Category Archives: Open Innovation

Open Innovation in France

According to data gathered by Bluenove in 2011, major industrial players in France have taken the steps to integrate Open innovation concepts, that are today understood and being applied in all industrial sectors. This is a major evolution in corporate behavior and has had a positive effect on their operating modes (54%). On the other hand, behind the scenes, these same companies are continuing to question themselves on the concrete impact of Open Innovation. 55.7% of these companies do not expect to gain any short term benefit from an Open Innovation strategy and do not expect this to have an impact before a number of years. In this way they are addressing Open Innovation as a long term stake in the deep and sustainable transformation of French industrial culture.

In parallel to this, surprisingly these same companies show confidence in their Open Innovation programs. They know the risks involved in intellectual property rights, the eventual loss of control over innovation processes and the difficulties associated with integration and collaboration. With these risks now identified, measured and accepted, these major industrial players consider that they possess the means and the corporate culture necessary to overcome them and successfully embark on an Open Innovation program.

Today the actions applied by major French companies are primarily focused on the initial stages of open innovation with 41.2% stating that they are still in the very first stages of this strategy. This contrasts with an American study conducted in 2009, where 49% of the major American companies interviewed had already moved into development stages of applying open innovation practices and 40% were actually in the process of optimizing it. Whereas in France, only 21.9% of equivalent firms claim to be in this process of optimization.

The report can be read here.

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PwC Innovation Survey in Global CEO Report

Excellent survey of global CEOs by PwC. Not only does the survey focus on emerging markets, but it contains a significant section on the importance that CEOs attribute to innovation as a key driver of their growth strategy.

The 1,201 chief executives in 69 countries polled were nearly as confident in their outlook for revenue growth over the coming 12 months as in the boom years before the global financial crisis

Innovation is very high on the agenda for CEOs globally. 78% expect that their development efforts to generate significant new revenue opportunities over the next three years. The report shows that CEOs are “putting the customer first”, reinforcing the view that the best ideas come from customers, partners and suppliers. Further, CEOs are really trying to co-create products and services with their customers.

The full report can be found here and is available for download.

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Thoughts on Innovation Acceleration

I recently shot a short video on innovation acceleration as a thought leadership piece.
I wanted to share this with you.

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What Conventional Wisdom about Innovation No Longer Applies?

Interesting article in the latest MITSloan Management Review. It addresses the question:

What conventional wisdom about innovation no longer applies?

It comes up with 5 Takeaways:

  1. Most innovation efforts fail not because of a lack of bright ideas, but because of a lack of careful and thoughtful follow-up. Smart companies know where the weakest links in their entire innovation value chain are, and they invest time in correcting those weaknesses rather than further reinforcing their strengths
  2. Online forums are not a panacea for distributed innovation. Online forums are good for capturing and filtering large numbers of existing ideas; in-person forums are good for generating and building on new ideas. Smart companies are selective in their use of online forums for innovation
  3. External innovation forums have access to a broad range of expertise that makes them effective for solving narrow technological problems; internal innovation forums have less breadth but more understanding of context. Smart companies use their external and internal experts for very different types of problems
  4. Rewarding people for their innovation efforts misses the point. The process of innovating – of taking the initiative to come up with new solutions – is its own reward. Smart companies emphasize the social and personal drivers of discretionary effort, rather than the material drivers
  5. Bottom up innovation efforts benefit from high-levels of employee engagement; top down innovation efforts benefit from direct alignment with the company’s goals. Smart companies use both approaches, and are adept at helping bottom-up innovation projects get the sponsorship they need to survive.

You can read the entire article here.

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P&G expands Connect & Develop – very significant

P&G has always been my “pin up” company, as it has pioneered ideation not only internally, but with customers and suppliers in a way that has been transformational for the company. It is therefore especially interesting for me to learn that Procter & Gamble is stepping up efforts to find new ideas – wherever they might originate. The wave of Open Innovation continues to build, but some skeptics feel that it is a bubble. Well, not for P&G.

P&G wants to triple the revenue it earns from working with outside sources, including competitors, universities and entrepreneurs. In five years, P&G wants to earn $3 billion in sales from its partnerships with outside companies and researchers, tripling the impact of a program that began in 2000 to find and adapt new ideas from small firms, inventors and others.

“Connect and Develop has created a culture of open innovation that has already generated sustainable growth, but we know we can do more,” chairman and CEO Bob McDonald said. “We want the best minds in the world to work with us to create big ideas.”

