Best practices for successful industry-academia partnerships

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Partnering between industry and academia is not new; however, established models have yielded little returns and there continues to be a need for an optimized partnering model.

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Best practices for successful industry-academia partnerships

  1. 1. © 2014 Grant Thornton LLP | All rights reserved | U.S. member firm of Grant Thornton International Ltd Best practices for successful industry-academia partnerships _________________________________________________________ Advisory Services thought leadership The best approach to developing innovative product offerings is to start with the unmet need, define the product profile that addresses that need, then innovate to develop a product that addresses all critical aspects of that profile. The greatest innovation leaps happen when experts from across multiple disciplines collaborate. Most companies do not have all the innovation concepts within their four walls and must look outside to find partners with multidisciplinary expertise. While innovation collaborations can be found through various “open source” models, the deepest knowledge, most easily accessible, and most concentrated resources that can be leveraged for a flexible, scalable and repeatable partnership model are in the academic world. Partnering between industry and academia is not new; however, established models have yielded few returns and there continues to be a need for an optimized partnering model. Current challenges of industry- academia partnership models The challenge that most companies face is that industry speaks a completely different language from academia. They operate with different timelines and milestones. Thus, despite the numerous industry- academia initiatives that companies have embarked on, they have had few success stories to show for it. Both academia and industry need to change the way they approach their partnerships. Most partnership models don’t yield commercial products because they are narrow in scope, have little structure in the way of project management (both on the industry side as well as on the academic side), are based on superficial partnerships, and do not define or track performance. Challenge 1: Approach Many partnership models tend to be based on a “search-and-find” approach rather than a strategic fulfillment of an unmet need. Essentially, the industry partner goes to the academic institution searching their current technology portfolio for
  2. 2. © 2014 Grant Thornton LLP | All rights reserved | U.S. member firm of Grant Thornton International Ltd 2 a solution that could potentially help them address some of their unmet needs. Example: If the critical unmet need (target product profile) demands six key product features: 1. Fruit 2. Round 3. Orange 4. Iron content of ~0.1 mg 5. Potassium content of ~180 mg 6. Vitamin A content of ~225 IU The search-and-find method could result in a product that fulfills 50% of the defined product profile and touches the other 50% of the requirements: 1. Fruit 2. Round 3. Red 4. Iron content of ~0.1 mg 5. Potassium content of ~107 mg 6. Vitamin A content of ~54 IU You end up settling for an apple instead of the desired orange – big difference. Solution: Lead with strategy The most successful innovation partnerships are founded on the implementation of robust strategies that define the unmet need. Strategies should outline who the customers are, what they want, what the market will support and what the anticipated ROI is. Robust strategies are then translated to product profiles, which form the foundation for innovation concepts; delivering end products that address the strategic requirements outlined upfront. It is essential to keep bringing the innovation concepts back to the strategy; this will ensure you avoid embarking on great research ideas or products that are not commercially viable, or that you don’t develop a commercially viable product that can’t be implemented because of manufacturing or market access constraints. Challenge 2: Scope Many partnership models tend to be established on a 1:1 basis (i.e., one individual/function on the industry side with one key opinion leader/department at the academic institution). While there is value in these partnerships — including the development of trusted relationships — the scope of innovative concepts is limited to the handful of resources that are engaged on both sides. Example: On the academic side, a computer scientist can develop a sports app, but may not be able to make it as engaging as a gamer could. Or it may not be as content rich as a sports management/entertainment expert would make it. On the industry side, R&D may be able to dictate the research needs, but can’t define what the market demands or what the optimal go-to-market IT strategy should be. An industry-academia partnership consisting of any combination of these individuals (i.e., computer scientist and R&D, or sports management and commercial) will likely result in a suboptimal innovative concept compared to an industry-academia partnership that consists of a team with all these individuals combined. Solution: Create a broad, inclusive and multidisciplinary team Partnerships need to span all applicable departments of one or
