With the demand for innovation on the rise, and the ability to feed that hungry tiger becoming a greater and greater challenge, what can companies do to increase their odds of becoming more successful innovators? Some suggest that the best place to start is where the ideas for new products and services often originate — the R&D organization.

With traditional approaches to R&D failing to yield the kinds of returns demanded by the marketplace, management is under increasing pressure to make R&D pay. But how?

One approach is to embrace a broader, more open approach and to expand the circle of possible sources of new ideas to extend beyond the realm of the research scientist to that of customers, suppliers, marketing, engineering, etc. Such innovation networks are gaining ground as a powerful business strategy and have proven to be very effective among industry leaders like Procter & Gamble, IBM, Whirlpool, and others.

If innovation networks indeed are the answer, then the question becomes how does one go about setting up such innovation networks? How does an organization that once relied on carefully guarded R&D efforts to yield differentiated products and services evolve into one that capitalizes on the ideas of those outside its walls to guide its development efforts?

Clearly, making this kind of transformation is tricky business — which is why we're seeing organizations like Forrester Research, Booz Allen, and Boston Consulting Group conducting extensive research on this subject, and its also the reason that initiatives like IBM's recently launched R&D Consulting Service have begun to take hold.

In the wake of globalization and our ability to more readily access both markets and resources around the world — we seem to be on the verge of a major shift in how this business of R&D and product development is to be performed.

The bottom line? Management is on a quest to make its investments in R&D yield the kinds of results that often took years to accomplish using more conventional methods. In place of these conventional methods which typically relied on well-defined roles for those involved in research and those involved in applied science, we are seeing a hybrid approach in which scientists, engineers, designers, and marketing and product management are working much more closely together.

Indeed, its a whole new world out there both in terms of how product development is structured and how R&D organizations and product development teams are managed. So, stay tuned. These are precisely the kinds of issues that Innovate Forum will be exploring as it gears up for the coming year.