Nearly 20 years ago, as a business-unit CIO at  The McGraw-Hill Companies, my teams and I demonstrated how to co-create innovations with partners. Instead of writing RFPs and outsourcing projects, my leadership team oversaw product development with hybrid teams of employees and partner resources.

We taught our partners our agile practices and business drivers; they came with expertise in new technologies, automated testing, and natural language processing. Not only did we deliver ongoing innovations, but our partner’s resources stayed with us far longer than industry averages.

Digital Trailblazers co-create innovations

I first wrote about our how to co-create innovations with an agile operating model in Driving Digital and told the stories behind the approach in Digital Trailblazer. Our model is now incorporated in StarCIO Agile, and we help organizations adapt co-creation as a transformational core competency.

We discussed the co-creation mandate at a recent Coffee With Digital Trailblazers. Two of StarCIO’s partners shared their perspectives on how partnerships accelerate innovation and talent development.

“No one really innovates alone,” said Jay Cohen, SVP of digital transformation at StarCIO. “Co-creation turns collaboration into capability, and capability into continuous innovation.”

Juanita Olguin, go-to-market leader at StarCIO, remarked that scale is the real challenge. “Product teams already have huge portfolios to manage, and there’s no way they can both run the existing business and drive innovation without partnering and co-creating.”

How can you co-create innovations with partners work at your company? Here are five practical insights from speakers at the Coffee With Digital Trailblazers and other experts.

Get your people on board with co-creation

You won an investment to develop new AI capabilities. The DevOps and data science teams are excited to learn, prototype, and develop the capabilities. Business leads want to select the technologies, and one leader wants to pick their friend’s boutique agency to develop the capabilities.

Not so fast, says the CIO and the CISO. They face the pressure to go beyond AI POCs and deliver ROI, while avoiding the risk of rogue AI. They want their teams involved in developing AI agents but recognize they need outside expertise to guide the architecture, data management, and testing.

Bringing in partners may disappoint employees who want to take charge of the full development process. Some may even become detractors.

I asked speakers how Digital Trailblazers can avoid the not-invented-here syndrome when introducing partnerships and co-creation practices.

“It really comes down to basic change management and being honest that this is a survive‑or‑die moment,” says Martin Davis, CIO and managing partner at DUNELM Associates. “Teams need to understand that unless we make these new ways of working succeed, we will never move fast enough to keep up with the competition. That means overcoming ‘not invented here’ resistance by choosing compatible partners and doubling down on clarity, communication, and shared information.”

Co-create for learning and upskilling opportunities

Employees may fear outsourcing and AI if they sense they may lose their jobs in the process. Digital Trailblazers have to make sure employees understand what’s in it for them when they successfully collaborate and co-create with partners. Helping employees learn new skills and offering incentives to accelerate the delivery of business outcomes should be two drivers of the partnership.

“When you foster a collaborative mindset, many things can happen to address the fear that people will lose their jobs to AI,” says Heather May, founder and president of May Executive Search. “There’s a way of learning through doing, learning through your partners, and learning through experiences. You can help people realize that there is a future, but there has to be a cultural mindset around co-creating, whether for collaboration, learning, or upskilling.”

Define governance and guardrails up front

One reason CIOs and CISOs seek a stable set of co-creation partners is to avoid the tremendous overhead of signing and onboarding new partners. Beyond the contract, there’s work to define a governance model, configure the infrastructure, and onboard employees.

Let’s unpack these steps. A governance model ensures that employees and partners share a clear understanding of responsibilities and a common language for roles. What your organization calls a product owner, team lead, and scrum master may vary considerably from your partner’s standards. Extending your organization’s agile way of working, ITSM practices, and other processes is a key first step to onboarding a partner.

“Co‑creation fails when one side tries to stay in charge,” says Heather May. “It works when co‑leaders agree on guardrails, responsibilities, and how to contribute without stepping on each other’s toes.”

To ease infrastructure and integration, Derrick Butts, founder and vCISO at Continuums Strategies, suggests setting realistic expectations based on your organization’s policies, compliance procedures, required governance, and the legal requirements partners must meet. “Many times, I see companies fail because they try to kick off innovation programs in parallel to onboarding, as opposed to configuring the infrastructure in compliant ways upfront. They introduce more risk because they haven’t clearly defined and implemented the guardrails.”

A third consideration is educating everyone involved in the program about the contract’s intellectual property and data ownership terms. “Co-creation can lead to very interesting outcomes, especially in small language AI model development, and how you go about getting precision from agents and agentic AI,” says Joanne Friedman, CEO of ReilAI. “But with AI, we have to be especially careful about the intellectual property and also the ownership of data.”

Joanne also recommends understanding who your partner’s partners are. “Be very careful that your partner’s partners are not so deeply embedded in your partner’s organization.”

Align a partner’s technical capabilities

Looking beyond speakers at the Coffee With Digital Trailblazers, two experts weighed in with their insights. One clear area to consider when selecting co-creation partners is to review their technical expertise and openness to working with your organization’s digital operating model.

“Don’t just use a partner for a one-off project; instead, look for partners that can enable your internal team to experiment and learn in a continuous loop,” says Simon Margolis, Associate  CTO AI & ML at SADA, an Insights Company. “To effectively co-create with partners, especially when incorporating AI agents, focus on aligning their technical capabilities with your organizational agility. The best partner acts as a force multiplier, not a substitute, helping you unlock innovation by setting up guardrails and transferable frameworks that reduce your time-to-value for the next innovation.”

Co-own improving AI’s quality and operations

One more area to consider is that AI innovations aren’t one-time investments. Models need improvement and testing, while dev teams must consider feedback, regulation changes, performance, security, and other operational resilience considerations. Selecting a co-creation partner is not just about innovation; support for ongoing operations needs to be co-owned through a governance model.

“AI partnerships succeed when humans remain in the loop, not just to correct errors but to guide and refine how work gets done,” says Ashley Moser, CCO of MelodyArc. “The real value comes from systems that can explain their actions, learn from outcomes, and evolve their workflows alongside the enterprise. With humans in the loop, you expand what’s possible – you’re not limited to what can be automated and unlock more processes, customers, and use cases that can benefit from AI.”

Your AI innovation programs may be slower and less impactful without partner expertise and collaboration. Reach out to me with your questions.