Have you ever been to a fast-moving square dance? Partners dance together, spin around a time or two, and then move onto new partners. As the dance progresses, some people return to their original partners, while others will dance once and leave the floor. If you pay attention, this resembles a fast-emerging business strategy that every technology innovator needs to know if they want to compete in the 21^st century: The co-economy. So are you square dancing or foxtrotting in this economy?

Like one big square dance, the co-economy relies on companies dynamically picking the right combination of vertical, horizontal and regional specialist partners.

You have to come up with the ones who have the right experience, relationships, technology and skills to develop the right solution for the customer.

Too many businesses are still doing the old-fashioned foxtrot, holding onto just one or two existing, “strategic” partners, using the same old steps and proprietary, well-tested moves. These foxtrotters keep their “innovations” tightly concealed within their organization’s four walls, often due to fear of a competitor stealing their ideas to gain an edge, or concern that the market will dramatically shift before the solution is developed.

Given the complexity and pace of change in our digital economy, this “fox-trot” model is no longer sustainable.

With the speed of innovation and technological evolution at an all-time high, customers are increasingly questioning why they should pay premiums for custom solutions based on proprietary or semi-proprietary technologies. Instead, they now expect horizontal, vertical and regional specialists to work together to develop scalable business solutions.

These solutions will be based on open systems and open standards that are interoperable and future-proofed. Because today’s business climate demands speed, agility, lower costs and more personalized customer experiences than never before. Customers expect more and will quickly take their business elsewhere if you cannot swiftly meet their needs.

Thus, companies flying solo are making a crucial mistake that can jeopardize their very survival.

In short, you cannot operate in a silo – you must build an ecosystem of customers and partners, large and small, and start co-innovating with them.

Whether you realize it or not, the world is already shifting to a co-economy, with more engagement among customers, audiences and markets than ever before.

Just about every day, surprising new partnerships arise between players in adjacent or even opposite markets, as companies such as Amazon AWS and VMware, Google and Honda. My own employer, Cisco, and CenturyLink teamed up to deliver new value for customers. Thus, technology leaders must realize the single-vendor model is no longer viable.

Here’s how you can get started capitalizing on the co-economy:

Change your perception.

Think of the co-economy as a new approach to business partnerships. Focus on more than the on one-off or occasional engagements, or even long-standing, fixed relationships with value-added resellers (VARs) or systems integrators. The co-economy involves working closely with a vast range of third parties – including vendors, startups, government agencies, researchers and academics.

By tapping into a diverse set of resources with a variety of insights and experiences, you are better-equipped to create and deliver customized, disruptive solutions. These solutions are more open and interoperable – and honest. Rarely do the best ideas arise when all partners hail from the same background, industry or market.

But most importantly, your customers must be involved in your innovation process from day one.

The customer must be active contributors along each step of the way (not just a beta tester or someone who signs on the dotted line upon the project’s completion). This step ensures that the solutions you deliver address their very specific business problem. It also helps validate the scalability of that solution. Odds are that other businesses are facing the same challenges that you and your partners are.

Now, they will be able to replicate your initial results time and time again for continued gains.

Round up your partners.

You probably already have some sort of partner program or alliance network in place.

As you prepare to dive headfirst into the co-economy, revisit current business relationships to determine how to enhance the alliance and explore new opportunities for collaboration.

Don’t stop there. Broaden your circle and identify how you can work with new kinds of partners. If you are unsure where to start, don’t be afraid to think outside the box and leave your comfort zone behind. Attend an open house at a local startup or participate in a nearby university’s research program. Get to know these partners finding out their strengths, weaknesses and what makes them tick.

The more you understand their business, the better you can determine how they can help yours, and vice versa.

Don’t forget your internal teams

Your own internal teams are just as vital to your partner ecosystems as outside players.

Therefore, it’s important to tear down cross-functional silos and bring together departments that once operated alone.

For example, if you are exploring Internet of Things (IoT) technologies, bring together information technology (IT) and operational technology (OT) groups. Although these departments have traditionally operated in isolation, IoT requires IT’s expertise in horizontal technologies, and OT’s domain know-how. Now you need both working together.

