The Next Practices of Open Innovation
It feels as if we have just begun looking into the potential of open innovation and as stated in my recent BusinessWeek article most companies are still learning on this.
So I was a bit puzzled when I recently was asked by a corporate innovation leader on how we could work together on an upcoming event that should focus on the next practices of open innovation.
Hey, should we not learn to walk before we start running marathons? That was my initial thought. On the other hand I was intrigued that some companies are ready to look into the next phases of open innovation.
This kind of thinking forces us to continually move forward and set the bar even higher. On the other hand, it also means that companies that do not yet get open innovation will fall even further behind. Tough luck – they better start catching up…
What do this particular progressive company – and others that seem to get open innovation and have hinted that they are ready to move forward to the next practices as well – have in common?
It is not much of a surprise that experience is a key word. These companies have been working with open innovation for at least a couple of years. This has given them a sense of direction and they are now implementing more systemic and structured approaches. This is definitely needed to fulfil the potential of open innovation.
These companies also recognize that they have made mistakes in their early approaches and they have begun correcting these. I take this as a strong sign of maturity. A key reason for being able to do this is that they have reached an internal tipping point with regards to dealing with their corporate antibodies towards open innovation.
Now, they have more backers than blockers on their initiatives and as a result they can speak more openly about their successes as well as their failures. This is not the case with less mature open innovation initiatives where admitting to failures early in a process can kill the entire initiative.
What are the next practices of open innovation? Maybe it is not that different or new. Maybe we “just” need to become even better at identifying and developing the proper structures and approaches on both the internal and external level. It is very much about continuing to learn and being adaptive to the lessons we get.
We should also start envisioning an end-goal for open innovation. Personally, I think we have succeeded with the implementation of open innovation when we no longer put “open” in front of innovation and no longer pay attention whether the key source for a particular innovation was internal or external. It was just innovation.
Many companies can benefit from having such an end-goal in mind when they start out with their open innovation initiatives.
I plan to do a couple of Next Practices of Open Innovation sessions in the spring. As I prepare for this, it would be great to hear your take on what more mature companies do differently on open innovation and what you believe the next practices of open innovation will look like.
Now, they have more backers than blockers on their initiatives and as a result they can speak more openly about their successes as well as their failures. This is not the case with less mature open innovation initiatives where admitting to failures early in a process can kill the entire initiative.
i think this sums it up perfectly between running and walking, those that are ready to run.
thus i think the next level is taking bolder moves, where before you risked the risk of naysayers, now those that are backers are open minded enough, secure in the understanding of failure that means bolder moves, faster paces, and more chances..
on the other hand those that want to run before they’ve understood that it’s not the case of you being ready but those (the influencers) if they are ready. to run with you, if not, start by making them walk faster.
Hi Stefan,
It is always tough to envision an end-goal when it comes to organizational structure and design. I agree with you, that the most innovative companies have com a long way in adapting an Open innovation mindset, but I still think that they have a long way to go and as the proceed down the innovation path, they will encounter yet unforeseen challenges.
One of these challenges is how to gear the entire organization towards an open mindset. There is a lot of value in the complete open organization, where every employee is innovating through the interaction with their peers.
To reach this goal, companies have to educate their current employees and create a new organizational design, that can foster this dialog. This open mindset will be difficult for especially older employees and peers to fully participate in, which can be a barrier for innovation within certain fields.
I’m thereby saying, that the mature companies are those who can make openness part of the organizational and employee DNA. Not just the R&D department, but every single employee. Reaching this, is for me the end-goal as the organization hereby reaches a point where the lines between internal and external are non-existing.