In a company that once took years, even decades, to bring new products to market relying on in-house research, the program has helped P&G quickly get new products on store shelves.

Examples of products found through Connect and Develop include Mr. Clean Magic Eraser, which came from technology licensed from German chemical company BASF, and Swiffer Dusters, adapted from a Japanese competitor called Unicharm Corp. P&G negotiated the rights to sell the product outside of Japan.

P&G will continue to look for similar opportunities, but will also step up its work with small- and mid-sized entrepreneurial companies, said Bruce Brown, P&G’s chief technology officer. The company plans to increase its work with universities, research institutions and government laboratories around the world, including “innovation hotspots” like California’s Silicon Valley, Boston, Israel and China, Brown said.

P&G employs dozens of international technology entrepreneurs whose job it is to find new products and technologies. The company already employs a small office in Silicon Valley and has employees working inside venture capital firms researching new businesses that P&G could invest in or even purchase outright.

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Open Innovation Assessment tool from NineSigma

NineSigma has announced the launch of their new online OI Scorecard for innovation and business leaders to quickly assess open innovation capabilities. The web-based tool provides an initial evaluation of a company’s ability to collaborate as part of their innovation process, both with internal and external partners. The tool also assesses the organizational structure and systems that are needed to effectively support collaborative innovation.

“Understanding where you are in your open innovation efforts is a critical first step to charting a path forward,” said Matthew Heim, president of NineSigma. “Companies at varying levels of open innovation maturity come to us looking for better results from their open innovation investments. We help them build on their strengths while addressing their needs for improvement. Using key indicators, the scorecard is a quick way to get a snapshot of a company’s capabilities. In addition to an OI “score”, the tool provides recommendations for how to address the gaps identified.”

Specifically, the open innovation tool measures a company’s ability to collaborate on innovation in three tiers: within and across the company, with the company’s existing external network, and with the global innovation community. Capabilities are evaluated on two axes that measure the extent to which the company engages with innovation partners and how well enabled they are to assimilate resulting knowledge and solutions into their organization.

The 3 tiers of collaborative innovation
three tiers

Business and innovation leaders interested in assessing their company’s open innovation capabilities can access the NineSigma OI Scorecard tool at http://www.ninesigma.com/OIscorecard.aspx. The web-based survey takes approximately 5-7 minutes to complete.

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Employees have the best ideas

The classic IBM CEO study of 2006 says it all – the best ideas come from employees, customers and partners. A recent article in the Wall Street Journal reinforces this hypothesis.

To quote
Most great ideas for enhancing corporate growth and profits aren’t discovered in the lab late at night, or in the isolation of the executive suite. They come from the people who daily fight the company’s battles, who serve the customers, explore new markets and fend off the competition.

In other words, the employees.

It goes on to list seven characteristics that are essential to the success of Innovation communities:

CREATE THE SPACE TO INNOVATE. Line managers and employees occupied with operational issues normally don’t have the time to sit around and discuss ideas that lead to cross-organizational innovation. Innovation communities create a space in which employees from across the organization can exchange ideas.

GET A BROAD VARIETY OF VIEWPOINTS. It’s essential to involve people from different functions, locations and ranks, not only for their unique perspectives, but also to ensure buy-in throughout the company afterward. Innovation communities focus on creating enthusiasm as well as new products.

CREATE A CONVERSATION BETWEEN SENIOR MANAGEMENT AND PARTICIPANTS. By definition, innovation communities can’t work in isolation: To create sustainable cross-organizational innovation, it’s important that ideas flow to senior managers. If they don’t, innovations will tend to have limited, local effects that don’t benefit the organization as a whole.

PARTICIPANTS SHOULD BE PULLED TO JOIN, NOT PUSHED. Members need to be enthusiastic about participating. Employees can’t be forced to reveal their thoughts or be imaginative.

TAPPING UNUSED TALENT AND ENERGY KEEPS PRODUCT-DEVELOPMENT COSTS LOW. One reason these forums are economical is because they tap into unused energy. An innovation community sends a message that senior management is listening and that employees will benefit from participating. In many cases, potential contributors are just waiting to be asked.

COLLATERAL BENEFITS CAN BE AS IMPORTANT AS THE INNOVATIONS THEMSELVES. Innovation communities promote learning on both a personal and organizational level by bringing people together to exchange ideas. The repeated discussions and problem-solving missions can give rise to valuable social networks that lead to further exchanges of ideas in the future.

MEASUREMENT IS KEY. Innovation communities are sustainable only if they can produce demonstrable value. Otherwise senior management loses interest.

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