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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The increasing importance of Innovation

Interesting article in the New York Times: “Innovate, Yes, But Make it Practical”
http://www.nytimes.com/2010/08/15/business/15unboxed.html?_r=1&ref=business

Key messages include:

  • LinkedIn found that more than 700 people listed their current job title as “chief innovation officer” and that nearly 25,000 had the word “innovation” in their job title
  • Innovation Managers are now senior executives in major corporations. Indeed, many smart companies now have VP-level Open Innovation Managers
  • These senior leaders need unfettered access to all parts of the organisation to be effective
  • Internal venture funds are essential for successful execution of Innovation activities
  • Innovation is certainly possible in the services industries e.g. Banking and finance
  • Customer-centricity is paramount
  • Incubating ideas that deliver scale is powerful

Thoughts:

  • Does your organisation need a VP for Innovation?
  • Indeed, should you have a VP for Open Innovation?
  • How are you breaking down barriers to allow “unfettered access”?
  • Do you have sufficient focus on customer-centricity?
  • Have you set aside sufficient funds for “internal ventures”?

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Pixar Embraces Collaboration to Power Innovation

Who amongst us does not love the work of Pixar? Very few I am sure. Pixar has succeeded as well as anyone in mastering the art of creativity. The company has produced one animated hit after another—including “Finding Nemo”, “Cars” and “The Incredibles”. Rather than being crushed by Disney, as many feared, Pixar has reinvigorated its parent company.

What is most interesting is how Pixar has embraced collaboration within the organisation, with a view, strongly supported by myself, that collaboration powers innovation. In his article in The Economist (June 17th, 2010), Schumpeter says the company devotes a lot of effort to getting people to work together. In most companies, people collaborate on specific projects, but pay little attention to what’s going on elsewhere in the business. Pixar, however, tries to foster a sense of collective responsibility among its 1,200 staff. Employees show unfinished work to one another in daily meetings, so get used to giving and receiving constructive criticism. And a small “brain trust” of top executives reviews films in the works.

Schumpeter continues that Pixar got the inspiration for this system from a surprising place—Toyota and its method of “lean production”. For decades Toyota has solicited constant feedback from workers on its production lines to prevent flaws. Pixar wants to do the same with producing cartoon characters. This system of constant feedback is designed to bring problems to the surface before they mutate into crises, and to provide creative teams with a source of inspiration. Directors are not obliged to act on the feedback they receive from others, but when they do the results can be impressive. Peer review certainly lifted “Up”, a magical Pixar movie that became the studio’s highest-grossing picture at the box office after “Finding Nemo”. It helped produce the quirky storyline of an old man and a boy who fly to South America in a house supported by a bunch of balloons.

Breaking down the barriers is key to successful innovation in any organisation. Pixar certainly sets an excellent example for others to follow.

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Siemens and Open Innovation

P&G have long been held up as a flagship corporation when it comes to Open Innovation. After reading the Pictures of the Future document from Siemens, I really feel I can put Siemens up there with P&G. The message from Siemens is clearly that Open Innovation is vitally important to their future. The document highlights many of the projects that Siemens is undertaking around the globe that have Open Innovation at their core. It is exceptionally impressive. Siemens have taken the concept of Open Innovation and are truly making it a reality.

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Excellent series of podcasts on Open Innovation

There are an excellent series of podcasts produced on EnterpriseLeadership.org. I am bringing links to these here.

Dr. Joel West, Academician and Author, Talks about the Open Innovation Paradigm for Technology Development In this podcast, Dr. West explores what powers the concept of open innovation and how it differs from traditional innovation efforts, such as research and development.

Tom DeGarmo, a principal at PricewaterhouseCoopers, Makes a Case for Open Innovation in Economic Downturn DeGarmo provides insight from his research experience with open innovation, gives examples of open innovation communities, and gives CIOs and CTOs several takeways for using technology to carry out open innovation initiatives.

Steve Shapiro, InnoCentive’s vice president of Strategic Consulting, Talks about Using Open Innovation to Solve Tough Problems Shapiro explains the reasons for using open innovation to solve tough problems, InnoCentive’s business model for generating revenue, some of InnoCentive’s most successful challenges, the benefits of using InnoCentive, and the challenges the company faces in this economy.

