Quick Take: Becoming an innovation intermediary

Can distributors become a force for change by acting as brokers of knowledge and resources that can help customers innovate?

Innovating as an intermediary

In last week’s Quick Take, I shared what I learned about the power of storytelling from my community for leading-edge innovations at TWIN IMPACT 2022. I hinted that my fellow TWINians inspired me to identify five breakthrough ideas for radically reimagining distribution. In this edition, I share one of those ideas and hope that all B2B innovators at distribution companies, manufacturing organizations, customer groups, platforms, vendors, and universities  will take notice and help launch a radical transformation. The idea is that distributors can become “innovation intermediaries” and, by doing so, become a force for change. I was inspired by experiences shared in several workshops, and I’ve dug in and shared what I have found so far below.

Wake up and be awesome!

Distributors can transform by waking up to fill a role that already exists. Innovators outside of distribution have noticed that progress happens when organizations lean in to help others, sometimes as a public/private project, but often because a commercial relationship already exists. For distributors, it’s about understanding customer innovation needs, reaching out to the distributor’s suppliers, vendors, and experts, and bringing knowledge and resources to bear. The role is known as an “innovation intermediary.” It is defined as “any organization that acts as an agent or broker in any aspect of the innovation process between two or more parties.”

Elsevier, an organization focused on catalyzing innovation in healthcare, is calling for researchers to explore how innovation intermediaries can accelerate emerging digital technologies. Word-for-word, Elsevier’s call to action exactly applies to achieve the same mission for the future of distribution:

During the past decade, the business arena has undergone fundamental changes thanks to technological breakthroughs such as artificial intelligence, blockchain, and the Internet of Things … Whilst these emerging technologies generate new opportunities for innovation (new markets, new products and services, new and more efficient processes), many companies, particularly SMEs, lack the knowledge and capabilities to exploit these opportunities … Innovation intermediaries—public or private organisations that support firm-level and system-level innovation in various ways, such as creating knowledge links between organisations, sharing knowledge about particular technologies, providing knowledge-intensive services, and advising policymakers …—have grown in number and importance, and they play a key role in managing such challenges.

Here's a distributor example. McKesson, a distributor of pharmaceutical and medical-surgical products, positions itself as “advancing health outcomes for all.” McKesson knows that the “seed of transformative innovation in healthcare has to take root somewhere, and the most fertile ground is an innovator’s local community.” Acting as an innovation intermediary, McKesson’s Better Health Tour is an opportunity for local leaders to engage in candid conversations that may challenge and redefine priorities and catalyze innovative approaches. McKesson explains:

[The Better Health Tour is] not a marketing event or a trade show. We believe that the challenges of healthcare will only be solved by generating practical ideas, innovative approaches and new growth in the healthcare industry at the local level. The events have been designed to identify opportunities that will enable transformative innovation and provide participants with a new framework for thinking about the practical solutions that will lead to better health for both their own organizations and the community.

Distributors in all industries have significant advantages for acting as an innovation intermediary. Distributors live and work where their customers live and work, in the real world. Distributors are process-driven organizations and may leverage their expertise to ensure collaborators stay on track to achieve progress. And most importantly, distributors are already intermediaries and have the reputation and culture to bring others together for the benefit of customers. Distributors leaned in during the pandemic to help customers survive. Going forward, distributors can play a decisive role in helping customers and communities prosper through innovation.

Like McKesson, some distributors may act on their own as innovation intermediaries, while others may band with their industry associations and launch an intermediary innovation capability. Either way, distributors can move forward standing on the shoulders of considerable research and the experiences of established innovation intermediaries. In How to Choose the Right Innovation Intermediary, Ideas for Leaders writes that innovative intermediaries may provide ideas in five ways: broadcasting, brainstorming, licensing out, connecting/networking, or via expert teams.

In Quick Take: Ideas, individuals, institutions, and the freedom to innovate, I report on the Hoover Institute’s call for a new generation of leaders to join the fight for maintaining prosperity against the challenge of rising autocracies. Hoover’s message is for policymakers and it is common cause for distribution. Distributors contribute $7 trillion to our national economy. By embracing a new role as innovation intermediaries, distribution can become a massively influential force for change.

Your take?

Can you imagine your business as an innovation intermediary? How can I help? In my following newsletters, I will explore four additional ideas for radically reshaping distribution: regenerative distribution, distributing power, decentralized distribution (DeDi), and ecosystem linchpins. I hope you will join me in these explorations. Please share your comments below or reach me at mark.dancer@n4bi.com.