help partners spur innovation to produce supporting technology and new goods and services. For example Cambridge Fine Foods of Ontario, Canada, a $9 million business, partnered with Your Grocery Depot, a local retailer, to develop frozen foods for institutions such as prisons and lumber camps. In another example Cooper Farms of St. Henry, Ohio partnered with Prime Equipment of Columbus, Ohio, a $12 million business, to develop meat processing equipment. Both partnerships were successful in creating new and profitable business.

Crossing Industry Boundaries

While these examples are in food related businesses, the keys to success crossed all boundaries. In both cases there were clearly assigned project managers, support teams, budgets and executive management visibility for the projects. The business relationships with the legal aspects for investment levels, sharing of end products, intellectual property and technology, were in place, but without sustained commitment to keep the teams focused on end results and customer acceptance; the results would not have been as effective.

Develop and Work the Plan

Once the intellectual property, duration, investment budgets and team assignments are established the teams should define the initial working agreements and communication channels. These can include:

• Integrated project plan with agreed milestones, review points and measurements

• Agreed budgets and expense plans

• Defined reporting relationships for the team leaders

• Resource allocation and availability plans

• Testing and product qualification plans

• Communication paths to each partner’s executive management

• Regular status and expenditure reports

• Potential customer evaluation plans and responses

• Conflict resolution paths

• Visibility and recognition mechanisms in both organizations for the effort

Risk Can be Managed, but Not Eliminated

Part of this process needs to recognize that not every step will go according to plan and each organization must up front indicate when any lack of results will terminate the effort. Innovation has risk, and if either organization has too low a tolerance then partnership will be much more difficult to maintain.

The nature of R&D is that not every project will produce a successful end product so a success rate of one in ten for basic technology is not unusual, while product application efforts like these food industry examples may have the opposite success rate of nine out of ten, or better.

Can 2%2B2 Equal 64?

These joint innovation projects can create new possibilities and profitable growth. At the same time by sharing the risk among the partners, the parties leverage limited financial, physical and intellectual resources to create new possibilities and spur growth. In these cases 2 plus 2 can equal far more than four, even 64!

Don Mann is CEO of RiteMann Consulting Inc.; a company that helps businesses improve sales, profits, cash flow, people effectiveness and innovation, and is located in the Wilmington DE area.

He has delivered solid results in organizations ranging from start-ups to Fortune 100 by leveraging best practices across industries. This includes global businesses in financial services, manufacturing, chemicals, distribution and high technology, and well as governmental, military and community organizations. His results include developing and improving highly productive and lean organizations with improved sales and profits, more rapid responsiveness, reduced stress and renewed focus on customer delight.

For inquiries please contact him at http://www.RiteMann.com

Useful Links:

Find out more on car loan UK.

This entry was posted on Wednesday, March 5th, 2008 at 9:35 am and is filed under Leadership, Management, Hiring, Ideas, Tips, Blog Carnival. You can subscribe via RSS 2.0 feed to this post's comments. Responses are currently closed, but you can trackback from your own site.