How CIOs Can Reshape Their Company’s Business Model: C.K. Prahalad, Best-selling Author and Academic Prahalad provides specific examples of how senior IT executives can address new business opportunities for their companies, how new technology initiatives can drive business opportunities at the bottom of the pyramid, why companies should embrace the concept of open innovation, and what the CIO role will be like 10 years from now.

Dr. David Tennenhouse, partner at New Venture Partners, Talks about Different Approaches to Open Innovation In this podcast, Tennenhouse talks about the need for companies to turn to open innovation, the way open collaboration enhanced open innovation at Intel and other organizations, the emergence of innovation that venture capital firms are seeing, and the takeaways CIOs need to be aware of if they want to promote innovation and open innovation.

Former Air Products Research Executive Talks about Establishing Successful Corporate Innovation Programs Why are some major companies good at driving corporate innovation in technology? For some answers, Enterpriseleadership.org turned to Dr. Ron Pierantozzi, who built his entire career on driving corporate innovation in a technology-related company and doing research in this area.

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Collaborative Innovation in the packaging industry

Open Innovation can be be found everywhere.

DuPont has announced the winners in the 22nd DuPont Awards for Packaging Innovation, including the first fully compostable snack bag from Frito Lay and new PET bottles from Coca Cola that incorporate plant-based renewable polymer.

“These winners demonstrate that collaborative innovation has no boundaries. It crosses disciplines, markets and geographies,” said William J. Harvey, president — DuPont Packaging & Industrial Polymers. “The collective ingenuity of these business partnerships has yielded innovative new solutions that address pressing consumer needs.”

DuPont sponsors this long-running awards program to recognize innovation, provide learnings to the industry and highlight the importance of collaboration among value chain participants.

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Open Innovation and TSMC

Do you know who TSMC is? I had the great pleasure about two years ago of visiting TSMC and speaking to some of their management. TSMC is the world’s largest dedicated semiconductor foundry. Its corporate headquarters are in Hsinchu, Taiwan.

Today, TSMC announced that it is extending its already hugely successful Open Innovation platform. TSMC originally launched the Open Innovation Platform in 2008 as an industry-wide design enablement initiative. To date, the Open Innovation platform has accelerated time-to-market, improved return on design investment and reduced design infrastructure duplication. It includes a set of interoperable ecosystem interfaces, collaborative components and design flows that efficiently empower innovation throughout the supply chain thereby enabling creation and sharing of newly-created revenue and profitability.

The Open Innovation Platform’s Alliance programs collaborate with EDA, IP, software IP, systems software and design services partners. The objectives are to deliver accelerated system-level design, reduced system design cost, a faster system-to-IC implementation design cycle, and faster time-to-market.

“The design ecosystem must move beyond its current bounds and embrace the systems- level challenges that are at the heart of every design consideration. The Open Innovation Platform began setting the standard for ecosystem collaboration two years ago. TSMC continues to answer the market’s call and will build that same collaborative spirit on a system-level basis,” explained S.T. Juang, senior director, Design Infrastructure Marketing at TSMC.

The Open Innovation Platform’s global Ecosystem Alliance programs have grown to include 30 EDA partners, 38 IP partners, 23 Design Center Alliance (DCA) partners, and 9 Value Chain Aggregator (VCA) partners. All partners participate in one or more of the Open Innovation Platform collaboration programs. TSMC also begins to work collaboratively with industry organizations, such as IPL Alliance and Si2, to promote the interoperability standards based on TSMC interoperable EDA formats.

“TSMC’s Open Innovation Platform delivers comprehensive and innovative design technology services that remove advanced technology adoption barriers. It helps lower design costs and improves time-to-market,” said Dr Fu-Chieh Hsu, Vice President of Design Technology Platform and Deputy Head of Research & Development. “The Open Innovation Platform will now begin addressing system-level design’s cost and complexity and enable packaging of entire electronic systems onto multi-chip packages.”

