Let’s consider a growing startup or a small company that is on its way to become a mid-sized enterprise. The early phases are very much about executing on single, great product, idea or technology. However, as the company grows focus tends to shift towards control rather than keeping the visionary thinking and bold approaches that build the company. This must be re-ignited. Open innovation can be the vehicle for accomplishing this objective.

Because of the high level of risk-taking involved with young ventures, leaders of entrepreneurial enterprises often have healthy or even outsized egos; it takes a certain amount of hubris to believe you can defeat the high odds against the success of a new venture. This can lead you to believe that you and your people have the best ideas. But in reality, there is a strong possibility that the best people and the best ideas are to be found outside your organization.

One key reason for Procter & Gamble to initiate open innovation programs was that they learned that for each of their 7,500 R&D people there were 200 people outside the company with equal skills and competences. An ignorant – and arrogant – company would ignore these 1.5 million people, arguing they do not matter as they do not work for us. P&G did not ignore this. They understood they should connect their own organization with the best and brightest from the outside world. Given the limited size of smaller companies, this mindset becomes even more important.

As I wrote earlier, SMEs often start with one great product or service idea and as they grow they might fail to recognize that innovation is about more than just bringing the core product or service to market. Innovation can occur at all stages of the business process, from the business model itself through to the customer experience. By broadening their thinking about what actually constitutes innovation, SMEs can more easily see the wisdom of open innovation, which can help them innovate in areas where they may not have internal expertise.

I will post more thoughts on open innovation for SME’s this week. Let me know if you have any comments on this or if you know of smaller companies that have adapted open innovation. It would be interesting to get to know more about their processes, failures and successes in order to get a better understanding of how this is different from large companies. Since small and large companies meet on open innovation, they need to start learning more about each other on this.

One of Scott Berkun’s comments went like this “If we dropped the i-word, or at least attempted to define it, I think we’d get to the core of all this much faster.” This comment builds further on an interesting article, Good Beats Innovative Nearly Every Time, in which Scott urges us to loose usage of the word innovation.

I appreciate Scott’s comments as well as I enjoyed reading his article. However, as I believe innovation will become even more important for companies, I think we are stuck with the word and we can just as well get used to it. It will not go away.

The big question is how companies will define innovation to their situation. It does not really matter how academics, consultants or others define it; each company need to define this in a way that makes sense for their company, their employees and their partners. Then, they can start developing a common language on innovation that can help them build a strong innovation culture.

In another discussion related to my article, Ralph Kerle stated that innovation is an outcome. I have to disagree as I believe innovation is a process; not an outcome. The outcome is what you get out of an innovation process in which creativity plays a big role.

You can plan this process just as you can plan other management and business processes/disciplines such as sales, logistics and finance. You can also train people to become better innovators especially when you understand that innovation works best with a holistic approach. It needs to be about more than just products and technologies.

Innovation is beginning to look more like science than art, as we in many cases are now capable of taking previous patterns and experiences and use this to predict outcomes based on the input and processes we use. This maturity is one key reason why innovation is becoming even more important – and complex.

Both Scott Berkun and Ralph Kerle argue that we should forget about the term innovation. My response is that innovation is no longer a buzz word. It is here to stay and we can argue on definitions – which I always try to avoid, as I believe each company must find their own definition. But we can’t just pretend the term does not exist or should be replaced by another one. Those days are long gone.

Let me know what you think.

April 2, Corporate Mind Exchange, Beijing – I organize and facilitate a one-day session with open innovation leaders from General Mills, P&G, Shell, Qualcomm and other companies.

April 8, Open for Business, London – I participate in or moderate a panel on open innovation.

April 19, Corporate Mind Exchange, Las Vegas – I organize and facilitate a 24-hour session with open innovation leaders from General Mills, P&G, Shell, Qualcomm and other companies.

May 3, Front End of Innovation, Boston – I am moderating a panel with Jeff Bellairs, General Mills and Chris Thoen, P&G.

May 4, IBM Impact, Las Vegas – I will be giving two separate talks on the topics of open innovation and intrapreneurship.

August 11-13, Open Innovation Summit, Chicago – I will be giving a talk and/or hold a session on open innovation.

It is such a new concept that there are not lot of examples available to illustrate it, but here are some key components of a good networking culture:

