Outsourcing: Matthew Heim, President of NineSigma (Part 5)

Sramana Mitra: Like any new concept, it takes time for the market to build up, right?

Matthew Heim: Yes, it does, and we are in that growth phase right now.

SM: Right. Here is a question that is perhaps more subtle. When a seeker chooses a solution provider, what is the basis of that selection? Innovation is a somewhat subjective discipline, because you don’t really know what kind of approach a team is going to apply to solving a problem or investigating a problem. Approaches can vary widely. Do you see that your seekers are testing what solutions and which directions people are going to follow, the researchers are going to follow?

MH: Typically, the selection takes place through a committee within the organization. The criteria that they are typically looking for are price, technology fit, the maturity of the technology – in other words, will it require a significant amount of additional research and development to get this technology to the point where we can integrate it – and cultural fit. Can we work with this individual, can we work with this entrepreneur? Can we work with this university professor? Those soft factors often play a role.

SM: You are saying it’s more price and cultural fit rather than the approach of problem solving?

MH: No, I am saying that these are contributing factors. I am saying the technology fit, the solution fit, is very important. It has to fit. And the maturity of that technology as well. Is it ready? Can we plug it right now, or will it take a lot of retrofit? Will it take a lot of further development? These are questions that are asked in the vetting process. And then, of course, cultural fit. Can I work with this other organization or this individual?  These are, of course, important factors as well as price.

SM: OK, fair enough. I understand what you are doing. What other interesting nuances of your business should be covered in this story? Do you have any other thoughts?

MH: Well, there are some amazing projects and prototypes that we are working on right now. For example, we have a service called linked innovation, and if you can imagine replacing the traditional consortium with an open innovation model, the traditional consortium typically consists of a group of companies and agencies and so forth that meet on a quarterly or a periodic basis. They go on and on and on, and typically, they don’t resolve anything or anything quickly. Our linked innovation solution pulls companies together. We immediately establish a goal. We use open innovation, whether it be our technology intelligence capabilities, our discovery services using RFPs, or targeted search. We will find a solution for the common problem that these organizations are looking to resolve within a very short period. We have done these in various areas already and in the area of bio-based packaging. we have done them on water, we use recycle, reduction of process based water and manufacturing.

It’s very interesting to see the different companies often times on a pre-competitive basis come together. Of course I can’t name them, but we have had two of the very major soft drink organizations, at the same time, two of the largest food companies sitting, and two of the largest consumer products companies all sitting around the same table working on a common solution that they have, working collaboratively on a pre-competitive basis. So, NineSigma will facilitate the process, bring the parties together, identify the common goal, create the brief and the process for solving the problem, whether it be one of our existing services or something else, but really driving toward quick resolution of the problem. We are working on a lot of new game-changing platform initiatives right now that I can’t go into too much detail about at this stage, but I would have a lot to talk about at the end of the year that will start to change the entire face of open innovation, making it more accessible to solution providers and solution seekers alike.

SM: Let me ask you one final question before we close, which is the question that is directly relevant to our entrepreneurs. Our leadership and our One Million by One Million members, how would you advise them to leverage your network to build their businesses?

MH: It’s a very good question, and it’s a very simple answer. Join the NineSigma network. It costs nothing. There’s no obligation. They are asked to identify, using keywords, their competencies and their capabilities. What NineSigma will do is every time a project comes up in this particular area, we will send them an RFP and they have the ability to participate in the open innovation process. We also send them periodic newsletters, RSS feeds, if they so desire, to keep them informed on all of the different project types that are taking place. We also provide them with a portal so that they can keep track of the statuses of the projects to which they are submitting proposals. We really try to take care of our solution providers because they are our biggest assets. It’s completely free of charge.

SM: Thanks very much; I think we have all learned a lot.

MH: Thank you. It was my pleasure.

This segment is part 5 in the series : Outsourcing: Matthew Heim, President of NineSigma
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