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Accelerating Innovation through Effective Supplier Collaboration

Exceptionally interesting document on the value of collaboration between an organization and its suppliers, resulting in co-creation. This surely has to be the way of the future. Nothing gets me more stressed than when I hear the word “vendor”. Its is a word that should be banned from our vocabulary. It certainly puts up the barriers, which is totally counter to Open Innovation thinking.

This document finds that accelerating innovation through effective supplier collaboration requires both an overall company wide innovation strategy and an integrated supply innovation strategy. An open innovation strategy requires executive leadership and culture change. This innovation strategy needs to be communicated internally/externally. Management must commit resources and processes (e.g. innovation portal and third party providers) to support the
strategy. Further, the innovation strategy must be linked to overall firm performance and assessed by objective metrics. Definition of innovation and establishment of innovation metrics requires a cross-functional consensus and alignment from top to bottom of the organization.

The innovation metrics with weightings based on innovation needs should be linked to company and supplier performance evaluation. Both hard and soft metrics need to be developed. Risk management strategies enhance the speed and likelihood of successful commercialization of new products. Risk must be defined as a combination of uncertain events and outcomes for both buyer and supplier during any new product development stage gate process. The companies should establish alternative plans if required innovation does not pass the stage gate risk/reward evaluation.

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The Daimler Smart Car – an Open Innovation Success Story

Daimler’s “Style Your Smart” open innovation contest yielded 50,000 ideas in a six week period as 8,000 participants from more than 100 countries used their creativity to help the car manufacturer innovate.

“Style Your Smart” was open for around six weeks and participants were invited to use the company’s online toolkit to create, or they could submit their own designs. The take up was phenomenal. Within 10 days of launch 10,000 unique ideas had been submitted.

During the competition contestants exchanged opinions and evaluated each other’s ideas which resulted in more than 600,000 online ratings.

Cash Prizes

The submissions were adjudicated by an expert panel of judges who based their verdict on these ratings. The overall winner with the most creative design was Tamir Shefer from Jaffa, Israel who received prize money totaling €1,500 (approx USD $2,000). Some participants were also awarded cash prizes for being the most active on the website and three other designs picked up prize money.

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Xerox establishes Open Innovation R&D Hub in India

It is interesting to see the real spread of Open Innovation across the globe. The notion of co-creation has to be the way forward, especially as organizations such as Xerox address new markets with new solutions. The old models just will not work in these environments.

Xerox has announced it will open an R&D hub in India with a very Open Innovation flavour.

Here is a quote from an article in the Economic Times:

….We are not looking to hire lots of researchers but will collaborate with local universities, start-up companies, governments and businesses. It will be based on open innovation rather than closed innovation (or, entirely in-house). In an open innovation model you co-create and co-innovate with partners in industry, universities and government.

…..The Chennai innovation hub will be a centre of connectors. For every person we hire, we will partner at least 50 or more people.

Every person will be working on at least five projects and with each project, there will be at least 10 people and hence, it has a big magnifying effect. There will be a large number of innovators working. It will eventually be larger than the European center of Xerox.

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Breaking down the Silos – Open Innovation

There have recently been two excellent, short articles in BusinessWeek about how we need to “break down the barriers” internally and externally within, and between, organisations. The first is from Saul Kaplan, and he gives some excellent examples from both the private and public sector. Read here.. The second article is entitled “Smashing Silos” by Evan Rosen. Read it here.

It all comes back to the paradigm that connectedness and sharing, in itself, will accelerate innovation. I have been a proponent of this for a long time, but it takes articles such as these to reinforce the concept. Why is it that is it necessary for something to be repeated 100 times before it sinks in?

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Is Mush actually mush – or is he right?

Have you seen Jaron Lanier’s article in the Wall Street Journal on January 8th? What do you think of his viewpoint? Do you agree? I have underlined the most controversial bit…….

Here’s one problem with digital collectivism: We shouldn’t want the whole world to take on the quality of having been designed by a committee. When you have everyone collaborate on everything, you generate a dull, average outcome in all things. You don’t get innovation.

If you want to foster creativity and excellence, you have to introduce some boundaries. Teams need some privacy from one another to develop unique approaches to any kind of competition. Scientists need some time in private before publication to get their results in order. Making everything open all the time creates what I call a global mush.

