True/False: B-t-B Companies Are Slow Adaptors of Open Innovation
As I am about to write a short post on why fast moving consumer goods companies such as P&G and General Mills lead the open innovation revolution, I keep getting back to an interesting question: Are business-to-business (B-t-B) companies slow adaptors of open innovation?
I think this question works well for another True/False discussion that I can kick-off with a couple of remarks.
• B-t-b companies are actually just as good as consumer goods companies on open innovation, but the latter are just more visible when it comes to open innovation initiatives. I have a hard time finding great b-t-b cases on open innovation, but perhaps this is only because the products and brands of consumer goods companies are better known and thus we hear more about these companies.
• B-t-b companies have longer development cycles and thus it takes longer for them to adapt to open innovation.
• B-t-b companies have more engineers working on innovation relative to fast moving consumer goods companies that have a more holistic approach that to a higher degree include other functions such as sales, marketing and supply-chain in their innovation efforts. This could lead to a stronger focus on traditional, internal focus for b-t-b companies.
Personally, I lean towards the view that many b-t-b companies are slow adaptors with an untapped potential on open innovation. They are just beginning to realize this. What do you think?
Most of my experience is with B2B (now several of my B2B clients clients are B2Cs) – and several of them are doing open innovation – some in response to their 2B client and some initiating it with their 2B client. One is in the packaging industry, one is in polymers/plastic molding, one is in advanced materials, etc. But they are all manufacturing based and B2B, one step away from B2C. I think the reason we don’t hear a lot about it is several fold – and #1 & 2 below related to your #1 above:
1. it’s not as exciting and glamorous as B2C stuff
2. B2B’s open innovation tends to be less publicized by the companies themselves (vs. how P&G and General Mills talk openly about what they are doing – and 1 of my clients is doing 5 open innovation projects with General Mills on their G-WIN platform now) and in a paradoxical way tends to be kept more confidential as well – ‘trade secret’ even tho it’s open innovation.
I’m not sure about your last 2 propositions above — just haven’t seen enough to know
I am working on designing an open innovation (OI) experiment for my organization. While thinking about design criteria for selecting a “partner” for the experiment I realized that we may already be involved in open innovation, for instance under the guise of joint business relationships. I am now going to investigate these types of relationships further for existing business cases of OI and if there are no cases identify if they could be a potential source.
Nice question Stefan.
There’s potentially an argument that open innovation is actually more advanced in the B2B sphere, where it’s traditionally been an extension of a close working relationship.
Just because there’s ‘no bells and whistles’ Ideastorm/MyB2Cidea.com portal doesn’t mean there’s no collaboration/exchange between B2B customer and seller. Take engineering services, for example, or even straight manufacturing, and you’d be hard pressed to deliver a valued output without extensive buyer involvement.
Extending the engineering services story further, you could arguably even place pre-developmental public consultations under the open innovation sphere.
Perhaps it’s just that the ‘innovation’ process in some B2B environments has for so long included multiple parties, whereas in the B2C scenario, the ‘C’ has been less personally involved.
Now that’s not to say there’s not PLENTY of opportunity to increase the use of open innovation in the B2B context. Including, but not limited to, via web 2.0 platforms. And in some cases the drivers/benefits may go beyond idea creation to include (equally valuable) client engagement and transparency.
So if the statement is “B2B companies are less visible in their adoption of open innovation”, then I’d give a categorical yes.
And if the statement is “B2B companies could do more to unlock open innovation potential”, I’d again loudly agree.
But to say they’re slower adopters. I’m not so sure.
@Josh, every company can do more to unlock open innovation. And yes, B2B companies seem to be less visible. But if they are not slower adopters, then why is it so hard to find cases on this? I might be wrong, but it would definitely be nice to find the cases to prove it