Is Your Innovation Partnership Destined to Fail Before It Even Begins?
- Melinda Tually
- 18 minutes ago
- 5 min read
By Melinda Tually, Intelligence Director at Transformers Foundation
Welcome to the realm of climate innovation. Your team is aligned. The technology looks promising. But six months in, you're stuck in tricky negotiations, supplier relationships are strained, and the project is hemorrhaging resources.
Sound familiar?
The fashion industry's most promising climate-related innovations often stumble not because the technology fails, but because stakeholder partnerships weren't built on solid ground. Suppliers absorb hidden costs. Brands struggle with internal buy-in. Startups miscalculate their runway. Everyone enters with different expectations, and no one realizes it until it's too late.
Alongside our recent report, Unlocking Equity in Innovation, we created a series of Innovation Readiness Checklists for suppliers, brands, and innovation startups. These aren't just box-ticking exercises, they're strategic frameworks that reveal the hidden risks, unfair cost burdens, and misaligned expectations that derail partnerships before they can deliver impact.
For Suppliers: Protect Your Business While Enabling Innovation
Are you expected to shoulder all the R&D risk?
Suppliers face substantial risks when testing and implementing innovations. This is the case for their own solutions developed in-house, but when partnering with start-ups, they can often be expected to absorb costs that should be shared across the partnership. The Supplier Innovation Readiness Checklist helps you build equitable relationships by addressing six critical areas:
Alignment of Internal Objectives
Before committing resources, ensure cross-functional buy-in across legal, supply chain, operations, and board level. Understand what happens if the innovation or partnership fails, and determine the optimal entry structure, whether through direct investment, offtake agreements, or purchase commitments.
Innovator Profile Assessment
Not all start-ups understand the complexities of fashion supply chains. Evaluate their industry experience, supply chain integration knowledge, team expertise, financing stability, and business model. Visit their facilities, understand their investors' ROI expectations, and assess whether they have partnerships with credible incubators or industry coalitions which might help to mitigate risk.
Partnership Considerations
Set transparent expectations early, establish clear governance structures, and evaluate brand engagement levels. Are brands committed long-term, or is this a one-off marketing campaign? Does the innovator have realistic timelines? Will you be actively promoted in pilot announcements to attract new clients, or hidden behind NDAs?
Agreement Considerations
Understand the implications of exclusivity clauses, establish milestone review checkpoints, and ensure transparency around supply chain dependencies. Build control gates that allow term modifications when unexpected variables arise.
Technical Considerations
Assess the innovation's maturity, performance characteristics against incumbent alternatives, and realistic potential to scale. Determine equipment requirements, validation frameworks, and ensure environmental impact data is verified and credible.
Financial Considerations
Clarify who funds R&D, how pricing will evolve, what volume commitments are realistic, and whether financing vehicles are available. Understand the runway to cost neutrality and how premiums will be handled, through unit-level pricing or decoupled innovation budgets of brand partners.
For Brands: Build Partnerships That Actually Scale
Is this innovation partnership going to end up as another pilot that doesn’t make it to production?
Many brand innovation initiatives stall because internal systems aren't ready, not because the technology itself fails. The Brand Innovation Readiness Checklist provides a roadmap for brands and retailers to build partnerships that move beyond capsule collections to meaningful scale:
Alignment of Internal Objectives
Make the business case to secure C-suite buy-in. Break down silos between sustainability, merchandising, and sourcing teams. Build commitment resilience that survives staff turnover. Most importantly, establish a dedicated innovation budget separate from FOB costs or reconfigure pricing architecture to accommodate an upcharge. Expecting suppliers to absorb premiums without compensation is neither sustainable nor equitable.
Innovator Profile
Conduct the same rigorous due diligence on innovation partners as you would on any supplier. Assess their fashion industry knowledge, supply chain integration experience, team expertise, financial runway, and industry engagement. Consult with their backers and affiliated organizations to understand their risk/opportunity profile.
Project Evaluation
Create evaluation frameworks before partnerships begin, considering technological, regulatory, organizational, market, and performance readiness. Look beyond the pilot to assess genuine scalability. Understand ESG impact data requirements and plan for verification. Discuss R&D costs transparently and identify cost-sharing opportunities.