Note that you may face some change management challenges as you marry unfamiliar groups. However, transforming your own culture is a critical step in making the most of the co-economy.

While the word (co-ecomony) itself has yet to become a household phrase, the co-economy is here now and it’s here to stay. Whether your business is ready or not — look in the world — the co-economy has been working in every other part of life for centuries.

Competition will only become fiercer, and it will take more than traditional business partnerships to deliver true value to your customers. I encourage you to change your thinking and make a conscious effort to form and hone meaningful relationships with diverse partners.

Find ways to involve your customers in your co-innovation process and break down internal silos. You’ll be square-dancing your way into the co-economy in no time.

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These entrepreneurs are the ones that work in corporations while working on their innovation. These are they who toiled furiously day and night in their garage, or took out a second mortgage on their home.

We’ve all heard the romantic anecdotes of entrepreneurs.

How often does this really happen?

Is this a requirement for a person to be an entrepreneur? Maybe once upon a time,– but the answers these days would be, “hardly ever” and “of course not.”

Did these entrepreneurs ever create their innovation and build their company single-handedly — without any assistance from others?  Once again, “of course not.”

Conversely, let’s say these entrepreneurs were given a supportive environment with a big-picture view.

Let’s give them a view that encourages and inspires them to pursue their vision without having to hole up in the garage or put their family’s home at risk. Would they go for it? If would certainly seem so.

The lonely entrepreneur.

The notion of the lonely entrepreneur taking huge personal risks to turn an idea into an enormous success is indeed romantic. We all like to see the underdog win in a rags-to-riches story – but it is generally inaccurate and counter-productive.

The truth is that entrepreneurs today cannot act alone.

An entrepreneur must have interactions, resources, and mentors to grow their innovation. They will need partners on a variety of fronts to transform their innovation into a viable product. In today’s digital economy, entrepreneurism thrives best in an environment where it can be nurtured.

Support frees the innovator to obsess on developing the idea more than stressing over the next round of funding.

While some may try to claim that there’s no such thing as a corporate entrepreneur, the reality is that corporate environments today can often be the best breeding grounds for innovation, enabling in-house entrepreneurs to thrive as well as, or even better than, in a startup environment.

Let’s take a reality check on what type of environment best suits the needs of an entrepreneur in today’s world.

Fertile ground for idea generation. 

Sometimes idea generation is viewed as a magical process. Environmental factors that can create an innovation greenhouse. Research from numerous sources has shown that the ideal environment for idea generation provides diverse, collaborative, cross-functional connections as well as the ability to experiment.

The ideal environment also has a win-together mindset that includes different perspectives, which is a proven formula for the most successful innovations.

The environment should acknowledge that innovation can come from anyone and is not limited to technology.

A better business process or an improved way to deliver product to customers, for example, could have just as much impact as a new piece of technology.

Government-funded or private research facilities at universities or research institutes can provide some of the elements needed.  Large companies are also well-suited to create a cross-functional, collaborative, win-together environment. Demonstrated support has been shown by innovation incubators such as Google’s Area 120, Intel’s India Maker Lab, and Adobe’s Kickbox.

Focus on the innovator, not the innovation.  

Just as an apple tree seedling will eventually bear fruit if it is nurtured, so it is with entrepreneurs. Entrepreneurs will need expert resources, training, development tools and mentors to guide them. Along the way from innovation to initial funding to business partnerships and onward they can be supported.

Corporations with a culture of supporting entrepreneurship are able to provide guidance from the start.

Enabling the entrepreneur to get business buy-ins fast and tie their innovation to business needs is profitable for their corporations, too. Examples of successful programs at some of the world’s largest corporations, such as Cisco’s Innovate Everywhere Challenge.

Showing your entrepreneurs that cultural mindsets at many companies have shifted — will encourage risk-taking and learning from mistakes. Individual’s or venture team’s idea can fail in a safe zone — at corporate.

The attitude is, “This person’s first three ideas didn’t pan out, but let’s learn from it and see what the fourth one is.”

This prevailing attitude mitigates the stress of failure and encourages others within the organization to try their own ideas. The notion that an entrepreneur must take huge, personal risk is as flawed as the idea of the entrepreneur flying solo.

Allow the innovator to innovate.

