Let's assume that the MNC's do not hold up to the ethical behaviours we would like to see – and expect – from them. What should smaller companies then do? If the risk of getting out on the other end wiser, but poorer is too high then it seems quite disencouraging to engage in open innovation with MNC's.

Clear "stop" points can help, but what else can smaller companies do?

I think it is opportune to raise these ‘red’ flags in risks and rewards and look forward to your thoughts on the ‘gulf’ between MNC’s and the smaller guy.

Communicating the terms and the rules is absolutely right. I’ll take you to task on your comment of hopefully all grown-ups. So many smaller companies go into a process without clear ‘stop’ points and come out the other side wiser but poorer. Negotiations give the edge to the MNC, deeper resources, broad specialised groups also againest ‘thin’ resources on the other side but often the smaller guy hurts more than you can imagine. I’ve seen it in different circumstances as part of the ‘heavies’.

If we reflect where the supply chain collaborations came into main stream was through good practices. We need some MNC’s to lead on setting these ethical and governance standards so they settle the fears of the smaller company as the basis premise still stands good- they need each other as no one has a monopoly on good, valuable and highly commercial ideas

We need to also look ‘hard’ at the numbers of actual signed up deals. I think the middle man, the open platform providers should provide even more in numbers, size of deals, quality of deals, participant numbers, guidelines for suggested participation so this does truly open up and start flowing as the potential currently indicates it can offer.

I wonder who will take a Open Innovation lead on these steps? Someone should

Great post. I have been working on IO and co-creation for some 7 years now as a consultant and your reflections I fullt share.

On a positive note though, I see that the IP discussion is largely dealt with in our work, through NDAs. We do expert co-creation sessions in many industries, and we have had one person not joining beacuse of that. Companies are willing to share their latest concepts and do the trade-off getting great ideas vs. risk of disclosure.

I am happy to discuss this with you if you want.

Also, I recognize the need for solids results on new and fresh OI initiatives. P&G alone is not enough.

Martijn

With regards to competitions, I believe it is very important for the company to communicate the terms of the competition and make sure every participant know the rules. The company then really needs to live to the expectations set forward. Things should be so clear and straight-forward that no one shoud be left feeling "cheated" or mis-used by others. Unfortunately, I am sure many people have felt so but hopefully they are grown-ups who can make their own decision and get out if they feel mis-used. In cases like this, I really hope the image of a company with bad ethics gets a big rap within the specific community and as such a tarnished brand.

I plan to write a blog post soon on the relationships between smaller companies and MNC's on innovation. I doing some research, but it is in general the MNC's that have the upper hand and there are not really any way to protect the smaller ones from cases as you describe. Again, this goes back to being able to make your own decisions and if a MNC does something wrong hopefully the community and media will pick up on it.

In the ideal world everyone would get along and if needed there would be a referee to keep things fair. This is not an ideal world and I fully understand that the consequences of a tarnished image for an MNC might seem insignificant for a smaller company that feels mis-used. I just do not see any other way of "punishing" abusive MNC's – as long as they do not break the law, of course.

What do you guys think of this?

Stefan

Where I actually remain unclear upon in open innovation is the losers in such a ‘competition? Can you imagine working on a project worth a ‘grant’ of US$ 500k to 1m, be in the last three for final consideration and find out you are not selected. The issue is what protects the intellectual capital, how is the considerable work put into this compensated?

People talk of win-win’s in these, but these are the winners, what happens to the many people that don’t see their idea adopted?

In your experience what mechanisms should be in place so this effort, and it can be significant, end up with a little bit more than nothing?

Appreciate your thoughts on this as the ‘game’ of open innovation is stacked a little towards the bigger company wanting ideas, often well resourced but seemingly at a greater distance from the market .

I can recall one typical example where a small company had a great idea, that seemed to fit with the Multinational. An exciting match.

The resources from the MNC swamped the small company and the small company got deflected from building other interesting concepts. It left relationship difficulties on both sides, let alone a extensive decision process on the MNC side with deep pockets and a small business on the other struggling with all the difficulties associated, expecting the process to be agile. It really highlighted the natural gaps between MNC’s and SME’s.

Clearly you are a champion of open innovation and for good reason but taking some companies or industries into the dinosaur category because they might be struggling from within is perhaps a little harsh. Moving from championing to being a reactionary might be doing the opposite of what you 'see'.
Is it so simple that "they just need to find a definition and a use of open innovation that fit their company…….and you cannot miss out on this"

It is certainly as you say "I believe the main idea behind open innovation – identify and use valuable external resources to make innovation happen – is just too good a value proposition"

Surely stopping and thinking through where open innovation WILL FIT and WHY beyond the current (and growing) users will help bring more into the fold.

Clearly there is considerable struggles going on around this concept and until people like you (and me) can clear the path a little more, to separate the wheat from the chaff, and separate the various theories, hype, different offerings and clarify in a well laid out, logical thinking through process what open innovation can clearly help to resolve their barriers or pain points and we might be guilty of being the old fashion medicine man (http://en.wikipedia.org/wiki/Medicine_man) offering cure-alls and over simplifying.

Stefan