Imagine you are the leader of a newly formed External Technologies Sourcing team at a large company in the heavy equipment industry. A product group has come to you, asking for help. They are building a new generation of self-repairing machines. Progress has been made, but the product group lacks experience and sophistication in developing several of the key digital technologies.
This is great news. For the first six months, your team has struggled to get any engagement whatsoever from the business units. Finally, you have an inbound project request, from one of the company’s largest businesses. Eager to show results, you’ve already assembled a needs brief highlighting several strategies for tackling their needs. The product leader has approved the brief and your scouts are ready to get started on the search.
All the same, you’re worried. The technology areas are well outside of your firm’s established expertise. In many of the possible solution domains, your scouting team lacks access to a meaningful network of experts. The search for promising partners and technologies could take years. You’re concerned about spinning your wheels for months only to admit you’re no closer to a solution. For a young team eager to demonstrate its value to the business, the consequences could be dire. This might be your team’s only chance to prove its worth, and you’re not sure if you can guarantee success.
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Stories like this have become increasingly common over the past few years. On the whole, it has been exciting to see the proliferation of full-time Technology Scouting teams. More tech scouting roles are showing up on LinkedIn every day; it seems that we are constantly hearing about another company quietly launching their own new scouting team or department.
The problem is that most organizations try to build the scouting team internally, piece by piece, learning each lesson the hard way. This can be time-consuming and costly, often leading to multiple rounds of failure or sub-optimized performance. It may even cause an organization to reconsider the entire notion of a dedicated scouting team – thus shying away from a program that could have become highly rewarding if allowed to develop.
There are ways to avoid these pitfalls. Although technology scouting as a named discipline is fairly new, the roots of its practice go back decades. Many organizations have pockets of tech scouting process discipline and expertise – sometimes as a fly-by-night operation, other times as a part-time responsibility for R&D managers, and in some cases as an explicit operation within a broader Open Innovation mission. In addition, there are a number of service providers staffed with folks who have spent most of their careers doing this work – both within large enterprises and on the provider side.
The most common approach is the Split-Competency model of tech scouting, in which an in-house team of scouts acts as the liaison between internal business needs and external sourcing efforts. The in-house team works directly with product and business leaders to develop needs statements and prepare scouting briefs. From there, they delegate the legwork of disciplined searches to a third-party provider with deep experience in building search strategies, sourcing hard-to-find technologies, and identifying the right technology development partners.
The Split-Competency approach offers significant benefits in speed, cost, and quality, if you choose a partner with a superior breadth of resources and depth of capabilities. Often, small in-house tech scouting teams only have the bandwidth for a limited set of activities – attending conferences, doing web searches, and tapping the firm’s existing relationships. By comparison, strong third-party service providers have accumulated extensive networks of specialists and experts. They also maintain well-oiled search and discovery practices capable of operating at any scale, giving them the ability to drive repeatable and cost-effective scouting initiatives. The right firm can turn what might have been a string of wild-goose-chases into a series of predictable, efficient, and highly productive scouting activities.
Less obvious, but equally important in the mid- to long-term, are the benefits of your internal team working alongside veteran scouts. Especially in the early- and mid-maturity phases of assembling an in-house scouting organization, it will take time to build a skill base and establish strong internal processes. Partnering with an experienced scouting firm can accelerate the institutional learning curve, providing a much stronger foundation (and in significantly less time) versus re-inventing the wheel on your own.
Many corporate scouting and open innovation teams have limited awareness of the range of provider options available. In many cases, your team’s chances of success will be considerably higher once you’ve defined the right model and paired your team with the right partner(s).
As you think about the right path for your organization, there’s a range of important considerations to keep in mind. To learn more about how to approach these decisions strategically, make sure to check out our thought paper on Tech Scouting Programs: Build-vs-Buy.