Innovation
Should We Build an Environment of Permissionless Innovation?
December 2, 2015
Alex Short
2 minutes

Elon Musk is a fascinating case study when it comes to innovation which was considered a flight risk (pardon the pun).  Musk runs three of the most innovative (and risky) companies today: SolarCity, Tesla and SpaceX, and is worth  $13 billion.  One thing connects his numerous business ventures: They all incited panic when they were in the developmental stage.  

In fact a lot of his innovations wouldn’t have existed today, if he hadn’t had the power to override the people who wanted to stop his advancement. Musk was the CEO of each of his ventures, and had the power to create an environment where he was allowed to invent and innovate without limitations.

But what about our suppliers? Do we empower them with this freedom? We often drive for supplier innovation however, are we ready to create an environment where innovation is limitless? Are we ready to remove the barriers to supplier innovation, and, more importantly, should we?

In a recent podcast I heard the case for creating an environment of ‘permissionless innovation’. Instead of having numerous regulations in place to drive ideas into statis, ‘permissionless innovation’ argues for an open landscape. A landscape which allows for dynamism and growth, for the free flowing of ideas, taking away the fear of failure.

Now many will quickly turn their nose up at an idea like this, straight away thinking of the dangers and problems associated with this approach. “No regulations, holy smokes are these guys crazy??” seems to be the typical corporate reply.

But my argument to procurement is that for too long you have taken ‘the precautionary principle’ approach, letting this trump ‘permissionless innovation’ the results are diminished economic growth, lower quality goods and an ageing business model. If team members are constantly forced through procedure and red tape then the natural place for innovation is the graveyard.

‘Permissionless innovation’ has been the secret ingredient that has helped the likes of Elon Musk fuel audacious and outrageous projects that are now set to change our world for ever. It has fuelled the success of much of the modern tech economy and the internet. Anyone with a brain understands that it is set to power the next great industrial revolution.

However your business could be one of the many that get left behind in this industrial revolution, because your stubbornness to continue to follow ‘the precautionary principle’ ensures there is a serious threat to long term prosperity, economic entrepreneurship and technological progress.

It’s time for change it’s time to look at your processes and procedures and take action. Maybe its time to think more like a startup.

Here are three simple starting points to help you’re team find that next Elon Musk innovation:

  • Introduce a KPI for you’re team that is 100% focussed on supplier innovation – this gives team members the drive to find that next big idea
  • Empower internal stakeholders to be more transparent with strategic suppliers, sharing future roadmaps – This helps the supplier plan and innovate to help you
  • Take a look at your current restrictions and bureaucracy and see how you can go about reducing them

Check out this 3D Performance Management whitepaper, it provides an innovative new perspective on buyer/supplier relationships as well as insight into how your organisation can move from measuring metrics to delivering innovation.


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Alex Short is Founder of Old St Labs he is passionate about building the next generation of business software. He is recognised as one of procurements thought leaders.
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