I’m typing as I think, but perhaps there’s an evolution to be had in open innovation along the lines of… (crudely)…
1. An initial focus on ‘opening up’ the ideation process (e.g. external ideas competitions, ideas portals etc)
2. A subsequent focus on ‘opening up’ the idea development and incubation process (e.g. working more closely with suppliers/partners to take innovations to market)
3. A evolution to focus on ‘external opportunity sourcing’ (i.e. using open innovation processes to identify external opportunities for direct acquisition – essentially external corporate venturing)
4. Related to 2 and 3 (and potentially something we’ll see more of in the future…), an evolution to a focus on innovative business models/partnerships that allow rapid co-sourcing/development of opportunities (e.g. building on the app-store models employed in ICT, but applied to service industries)
Just some rough food for thought
Another provocative post, Stefan:
I tend to share your view that what’s Next may not be so different than what’s Now, and that possibly the focus should be on how to do it better, faster, and more efficiently. The reference point for this is going to differ by company.
My sense is that there’s still a great deal of opportunity to define and refine what I will refer to as “partnering processes” (i.e. the joining up and constructive collaboration involving prospective partners). This is especially necessary with companies that are not similarly culturally evolved in terms of external innovation, who have different experience level in external innovation.
I think Michael’s point of define and refine’ is the next step. This can be a very significant shaping step actually if you reflect on it.
I view this more as Business Relationship Management where you work on accelerating the interactions, placing increasing emphasis on valued networks and connections, pushing out increasingly more difficult challenges, finding new ways to leverage the knowledge ‘residing’ in the different points of expertise.
Also switching from framing (tighter) research challenges into opening these up really up to broader exploration from outside, redesigning capturing and exchanging processes that are not so legacy bound as today, achieving more overarching legal protocols to allow for deeper knowledge exchange and more board to board engagement and cross investment as you delve deeper into each others thinking and expertise.
These will need this greater level of relationship management, more at a strategic level for fostering the trust and commitments each side need to make to it and investing in resourcing. Also one final thought there will be increasing parallels with the evolution of IT for getting concepts ready in faster, more flexible ways. The big companies will try and in-house this, whereas we will see emerge a clear leader for the ones unable to pull together the processes and structures for this. Similar to what Salesforce. com has tried to do.
Yes, as we move up the maturity ladder open innovation will have a growing complexity and understanding and those inquiring minds asking what is the next set of practices, it should come as a positive signal of intent
Paul is right on target stressing the importance of relationships in the early innovation development.
I would like to add that those relationships must be among people who possess creative talent, deep insights into the evolution of the marketplace, as well as experts in technology. Connecting the best people creates few high quality ideas that are easy to spot. The authority of the “gurus” reassures the management in deploying necessary resources for development and commercialization.
When you open the ideation process to “crowds”, the outcome is a flood of mediocre and poor ideas that obscure few brilliant ones. Finding brilliant ideas in the noise becomes a big problem. It requires a lot of time of “gurus”, as non-guru is not able to recognize a brilliant idea.
Gurus are expensive and evaluation job is given to a mediocre manager, who selects ideas that fit t existing paradigm, existing business model, and existing corporate metrics. The upper management is not committal as the concepts are not coming from a recognized authority. That completes the the open innovation process.
Would it be easier to avoid the involvement of crowds and work with external artistic talent and recognized technology experts? Apparently, that’s how they do it in Italy.
Loved the Business Week article and the examples. Being vague, as highlighted on page two of the BW article, is one problem. Another, often experienced or a mistake made my smaller companies, is giving too much detail. (Getting too technical).
Paul and Sergei make some great points; it is all about relationships really.
In our field of software (Niche of opening up proprietary DTP files formats and freeing the content, in effect.), open innovation is growing rapidly. What started as outsourcing, is now really more focused on getting what you need from other professionals already experts in the niche or field you are looking on entering.
A great example is where a small company, The Icon Factory, teamed up with another existing software developer, ARTIS Software to offer a joint application for graphic designers, xScope.
Another popular trend and avenue for technology companies is to partner with existing customers on new projects and thus encourage Open Innovation through that already trusted channel (Back to relationships again). Here is a big recent example of that:
Adobe and Publisher Condé Nast working on Digital Magazine Application-
http://www.markzware.com/blogs/adobe-publisher-conde-nast-digital-magazine-application/2009/11/24/