Often the innovator can get bogged down by business or financial realities. This limits the entrepreneurs ability to create a truly disruptive innovation. It’s easy to point to established companies and say they are hog-tied by bureaucracy. On the other hand, entrepreneurs on the startup side can also easily find themselves in a quagmire of time-sucking issues.

At corporate the entrepreneur can skip the dog-and-pony shows — VCs — patent filings, facilities and HR issues — and business skepticism.

Corporations force entrepreneurs to limit their innovation to incremental gains. Google and Facebook were able to dodge the start-up quagmire by getting rolling on university servers first. This is where they established an appreciable market.

While Google and Facebook are examples of disruptive innovations coming from outside existing businesses — in recent years the most disruptive new innovations have come from within big companies, such as Apple’s iPod and iPhone.

We also have Toyota’s Prius, Nintendo’s Pokemon Go, and Amazon’s cloud services. These large companies had the capital and the ecosystem to incubate and scale truly revolutionary innovations.

Enable pursuit of passions.

A comprehensive study by the Enterprise Research Centre and described by Martin Zwilling — entrepreneurs have a drive. The drive is primarily the desire make their idea work to improve things.

On the financial side, if their idea turns into a winning lottery ticket for them, that’s great. Money is not what drives most entrepreneurs. Instead, an entrepreneur is motivated to change things by bringing their idea to life.

In corporations — this goes back to employee empowerment. Companies with “blue sky” programs like 3M encourage their employees to pursue their dream ideas. These companies provide support with the same intellectual freedom found in incubators or university dorm rooms.

Success should be rewarded within companies aiming to foster innovation or retain employees with an entrepreneurial heart.

Corporations and companies will need to provide the funding to support ideas and help their employees grow. Corporations can financially reward the employees who have brilliant ideas and drive them to fruition. If companies will allow their entrepreneur employees to keep their own ideas — they will benefit greatly.

A virtuous cycle for growth of an innovation. 

There needs to be a clear path for the progression of both the innovator and the innovation. In regional hotbeds of entrepreneurship — an innovator can move from research to mentors.

With the help of their own companies employee entrepreneurs can find angel investors and then on to VCs. The entrepreneur lives within the gates of the corporate investors — if these companies will stop squashing the entrepreneurship. Eventually, with corporate support there can be multiple exit options.

Research, mentors, market knowledge and capital — all at home.

Enterprises can establish similar virtuous cycles and have the benefit of already having many of the pieces  all in one place.

Connections with outside ecosystems. 

A corporation is an ecosystem of partners who can provide a wealth of knowledge, expertise and perspectives. The combined benefits are such that no single person, or even one company, can possess.

Such an ecosystem will help an entrepreneur achieve the best outcome for an innovation. Initially, these partners can offer validation for their idea. For startups, idea validation typically comes from the opinions of a collection of VCs.

For entrepreneurs in corporations, customers and business partners can provide validation based on market information.

With a combined idea validation and connections with the outside ecosystem — a full company can provide business mentorship. These connections can lead to commercialization and sales channels.

Corporations can provide many advantages for their entrepreneurs in the commercialization phase. The businesses have already done their market research and muscle can create or accelerate markets.

Try to imagine an early-stage startup getting the music industry to agree to the iTunes business plan.

The combination of these attributes — an inclusive, cross-functional environment with resources focused on the innovator. This industry has a virtuous cycle for innovation growth which can enable entrepreneurs to thrive.

Corporations with a true commitment to innovation are uniquely positioned to offer the best of both worlds.

Not all corporations have the atmosphere of a startup-like environment with the additional support to nurture entrepreneurs. With these resources — companies can create cycles that their innovators can access.

If the corporations are willing to be the support their entrepreneurs need — they can readily provide their counterparts needs. If a corporation or business is willing to give the freedom to their entrepreneur employees — the benefits cannot be outpaced.

Corporate innovators who resist grabbing all credits and ideas for themselves are rare. Entrepreneurs who find true help in the workplace will find a distinct competitive advantage for successful entrepreneurism.

Co-authored by Maciej Kranz, Vice President of Strategic Innovation, and Alex Goryachev, Managing Director, Corporate Strategic Innovation Group, Cisco

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