Open Innovation Happens Behind the Scenes
The questions raised in their post are valid enough, but I think Hagel and Seely Brown – whom I respect a lot – are a bit late on this one. The companies that are serious about open innovation are already ahead of the transactional model. They fully understand that what really matters on open innovation happens “behind-the-scenes” rather than through fancy idea-generation or crowdsourcing initiatives.
“Behind-the-scenes” is not about making innovation happen internally. I actually believe that you should be careful with open innovation if you are unable to make your internal innovation engine work. Open innovation is by no means a holy grail that instantly fixes all of your problems.
When I talk with open innovation leaders such as P&G and General Mills, we agree that sites such as PG’s Connect & Develop and General Mills G-WIN are important, but such initiatives are not the most important pieces of the puzzle.
It is far more important that companies have internal platforms in place that can handle the many opportunities that arise when they bridge their internal resources with external partners. This requires the right people, a proper mandate and good processes. This is too often not the case.
Initiatives that we can label as “behind-the-scenes” include teams that are very adept at hand-helding partners as they begin to work with the large company, special events with trusted partners and scouting teams as discussed in this great report: Scouting for Innovation
Actually, one of the biggest issues on open innovation in larger companies is to be able to treat their partners so well that these partners maintain an interest in doing business with them again and thus become long-term partners. This is not always the case today as some large companies believe that the definition of a win-win relationship is that you get to kick the little guy twice.
An idea portal that brings in lots of quick transactions will not make you the preferred partner of choice within your industry. This is nothing more than a ticket to get into the game and the companies that are serious about open innovation know this.



Hi Stefan: As you suggest, the more enlightened larger companies do realize the importance of treating their partners with respect and seeking win/win. There does need to be greater consistency in this area, and this should happen over time, with the right people in place, with the proper reinforcement.
Best regards,
Michael
Hi Stefan,
Great post.
As we figured out when commenting on Seely Brown's and John Hagel's article, we agree on this one: if you don't have internal tools, the outside ideas you get might just bounce off, never get realized.
As far as hypios.com is concerned, we understood that the companies ready to use our tool to broadcast their problems online and get outside solutinos are those that have internal solution and idea management systems in place. And usually they are also the ones that quite naturally start looking outside. And this makes sense because you shouldn't go out buy something before you've made sure you don't have it at home.
Metaphorically speaking, the process as I see it is this:
Put your own house in order (structure your innovation processes), look what you already have (make your internal idea- and solution-management work), clean on your doorstep (prepare the way for outside ideas, conceive IP guidelines, partnership frameworks…), then invite others to join (get outside ideas in).
Hi Klaus,
I would like to ask you for some help in order to ideate a Open Innovation Company. I am the leader and as far as I understood of what you are saying is that I first need to offer idea management tools while I also create collaborative culture inside the organizations with some conferences and seminars. While this is happening I could be engaging a national community prepared to solve the those external problems companies might not find at home. As a starter and as a Open Inno services provider what should be the way to provide a full pack portfolio?
Cheers!
Astute observation as usual Stefan. I experience as you indicate that the best at this do not show up in the business sections.
This is likely due to the fact that the relationships based on trust and competitive advantage often depend on the "quiet approach". A very well woven open innovation initiative is preparing to spring new entries in to the market. Part of the competitive advantage is the closely held plan of a disruptive approach to a market which is either fragmented or has embedded stable market state. If the network approaching the market puts too much information in the public domain, adjustments will occur to pre-empt – either politically or commercially.
The game changing open innovation constellations therefore require open and trustworthy dialogs in which trust is built based not only on clear commercial advantage – but unusually high levels of honesty and openness between the persons involved. You will therefore most often find that behind these quiet partnerships lie "level 5" leaders with high integrity and authenticity.
Some of my best constellations remain in fact "on the shelf" and still viable, awaiting the right timing after the crash. The partners maintain the relationships and meet regularly taking the temperature of the market and the various stakeholders. This requires an unusual level of integrity among the partners. I know that if they plan to reconfigure with a different set of players that I will be the first to know and visa versa.
Hi Christopher,
Great comments to which I fully agree…
Stefan
Thanks for such a good information.
I see the challenges of Open Innovation in development of transactional systems that could act as enablers of OI. Clearly, relationship development is of paramount importance. Without a focus on relationships we will not be talking about Open Innovation in these days. There is an inherent trust in the market that encompasses the opportunity to build relationships to cope with Open Innovation.
On the other hand, this inherent trust in the market is less effective in a dynamic organizational environment where the players, companies, technologies, core competencies, and regulations are constantly changing the way business is done.
Trust development takes time; often more time than the needs to develop and implement innovations.
The most significant steps and progress of innovation happened when the R& D and Entrepreneurship practices where incorporate in the center stage of our economy and organizations (Not behind the scenes). This is what is needed also for Open Innovation to flourish and takes over.
Edgar