  3. 3. © 2014 Grant Thornton LLP | All rights reserved | U.S. member firm of Grant Thornton International Ltd 3 more academic institutions; enabling and encouraging all relevant faculty members to participate in the innovation discussions. The larger and more collaborative the approach, the greater the probability of a more novel outcome. Engineers, gamers and fashion designers are likely to approach problems in very different ways. Put them together and the power of their combined creative thoughts will likely generate a unique solution to a problem that none of them would have found independently. Partnerships need to also include a cross-functional team from the industry side; R&D and commercial have different views of innovation and requirements of go-to-market products; together they complement each other. The more diverse the industry team, the more informative the guidance will be to shape the solution. Challenge 3: Type of partnership Many partnerships are “superficial” and consist of the industry partner “throwing money over the fence” to their academic partner and communicating the expected outcome to them. The industry partner is only slightly engaged or not at all until the end product is received from their academic partner. Example: An industry partner engages an academic partner to develop a smart textile to monitor vital health signs. They state upfront what they want, provide the academic institution with the grant and communicate their timeline. The academic partner is confident that they can deliver. The two groups touch base every two months for a status update where they are informed that the research is on track and the development is underway. But when the project is delivered, the industry partner realizes that the data being captured is not aligned with what they wanted, the design doesn’t enable them to maintain HIPAA compliance, and commercialization of the proposed design is tough and expensive. They conclude that they cannot go to market with this product. The academic institution delivered what their industry partner wanted; however, deeper analysis reveals that the details behind the product make it impossible to take to market. Solution: Foster deep partnerships driven by solid project management True partnerships require equal engagement and commitment from both parties. The industry partner must drive the direction of the R&D efforts to ensure the output will generate commercial value, while maintaining a sensitive balance so as not to disrupt or hamper the innovative ideas stemming from their academic partner. This type of partnership requires strategic project management of the combined (industry-academia) teams. It is critical to appoint the right objective/creative project lead to manage the industry-academia innovation partnership. The project manager must be able to manage
  4. 4. © 2014 Grant Thornton LLP | All rights reserved | U.S. member firm of Grant Thornton International Ltd 4 large complex programs, engage multidisciplinary teams on both the academic and industry side, and contribute to the development of the innovative product accordingly. Challenge 4: KPIs Many industry-academia partnerships do not establish key performance indicators (KPIs) that track success of the partnership, where success is tied to the development of a prototype or product that can be commercialized. Example: When budgets get reviewed and senior management asks, “What did we get for this investment?” — there’s silence. There are no products to point to, no KPIs that suggest growth is on the way, and no long- term roadmap or strategy that highlights what the anticipated ROI is. Solution: Implement KPIs and monitor success of partnerships As both sides of the equation establish and build these innovation collaboration models, they must define the desired outcome of these partnerships. They must establish KPIs that can help them track success of their models in the short, mid and long term. KPIs should be established along the entire innovation value chain and always linked back to the initiating strategic goals. Both academic institutions and industry players should establish KPIs independently within their respective entities, but also jointly with their partners. Some KPIs to consider include product licenses (numbers and dollars) arising directly from partnerships and products commercialized (numbers and ROI) as a result of a partnership. Measure success based on product transfer and commercialization, not just completed research initiatives. Setting the bar high is more challenging, but it will ultimately result in robust innovation partnerships that will fuel future growth. Contact Dalia El-Sherif, PhD Senior Manager, Advisory Services T 215.531.8784 E dalia.el-sherif@us.gt.com Lisa Walkush Principal, Advisory Services T 215.814.4000 E lisa.walkush@us.gt.com Key takeaways: Building successful industry- academia innovation partnerships Innovative solutions are in the universities — it is a matter of being able to source and develop them in an efficient and timely manner.  Lead with the strategy and unmet needs  Identify and build multidisciplinary academic teams to develop innovation concepts that address those needs  Project manage a cross- functional and multidisciplinary industry-academia team to translate the innovative concept into a tangible and commercially viable product  Measure success of your partnerships and continue to grow and refine them accordingly

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