7 tips for successful open innovation in China

by | May 30, 2012

An increasing number of Multinational Companies are turning to China as a template for successfully orchestrating open innovation within their organizations. Supportive government programs, more and more foreign-educated expats returning to Chinese shores and a thriving venture capital culture are all some reasons why open innovation lives in China. Not to mention the fact that China is becoming a rapidly growing market for international corporations as consumers become more demanding of goods that meet their unique tastes and habits. Also, China has a long and proud history of its people becoming quite resourceful and creative to improve their lot in life and they are now applying these skill sets in creating new technologies and business models in a very practical attitude in the marketplace.

Innovation Management has listed 7 steps to successful open innovation in China. We will briefly deal with each here, but do go and visit the IM site as it is a fascinating article.

News stand in Beijing. Photo: kevinpoh/Flickr.

News stand in Beijing. Photo: kevinpoh/Flickr.

1. Know your objectives and have internal processes aligned with these

Companies could have many different objectives for open innovation in China. Businesses could be looking for innovations that could work well back home, ideas that could work well in China and other emerging economies, to forge strategic partnerships and gain a foothold in networks with major organizations and influencers and to complement their own research and development. Whatever the objectives are, make sure key stakeholders back home are aware of them to help the process run more smoothly and to allow a clearer path to these goals.

2. Have a clear three-year plan

Slow and steady wins the race. Hurrying in and out of an open innovation strategy in China is worse than not starting the effort at all. Chinese society is built on relationships and earning trust, so take your time. This is something that must be approached carefully and thoughtfully, not at lightning speed.

3. Carry out follow-ups quickly and keep potential partners in the loop

“Crossing the river while touching the stones” is a popular Chinese proverb. Chinese executives make decisions quickly and with the limited amount of information at hand. Their decisions are much more fluid and can change based on more data coming in, compared to their Western counterparts, whose judgements tend to be a little more rigid. It is also important to follow-up after discussions have taken place, even when a working partnership did not arise.

4. Share your knowledge and benchmarks of success

Better-informed partners come up with better ideas. It is beneficial for foreign companies seeking to establish a foothold within China to disclose as much non-confidential information of their businesses as they can, including background information and innovation needs and desired outcomes.

5. Break it down to build it up

One-stop shops that house all innovation capabilities and talents under the one roof are rare in China. It is still an emerging economy and, as such, many businesses may not have huge resources to turn into innovation giants overnights. However, such is China’s population that one small business that focuses on one key product or service can do well in a given market sector.

6. Train and lead

Once you have found suitable business allies in China that have long-term allegiance prospects, it may be beneficial to invest in some training with your new peers. Foreign businesses should show that they want to share and learn and they will be much more enriched from the experience thanks to their Chinese partnerships.

7. Innovation can come in different forms

Consider technological, product, marketing and business model innovation. Chinese consumers are open to new experiences and as the country’s population is so large, new products and initiatives can be trialled without impacting negatively on the business as a global brand.

Jeffrey Tobias

About Jeffrey Tobias

Dr Tobias is an accomplished innovation consultant and entrepreneurship strategist, drawing expertise from the academic, entrepreneurial and corporate worlds. Jeffrey’s commercial and business experience is particularly focussed on lean startup, design thinking and leadership. Prior to The Strategy Group, Jeffrey was Cisco’s Global Lead for Innovation in the Internet Business Solutions Group helping Fortune Global 500 companies improve customer experience and grow revenue by transforming how they do business.
Jeffrey is a professor of innovation and entrepreneurship teaching MBA students at the Australian Graduate School of Business at the University of New South Wales. An active angel investor, Jeffrey is on the board of various well-known startups.

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Managing Director, The Strategy Group

Dr Tobias is an accomplished innovation consultant and entrepreneurship strategist, drawing expertise from the academic, entrepreneurial and corporate worlds. Jeffrey’s commercial and business experience is particularly focussed on lean startup, design thinking and leadership. Prior to The Strategy Group, Jeffrey was Cisco’s Global Lead for Innovation in the Internet Business Solutions Group helping Fortune Global 500 companies improve customer experience and grow revenue by transforming how they do business.
Jeffrey is a professor of innovation and entrepreneurship teaching MBA students at the Australian Graduate School of Business at the University of New South Wales. An active angel investor, Jeffrey is on the board of various well known startups. Jeffrey’s corporate background includes leading global innovation strategy at Cisco, working with large corporates such as Adobe, Westpac, Telstra, Woolworths, and Perpetual.

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