Partnership Considerations
Establish clear governance, assess other brand partners' commitment levels, and standardize expectations across fiber clubs or pooled volume initiatives. Determine whether formal agreements or informal arrangements are appropriate at different stages, and commit to promoting supply chain partners, not just the innovation itself.
Agreement Considerations
Understand when Letters of Intent and offtake agreements are appropriate and their necessary timings. Evaluate exclusivity clause implications fairly. Ensure transparency around supply chain dependencies and build milestone review checkpoints into agreements that allow for necessary course corrections.
Supply Chain Integration
Develop the business case with your suppliers, not just your internal teams. Assess their capacity, capabilities, and genuine interest level. Engage across all tiers and processes at appropriate times. Leverage suppliers with dedicated R&D teams, at least in the early stages, rather than onboarding new partners unnecessarily.
Finance Considerations
Understand full R&D costs, conduct transparent price modeling, build supplier trust through buying commitments, and connect suppliers to financing vehicles when appropriate. Define acceptable margin absorption levels and duration, and be clear about whether premiums will be paid per unit or decoupled through innovation budgets, and if the latter, the duration of this arrangement.
For Innovation Startups: Navigate the Fashion Ecosystem Successfully
Are you struggling to convert brand interest into committed partnerships?
Innovation startups often enter the fashion industry with brilliant technology but limited understanding of supply chain complexity, partnership dynamics, or the financial pressures their potential partners face. The Innovation Startup Readiness Checklist helps you build strategic relationships that help to de-risk all parties:
Alignment of Internal Objectives
Before approaching brands, ensure your solution aligns with their sustainability strategy, fiber portfolio, and margin expectations. Understand each brand's ownership structure, level of commitment to sustainability, staff turnover risks, and whether they're seeking marketing campaigns or long-term embedded partnerships. Verify they have dedicated innovation budgets, not just interest.
Project Evaluation
Communicate clear scalability indicators and conduct transparent volume and pricing forecasts with the supply chain and brand partners. Define available ESG impact metrics and plan for verification at different stages. Develop collaborative pricing models that acknowledge premium creep across supply chain tiers. Create evaluation frameworks that incorporate stakeholder data upfront.
Partnership Considerations
Establish clear governance structures, assess brand partner experience and commitment levels, and standardize expectations across multiple customers. Clarify partnership terms at different stages and outline equitable compensation for supply chain contributions during R&D phases.
Supply Chain Integration
Recognize that success is more likely within existing supply chain ecosystems. Map key industry stakeholders, build a face-to-face engagement strategy, and invest in travel to trade events and supplier facilities to build relationships and technical knowledge. Identify strategic supply chain partners early and understand what equitable exchange looks like from their perspective. Promote suppliers publicly (not just brand partners) to encourage broader industry engagement.
Agreement Considerations
Assess knowledge and experience levels of potential partners regarding Letters of Intent and offtake agreements. Define required information and milestones clearly. Consider exclusivity implications fairly, ensuring time and resource investments by supply chain partners are appropriately valued. Ensure transparency around feedstock and critical supply chain dependencies.
Financial Considerations
Maintain transparency about supplier cost requirements and plug-and-play solution impacts. Clarify R&D cost sharing opportunities and negotiate for partial coverage when appropriate. Conduct collaborative price modeling, share forecasts and dependencies openly, and clarify the runway to cost neutrality. Understand brand and supplier margin expectations, and connect suppliers to financing vehicles through industry memberships.
Use these checklists to build equitable partnerships that scale
These checklists provide a common language and framework for:
Revealing hidden costs before they undo months or years of hard work
Building equitable partnerships where value and risk are distributed fairly
Establishing realistic timelines that account for supply chain complexity
Creating accountability structures that survive staff turnover and organizational change
Enabling difficult conversations early when course corrections are still possible
Download the complete Innovation Readiness Checklists and accompanying report below. Use them internally to prepare your organization, share them with potential partners to establish aligned expectations, and distribute them across your industry network to raise the bar for how innovation partnerships are structured.