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The Value of Peer-to-peer Innovation

By Langdon Morris

There are six distinct innovation views that typically need to be integrated into one clear perspective in order to come out with the best possible results: three outsider viewpoints and three insider perspectives: Outsider Perspectives – Knowledge Channel Innovation, Peer-to-Peer Innovation, Outside-In Innovation; Insider Perspectives – Technology-Driven Innovation, Bottom-Up Innovation, Top-Down Innovation. This is Part2 of a six-part series examining each of these perspectives.

“Peer-to-peer innovation” is one of the viewpoints to consider when building a comprehensive innovation practice. The idea of a viewpoint is that when dealing with complex problems the solutions that you are looking for will come to you when you have found the “right” viewpoint. Such a viewpoint is the way of looking at your problem that illuminates it in the most useful way. This is why computer scientist and Silicon Valley pioneer Alan Kay noted that “point of view is worth 80 IQ points” – when you find the best way to look at your problem, you suddenly become a genius.

In the pursuit of innovation in business, the nature of the problems you face usually require you to consider many different viewpoints because the innovation creator, the customer and many of the other players have inherently different needs, desires, and constraints. You have to consider multiple viewpoints because you are looking for solutions that meet all of the differing and competing needs in the most elegant way.

What Qualifies as a Peer-to-Peer Relationship?

The peer-to-peer process engages outsiders who are experts in their own domains and whose expertise is likely to complement the knowledge that your organization already has. In general, these peers will be those who work in other organizations, such as suppliers, partners and competitors.

Some examples of peer-to-peer relationships include:

  • Benchmarking is a form of peer-to-peer research that many companies continue to use as a stimulus to innovation. Benchmarking is about learning how others work to improve your own methods. It is important to note that successful benchmarkers often look at companies in completely different industries, because they know that they may get inspiration from the different business practices. For example, Taiichi Ohno, the creator of Toyota’s vaunted Kanban system, was inspired by the supply system that he saw in American grocery stores.
  • Standards groups like the ITU and IEEE are common forums for peer-to-peer communities – their roles are to channel engineering innovation in productive ways by establishing standards that become the basis for inter-company collaboration and for competition across entire industries.
  • Sometimes government agencies can drive peer innovation by bringing diverse groups together. During the 1990s, Japan’s infamous business ministry, MITI, encouraged mechanical and electrical engineers to collaborate, and the field of mechatronics (a new discipline that quickly became central to the field of robotics) was created. In the U.S., the Defense Department’s DARPA group has been stimulating peer innovation for decades and played a lead role in creating the Internet by supporting a process of peer-to-peer collaboration among computer scientists in many universities and companies. Another key government agency that is concerned with technology innovation is NASA. NASA’s major projects have engaged peer organizations in business and academia in the development of breakthroughs across the entire economy.

The Value of the Partnership

Most of this sort of work happens behind the scenes, wherein engineers from a vendor/supplier organizations work with engineers from a partner/customer organization on component technology design, development, and integration. For example, vendors of all sorts of computer hardware – drives, chips, power supplies, circuit boards, screens, and all other electronic components – help their customers design working computer systems. While this is usually more a matter of engineering in an application setting than innovation in the sense of creating new things, it is nevertheless critical to success. Managed properly, these relationships can also spark significant innovation.

For example, during the 1960s, the old cash register outfit, NCR, offered seminars to its customers on the many uses of the new electronic cash register. NCR led to the emergence of three of France’s most significant business enterprises – Accor Hotels, Auchan Hypermarkets and Carrefour Hypermarkets – each of which is now a major global enterprise with hundreds of thousands of employees and billions in revenues.

More recently, Apple approached Symbol Systems (a maker of barcode scanners) to help them develop a mobile cash register for use in Apple Stores. Today, in Apple’s New York Flagship store, you do not have to wait in line at a cash register to pay by credit card; every associate in the store can make the sale. The result: no lines, speedier transactions, happier customers!

Co-branding is sometimes a peer-to-peer process, as when PC makers put the “Intel Inside” sticker on their laptops they seek to enhance both their own brand and Intel’s. It is a short hop from “Intel Inside” to NASCAR advertising on wheels at 180 miles an hour; as NASCAR shows, co-branding often has more to do with marketing than actual research, but no one can deny the path breaking significance of NASCAR as a marketing innovation.

Research Collaborators

Significant added value in the peer-to-peer setting can come from research partnerships between companies. Arguably, this is the rarest and most difficult form of peer-to-peer innovation. It happens when researchers from two or more companies work together to create genuinely new products and services. Examples are hard to find, but one such collaboration is Nike-iPod, which is an example of both co-development and co-branding. (But both the iPod and the shoes are derivative products.) Another example is the Fridge Pack, that convenient cardboard box that holds your soda. It was developed by a partnership between a research firm, Point Forward, working in conjunction with the aluminum and cardboard suppliers.

In the end, peer-to-peer relationships sometimes lead to brand new products and product concepts; they also accelerate or improve the products and services that ultimately go to market and can be helpful tools for building a brand.

But most importantly, they are significant as a stimulus to learning as a way to bring important viewpoints into your innovation process. Since accelerated learning is at the very core of all innovation efforts, it is always good to see what your peers are thinking about and working on for the future, as this may significantly impact your own visions of what is possible.

About the Author:

Langdon Morris is a partner of InnovationLabs and author or co-author of six books. His most recent work, “Permanent Innovation: The Definitive Guide to the Principles, Strategies, and Methods of Successful Innovators,” is available as a free download at Contact Langdon Morris at lmorris (at) or visit