Five Steps to Unlocking
Russian Innovation for Your Company

Luda Kopeikina

To compete in today’s business world, innovation is key. Unfortunately, few companies do innovation well. In fact, according to one survey of 40 companies with revenues of over $1 billion, only a meager 5% has been able to build an innovation funnel that continuously produces innovative growth as a result of innovation-focused efforts.

Many companies are already familiar with the concept of looking overseas for the things their company is lacking, such as employees, technology, and information. But how about innovation? Can companies look to other countries for innovation? Yes. And the country to look to is Russia.

While most people don’t think of Russia for innovation, the fact is that Russia offers a great source of novel approaches for business. Already, companies like Xerox, Samsung, BP, IBM, Intel, and others have proven that Russian ingenuity can be tapped—and for substantial financial gain. For example, Xerox adopted a Russian technology that enabled the company to produce toner cartridges eight times faster than before.

News of Russia being a source of innovation should not come as a surprise. After all, it is a country of nearly 100% literacy, with a scientific community of an estimated million mathematicians, physicists, and engineers who, in the past, were able to create breakthrough advances in space travel, quantum physics, high temperature superconductivity, optics, organic and physical chemistry, nuclear weapons, and supersonic jets. In addition, Russian scientists have long worked in environments where breakthrough results were demanded from small investments. These demands have grown a culture of “out of the box” thinking, resulting in elegant and surprising solutions.

However, unlocking Russian innovation for use by Western companies is not easy. Language, cultural, and communication barriers stand in the way. The following suggestions will help you tap into all that Russia has to offer.

1. Find an experienced local partner: Identifying innovative technologies in Russia on your own is not an easy task. Many Russian researchers take a guarded and skeptical position toward working with foreign companies. Additionally, you can’t expect just “any” Russian engineer to find the technologies and innovations you desire. You have to teach them advanced innovation scouting discipline and methods. Then you have the issue of licensing or transferring the technology or innovation to the US. That’s why you need a skilled local partner to guide and manage the process. The partner you choose needs to have specific competencies: deep knowledge of both cultures at the senior executive level and extensive experience in technology identification and transfer process.

2. Start with a problem statement: According to Peter Drucker, technology innovation is the riskiest and the longest path to fruition. Often, new markets need to be created and new customer behaviors developed. Yet, most companies pursue exactly this difficult and risky path. A better approach is to develop several well focused “problem statements”—concise statements about areas where your company could achieve significant market differentiation if a technology was available. A problem statement can be a gap in the product portfolio or a technology limitation for a new market entry or a constraint in the manufacturing process. Make sure your problem statements are broad enough so they can be solved in a number of ways with potentially different technological approaches. At the same time, they need to be specific enough to tightly define a market need that was not addressable with the current technical state of the art. A good problem statement is not prescriptive from the technology point of view.

3. Look for demonstrated technologies: Initially it will be tempting to listen to proposals presenting completely new theoretical ideas about how to solve the problem. Realize, though, that your company’s overall effort will not go far in terms of business impact if you pursue the practice of funding “raw” ideas. To be successful at tapping into Russian innovation, only consider demonstrated technologies. These technologies might be in a different application or might only solve the problem partially, but they need to be more than someone’s brilliant idea.

4. Work with innovators who can deliver on the promises: If you spend time with innovators who cannot complete a technology evaluation project, you are wasting your time. Working with your local partner, institute a discipline of qualifying researchers based on their track record. Then, only invite innovators who are known to have delivered results. This is where having a local partner is crucial. In Russia, even though reference checking exists, references routinely misrepresent information during reference checking interviews. There are many cultural reasons for this phenomenon but, nonetheless, the information collected is often garbage. In Russia, only “deep reference checking” has value. In order to get an honest answer you have to go to people you trust and who trust you. Having access to a network of people who can provide honest references is a necessary component to success.

5. Measure and manage the process: The overall process consists of five major steps: scouting, screening, quick verification, in-depth evaluation with one to three phases, and transfer to operations. The scouting and screening steps should be performed by your local partner who will be adept at maneuvering through the Russian environment. If a technology is of interest, structure a quick verification project. These should be fast and low-cost. The intent is to quickly verify the technology’s performance in a particular application or to demonstrate a particular capability. A technology transitions into an in-depth evaluation project when it is determined that the technology has a significant business impact potential. At this point sufficient commercialization potential had been demonstrated so that the risk of further required development is minimized. No invention is required and all uncertainties are identified. Only then should you transfer the project to operations.

To be successful, you need to develop a clear definition of what the project is trying to achieve at each step of the process. To do so, answer the following questions:

• What is the objective?

• What constitutes success?

• What are the various constraints?

• What are the assumptions?

Having clarity of the overall process and of specific project objectives is one of the most critical parameters of success. When you define project success upfront, results are easy to measure and the project almost manages itself.  

Create an Innovation Funnel of Russian Technologies: In a world in which some claim that America is losing its innovation edge, the ability of US companies to develop innovation internally and identify it around the world is becoming increasingly critical to survival. Russia offers a rare combination of novel approaches, deep scientific knowledge across many disciplines, ingenuity in creating solutions, and the breadth of skills. In order to successfully innovate in the future, companies will need to turn to Russia for unique approaches. Being aware of critical success factors and ways to ensure them will differentiate winners from losers in the innovation game.

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