There’s a dominant dogma in the online culture of the moment that collectives make the best stuff, but it hasn’t proven to be true. The most sophisticated, influential and lucrative examples of computer code—like the page-rank algorithms in the top search engines or Adobe’s Flash— always turn out to be the results of proprietary development. Indeed, the adored iPhone came out of what many regard as the most closed, tyrannically managed software-development shop on Earth.

Actually, Silicon Valley is remarkably good at not making collectivization mistakes when our own fortunes are at stake. If you suggested that, say, Google, Apple and Microsoft should be merged so that all their engineers would be aggregated into a giant wiki-like project—well you’d be laughed out of Silicon Valley so fast you wouldn’t have time to tweet about it. Same would happen if you suggested to one of the big venture-capital firms that all the start-ups they are funding should be merged into a single collective operation.

But this is exactly the kind of mistake that’s happening with some of the most influential projects in our culture, and ultimately in our economy.

Digital collectivism might seem participatory and democratic, but it’s painting us into a corner from which we will have to concoct an awkward escape. It is strange to me that this isn’t more obvious to many of my Silicon Valley colleagues.

The U.S. made a fateful decision in the late 20th century to routinely cede manufacturing and other physical-world labors to foreign competitors so that we could focus more on lucrative, comfortable intellectual activities like design, entertainment and the creation of other types of intellectual property. That formulation still works for certain products that remain within a system of proprietary control, like Apple’s iPhone.

Unfortunately, we were also making another decision at the same time: that the very idea of intellectual property impedes information flow and sharing. Over the last decade, many of us cheered as a lot of software, music and news became free, but we were shooting ourselves in the collective feet.

On the one hand we want to avoid physical work and instead benefit from intellectual property. On the other hand, we’re undermining intellectual property so that information can roam around for nothing, or more precisely as bait for advertisements. That’s a formula that leaves no way for our nation to earn a living in the long term.

The “open” paradigm rests on the assumption that the way to get ahead is to give away your brain’s work—your music, writing, computer code and so on—and earn kudos instead of money. You are then supposedly compensated because your occasional dollop of online recognition will help you get some kind of less cerebral work that can earn money. For instance, maybe you can sell custom branded T-shirts.

We’re well over a decade into this utopia of demonetized sharing and almost everyone who does the kind of work that has been collectivized online is getting poorer. There are only a tiny handful of writers or musicians who actually make a living in the new utopia, for instance. Almost everyone else is becoming more like a peasant every day.

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Managing IP and Open Innovation

One of the biggest challenges in an Open Innovation environment is the management of intellectual property. Indeed, IP management is a real inhibitor to companies implementing OI – the IP challenges seem somewhat overwhelming. Indeed, I will shortly be teaching IP Management with a specific innovation focus to students at the University of Sydney.

A recently published article address some if these issues. It says that the key is:

  • to understand the benefits of embracing these models of IP development;
  • to have executives and board members agree on and commit to a clear business plan with respect to same; and
  • to have the right people in place to execute the plan.

Different models of collaborative IP development are
used today, including:

  • participation in R&D consortia;
  • collaboration between different companies for a
  • variety of strategic reasons;
  • collaboration with universities and other public
  • research institutions; and
  • the ‘open science’ model, where IP rights become
  • superfluous as access is generalised and data is
  • shared with little or no limitations.

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Is Open Innovation Over? What do you think?

Have a read of the excellent discussion going on around whether or not Open Innovation is actually “over”. Read here.

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Modeling a Paradigm Shift: From Producer Innovation to User and Open Collaborative Innovation

Excellent paper from Harvard on the paradigm shift from closed to open innovation. Points made include the following. Full text here.

  • When it is technologically feasible, the transition from closed producer innovation or single user innovation to open single user or open collaborative innovation is desirable in terms of social welfare and is worthy of support by policymakers.
  • Free dissemination of innovation designs is associated with the open model. Open innovation generates innovation without exclusivity or monopoly, and so should improve social welfare, other things being equal.
  • Intellectual property rights grants can be used as the basis for licenses that help keep innovation open as well as closed.
  • Policymakers should seek out and eliminate points of conflict between present intellectual property policies designed to support closed innovation that at the same time inadvertently interfere with open innovation.
  • As design costs fall, many more innovations will originate with single users.
  • Open collaborative innovation projects thrive on low communication costs.

