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A strong corporate innovation strategy starts with knowing when to build new capabilities internally, acquire them, or partner with outside organizations. Innovation is about doing something differently to improve a product, service, or business operation. For most corporations, it’s already a major strategic priority, whether through product development, process improvement, research and development, or mergers and acquisitions.
But one of the most important decisions in any corporate innovation strategy is determining where to allocate resources. When should you build a capability internally, acquire it, or partner with an outside organization?
There is no single innovation playbook. Every company’s approach must reflect its customers, long-term strategic priorities, competitive advantages, and organizational culture.
When it comes to the build vs. buy vs. partner decision, here are three lessons I’ve learned from working with dozens of corporate innovation leaders over the last decade.
Resist the Natural Desire to Build Everything
Corporations are exceptionally good at hiring smart, talented people. Often, these are people who can build almost anything you ask them to. And that can become a problem when deciding how to allocate innovation resources.
An important first step for any innovation or strategy leader is identifying the capabilities that must remain in-house to preserve a competitive advantage.
What does your company do that competitors cannot easily replicate? Which technologies, processes, or capabilities are so essential to your business that you cannot afford to depend on a third party?
Once you’ve defined those core capabilities, two things become possible:
- You can concentrate resources on maintaining and strengthening your competitive advantage.
- You can confidently look outside your organization for supporting technologies and services rather than spending time building and maintaining systems that aren’t central to your business.
The question isn’t whether your team can build something. In many cases, you already know they can.
The harder question is determining what your team shouldn’t build so it can stay focused on what matters most.
Align Your Corporate Innovation Strategy with Internal Priorities
Innovation cannot succeed in isolation.
An effective corporate innovation strategy must connect directly with business units and corporate functions across the enterprise. When innovation leaders operate independently, their initiatives can become disconnected from organizational priorities, resulting in lengthy projects that struggle to gain traction or adoption.
Building relationships across the organization is essential. But the goal isn’t simply networking. It’s developing enough trust to have meaningful conversations about where other leaders are headed, what challenges they anticipate, and what might prevent them from reaching their goals.
The innovation leader’s job is to identify solutions that help business units move faster, overcome obstacles, and avoid costly setbacks.
When you consistently deliver that value, something important happens: Your colleagues begin bringing opportunities and challenges to you. Your pipeline of problems worth solving grows, and that’s a good thing.
In my experience, innovation leaders should spend well over 50% of their time working directly with colleagues across the organization.
Before deciding whether to build, buy, or partner, you must first understand the problem, its strategic importance, and what success looks like for the people responsible for implementing the solution.
Strengthen Corporate Innovation Through External Partnerships
Once you accept that your company cannot and should not build everything internally, the next challenge is developing a deliberate approach to finding the right external solutions.
Established suppliers and industry leaders will always have a place in that strategy. But they shouldn’t be your only source of innovation.
Emerging startups and breakthrough technologies can offer capabilities, perspectives, and opportunities that aren’t available through traditional channels.
This is where corporate startup partnerships become particularly valuable.
The challenge is that finding the right opportunities requires more than waiting for an interesting company to contact you or a promising technology to appear in your inbox.
You need to be proactive.
That means building relationships with startup ecosystems, technology developers, investors, and other innovation partners who can help identify emerging solutions before they become widely known. Programs like Ohio Third Frontier demonstrate the value of a connected innovation ecosystem, bringing together startups, industry expertise, and investment resources to help emerging technologies reach the market.
It also means maintaining consistent market intelligence so you understand which technologies are developing, which companies are gaining traction, and where potential partnerships or investment opportunities may align with your organization’s strategic priorities.
A strong external innovation network gives your enterprise access to more than new ideas. It creates a pipeline of potential solutions, strategic partnerships, and investment opportunities that can help your organization address real business challenges.
Building and maintaining that pipeline requires intentional effort, but it can become an important source of long-term competitive advantage.
Connecting Corporate Innovation Strategy to the Right Opportunities
The build vs. buy vs. partner decision is ultimately about focus.
The strongest corporate innovation strategies recognize what an organization does best, align innovation initiatives with internal priorities, and create opportunities to access capabilities beyond the enterprise.
At Entrepreneurs’ Center (EC), we help corporations connect with emerging startups and breakthrough technologies that align with their strategic and innovation priorities. Through our network of technology companies, entrepreneurs, and innovation partners, we help enterprises explore opportunities for collaboration, technology adoption, and strategic investment.
Looking for emerging technologies or startup partnerships that support your corporate innovation strategy?
Connect with Entrepreneurs’ Center to explore how we can help your organization identify new opportunities and build relationships that drive innovation.
