In any supplier/customer relationship, both sides (but quite often the supplier) desire clarity regarding the certainty of the relationship. When there is uncertainty, there is angst. Some of this is natural and necessary. However, Michael Fruhling believes that in open innovation it is needlessly excessive. How can it be reduced?

Fruhling’s Uncertainty Principle: Tech provider uncertainty is proportional to the uncertainty associated with the program for which it is being considered.

In other words, tech provider uncertainty is directly related to how pressing the tech seeking company’s need is and how committed they are to adopting a solution. Approved programs with defined market timing have considerably greater support and more closely managed decision paths than those which don’t.

For perspective, last summer one of my clients had a pressing Need for an external provider with specific expertise to support a high priority project. They funded development work within 6 weeks of approving a qualified provider. This work is currently advancing at a deliberate pace with defined, close-in market timing.

Compare this with what might be described as a typical technology “discovery” process. In discovery, a customer seeks solutions for persistent strategic needs, and routinely contacts external parties for exploratory discussions. However, there may not be a specific project or timetable that must be adhered to. The evaluation process reflects this lack of urgency. Despite a degree of interest, months can pass without decisive action or a clear expression of intent, as things have not advanced beyond exploration to formal project status.

Unfortunately, external technology providers don’t typically have the benefit of this “insider” knowledge. They can’t discern their submission’s position in a corporate priority hierarchy. As the above examples describe, there can be a vast difference between how a company approaches a pressing technical need and how it pursues a less critical (but still important) need or want. Since this can occur with some frequency, what can tech providers do to help reduce their external partner’s uncertainty and discomfort?

Be transparent with partners about the overall evaluation and decision making process, including timing for each step and where they currently are along this path.

Your company may not be able to disclose to a provider that (for example) their technology is being evaluated for an active, staffed project which is currently calendared for Spring, 2014. However, I see nothing wrong with admitting (where applicable) that there presently isn’t an approved project for their technology, and that the purpose of the current exploration is to seek to establish a foundation for earning internal customer interest. This type of admission should temper the submitter’s expectations and anxiousness. They may not be happy to learn it, and yes, this could cause some providers to lose interest. Still, they should appreciate your candor and that you haven’t misled them.

Be responsive to your partners’s concerns. Make a conscious effort to understand and deliberately address their issues, especially if these may impact their continued viability as a candidate. For instance, a partner may have other “suitors” that could require them to make certain time-sensitive decisions or commitments. While a customer need not be forced to make a premature decision, they do need to consciously address the situation, including whatever risks may be associated with inaction.

Keep your commitments, including providing timely updates. Actions, even more than words powerfully demonstrate your interest and seriousness (and professionalism).

Each of these suggestions should be useful in helping to effectively manage external relationships as well as improving their quality. What are your thoughts on this subject?

By Michael Fruhling