The agile supply chain of innovation

Over recent weeks, I've been encouraged to see several large organisations extend their hand and acknowledge the value that startups and entrepreneurs can bring to the marketplace.

I recently posted an update taking my hat off to Asos for their Fashion Discovery campaign which seeks to nurture emerging fashion brands and offer them a distribution channel to the marketplace. With their apparent links to the British Fashion Council and Graduate Fashion Week, it's great to see a progressive organisation plug into the emerging talent pool and make a visible gesture towards sustainability in the talent sense.

I also noted L'Oreal doing similar things in start up acceleration with their Founders Factory initiative and the lifestyle sector certainly looks an exciting place to be at the moment. What with the Virgin Media #Voom2016 campaign across sectors and the two sector-specific campaigns above, the pipeline of innovation cultivation certainly seems abuzz of recent months. Added stimulus to invigorate the UK recovery perhaps ? Maybe.

My first real career exposure to the concept of the innovation supply chain came with a global pharmaceutical company and how it uses the biotech sector to help discover the next blockbuster drug ie outsourcing innovation.

For those of you familiar with the theory of portfolio analysis [of supply partners], the biotechs as "strategic" suppliers would sit firmly in the upper right quadrant of a classic 2x2 matrix, diametrically opposite the "non critical"/"acquisitive" quadrant in which categories such as stationery might sit, where switching suppliers is easy; and adjacent to both the "leverage" and "critical" quadrants typically characterised by competition/homogenous suppliers and unique suppliers respectively.

Turning our attention back to the upper right quadrant again, the population of this area would typically enjoy shared risk/shared reward and look at long term strategic planning with their prospective supply partners.

So that poses an interesting conundrum. One of the biggest characteristics of startups/SMEs and entrepreneurs is arguably their agility compared to their larger industry peers. One can go to market how one wishes and product (and brand for that matter) development can turn on a sixpence. Not when you're a large fish, arguably true even when you try to organise yourself as smaller centres of excellence still within the same large corporate umbrella, a la previously referred-to large pharmaceutical company.

So if you apply the theory of the portfolio analysis outlined above to the typical characteristics of a startup/SME/biotech - accepting all this to be true - this agility would tend to be slowly eroded by the contractual ties that would be accompany a risk and reward 'long term' supply relationship. Agility - one of the core characteristics of a start up entrepreneur/SME - gets eroded, over time. One can understand why the pitchers in the Dragons' Den agonise over giving up part of their agility and control...

So whilst I wholeheartedly applaud the notion of supporting entrepreneurs/startups and giving them a platform to grow and develop, my cautious self (those who know me know that bit) would urge some trepidation on getting into a relationship with those who might extend a hand to feed...you need to know what you're being fed...

Before committing, doing your homework to make sure you're getting the very best deal available in the marketplace and getting a good lawyer to go through contracts with a fine toothcomb would be my advice...make sure that your innovation doesn't adversely drag down your spirit, your agility and your value potential before time. And double check that professionals hired to do their job do their job properly.

There is a reason why you've come to market with your product and/or brand - cherish it - it's worth something. Don't sell out too soon....