Innovation by Cooperation

As companies struggle to find new competitive advantage, they are using a number of techniques to stimulate organic growth. These approaches include working with respected experts to run workshops and hiring consulting firms to support and bring new perspectives. To extend R&D capability, some companies turn to universities to conduct research and exploration into areas the company does not otherwise have time or resources to explore. New Balance has an advanced product group, led by Edith Harmon, who we discussed in Chapter 1, “The New Breed of Innovator,” which is the greenhouse for organic growth in the company.

Harmon approached Carnegie Mellon University because she believes that the outcome of such relationships can complement and stimulate organic growth internally. she wanted the university to use its course in Integrated Product Development to explore new oppor­tunities for New Balance. She wanted to see what integrated teams of students could achieve with direction from faculty and her New Balance group, for their performance would illustrate what could be achieved with similar teams in-house.

The award-winning course at Carnegie Mellon integrates teams of students in industrial design, engineering, and marketing, support­ed by four faculty advisors representing three different colleges in the university. This course has a history of successful product concepts, demonstrating the power of the innovation process. There are now examples of other universities evolving a similar cooperative product development approach, a trend for companies to take advantage of.

The Carnegie Mellon course with New Balance yielded six suc­cessful product concepts for New Balance through six student teams in 16 weeks. This chapter focuses on one of those product concepts. The success of the course demonstrates the payoff of the innovation process, and it helped New Balance recognize how it could develop products internally that it had been outsourcing. over the years, the course has helped convince individuals such as Dee Kapur and Edith Harmon and companies such as Ford and New Balance that the inno­vation process delivers a high rate of return on investment.