• Top executives and innovation leaders have outlined clear strategic reasons why employees need to develop and nurture internal and external relationships. This includes making clear how your company’s networking culture links with and supports your innovation strategy (which, of course, is an outgrowth of your overall corporate strategy.)
• Among the things to consider when developing your networking culture strategy is what types of networks you hope to build to support your innovation efforts. If your organization is moving toward open innovation, possibilities would include peer-to-peer networks for people working with open innovation in different companies, value – and supply – chain networks, feeder networks, and events and forums connecting problem solvers and innovators with your company.
• Leaders show a genuine and highly visible commitment to networking. Leaders must walk the walk, not just talk the talk. By making themselves available at networking events and by being visible users of virtual networking tools, they model the desired behavior and motivate others to participate. After all, who doesn’t want a chance to exchange ideas with the top brass?
• Leaders should also share examples of their networking experiences whenever possible. Spread the word about your own and others’ networking successes. Hearing leaders talk repeatedly about how networking is helping the organization in its innovation efforts will reinforce the message that this is important.
• Networking initiatives mesh closely with your corporate culture. This is not one-size-fits-all; each company’s networking efforts will differ. You can take bits and pieces, concepts and theories, knowledge and experience from others, but you still need to make it work for your own company.
• People are given time and means to network. Frequent opportunities are provided to help individuals polish their personal networking skills. Not everyone is a natural networker. But almost everyone can become good at it with proper training and encouragement.
• Both virtual and face-to-face networking are encouraged and supported. Web 2.0 tools and facilitated networking events maximize the opportunities people have to initiative and build strong relationships.

Let me know what you think and please feel free to add more components.

• Align With Executives. You need to have a better alignment between the innovation strategy and the overall corporate strategy. One way to do this is to make an extra effort of understanding what matters most for the executives right now and deliver on this.
• See What Comes Next. Once you deliver what the executives would like to see right now, you still have to be able to see what comes next and make sure that your company moves in that direction . The small wins gained by aligning with the executives hopefully make them more attentive to your suggestions on how to develop strategies on what comes next.
• Go External, Get Connected. As we move towards open innovation, you need to build better personal as well as corporate networks. Look at the external sources you need to connect with in order to develop the offerings of your company and expand your own career opportunities.
• Become A Digerati. As you work to develop more external ties, you need to gain a better understanding of social tools such as LinkedIn, Twitter and perhaps even Facebook. Facebook has a more private focus but there are industries where you need to understand how Facebook works in order to innovate better. Use these tools to gather and distribute information and knowledge and to build your personal brand if you have set a strategy for this.
• Build Your T-Shape. In short, the T-shape is about having depth as well as breadth. You need to understand how other business functions work and why they are important to the innovation process. One way to do this is to convince your executives that job rotation programs are great vehicles for building a better overall understanding of your company and its offerings.
• Get Noticed. In times like this, you need to make sure you get the proper credit for the work you do. I am not saying that you should just focus on your personal brand and disregard the work of colleagues. Find the right balance remembering that no one likes shameless self-promotion.
• Adjust Your Drive. Working with innovation you most likely have a faster drive and pace of change than that of your colleagues. You need to be careful about launching too many initiatives and pushing too hard as you need to get the support from others to get results. From time to time, you need to stop, look around and ask yourself if you have enough key stakeholders backing your projects.
• Are You A Future Executive? A majority of the innovation leaders I work with aspire to climb the corporate ladder and even become executives. In this case, you not only need to understand other business functions; you need to work in other functions such as sales in order to get the management experience needed to advance to higher positions. One reason is that innovation is carried out in smaller units not giving you the experience of working in – or leading – a larger department.
• I have only heard of a few cases in which innovation leaders advanced directly to executive positions; you need to build further on your resume and especially with sales responsibilities. Perhaps this is the time to develop new skills and competences by taking on new challenges?

Just some thoughts… I look forward to hearing your comments.

Corporate websites – examples of open innovation and crowdsourcing-like initiatives:

• 3M Zukunft Innovation (in German)
• BMW Virtual Innovation Agency
• Campbell’s Ideas for Innovation
• Cisco I-Prize
• Clorox Connects
• Colgate-Palmolive
• Dell IdeaStorm
• DSM Licensing
• Ericsson
• General Mills G-WIN
• GlaxoSmithKline
• Hershey´s Ideaworks
• HP Labs Open Innovation Office
• IBM Collaboration Jam
• Huawei
• Intuit Collaboratory
• Intuit Labs
• Johnson Controls Open Innovation
• Kraft – InnovateWithKraft
• LG
• Medtronic
• Nestlé
• Netflix Prize
• Nokia
• Nokia Beta Labs
• P&G Connect+Develop
• Pepsi Refresh Project
• Philips
• SAP
• SAP – Sapiens (In German)
• Sara Lee
• Shell GameChanger
• Siemens
• Starbucks – MyStarbucksIdea
• Unilever
• Weyerhaeuser

Open innovation / crowdsourcing intermediaries and platforms:

• Big Idea Group
• Chaordix
• EdisonNation
• Exnovate
• Hypios
• Ideas4All
• IdeaConnection
• IdeaWicket
• InnoCentive
• InnoGet
• MillionBrains
• NineSigma
• Pharmalicensing
• TekScout
• Topcoder
• Yet2.com
• Your Encore

Open innovation / crowdsourcing software:

• BrightIdea
• Fellowforce
• Imaginatik
• Inno 360
• InventionMachine
• Spigit

Annual open innovation conferences:

• CoDev – Co-Development and Open Innovation
• Open Innovation Conference by Marcus Evans
• Open Innovation Summit