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Policy 2.0 – Open Innovation in Policy Creation

More buzzwords? Policy 2.0? Well, its all about breaking down the barriers and enhancing collaboration. Hope Street Group believes that new online collaboration tools have an important role to play in surfacing new ideas and voices to make a positive difference on many issues, including teacher effectiveness. To that end, this summer Hope Street Group launched a virtual education policy team using Policy 2.0, their collaborative web platform. They recruited a diverse policy team of educators and professionals from the private and civic sectors across 17 states. Through an in-depth process of discovery and research over three months, the policy team devised targeted recommendations for improving teacher evaluation systems. Policy 2.0 allowed for connectivity between busy practitioners from across the country to a library of resources, to national experts, and to each other, through a tool that gave them a unique platform for engaging in education policy, with far-reaching implications.

They then documented their findings and took it to the White House.

Read the full report here.

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The “How” of Open Innovation

I want to alert you to an recent excellent report on the “how” of Open Innovation. The report is a product of two years work within the Cambridge Open Innovation Network. This network is funded by Unilever and the Cambridge Integrated Knowledge Centre. The report aims to answer the question “I want to implement Open Innovation – where should I start and what should I do?”. It provides and overview of existing approaches to Open Innovation and outlines how a company can start to implement a strategy to match the organisation’s needs.

Unilever has been a long-standing proponent of Open Innovation. Not only does this report talk about the theory of Open Innovation, but it draws on Unilever’s experience, and contains the results of 36 interviews and workshops.

An excellent document. Download it now.

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Govt 2.0 and Innovation

It’s very interesting to see the number of governments focussing on Government 2.0. Its refreshing really – policy makers stopping to think about how the recent trends in Open Innovation and Crowdsourcing can impact the way policy is defined. In my own country, the government has set up a specific Gov 2.0 committee. In the US, the talk is around openness and collaboration. It will be extremely interesting to see where this debate takes us, and whether an true Open Innovation approach can be adopted. To quote a recent Forbes article on this topic:

The White House is telling its agencies to pursue an ” open innovation“-approach to government, be visionary in their spending requests, and focus on “transformative” projects that help the climate, energy, life expectancy and the economy.

Read more from the entire article

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Open Innovation in China and India

Excellent posting on YouTube of John Hagel III talking about innovation networks and Open Innovation in China. See posting below also on TSMC. Watch this space! As organizations in North America are struggling with the “how”, large Chinese corporates are implementing Open Innovation networks as we speak!

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Open Innovation Initiative in Japan

Interesting to see governments in various parts of the world actively supporting innovation – more specifically, Open Innovation. General Electric has just announced it participation as a founding member of a new Japanese initiative to significantly further innovation in that country in the areas of healthcare, clean energy and the environment. Specifically, the new venture is based on Open Innovation. A total of $9.5 billion will be available as assets of the fund. Read more.

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TSMC and Open Innovation

When I was in Taiwan not so long ago, I was exceptionally impressed by TSMC’s foray into the Open Innovation space. You might like to read this article for an update. It is heartening to see an organization such as TSMC embracing the Open Innovation paradigm.

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Henry Chesbrough in Brazil

Came across this excellent slide deck of s seminar Professor Henry Chesbrough gave at a symposium in Brazil last year. Thought you might find it of interest.

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The value of Patents in Innovation

Patent systems are often justified by an assumption that innovation
will be spurred by the prospect of patent protection. However, little empirical evidence exists to support this
assumption. One way to test the hypothesis that a patent system promotes
innovation is to simulate the behavior of inventors and competitors
experimentally under conditions approximating patent and non-patent
systems. Employing a multi-user interactive simulation of patent and non-
patent (commons and open source) systems (―PatentSim‖), this studycompares rates of innovation, productivity, and societal utility. PatentSim
uses an abstracted and cumulative model of the invention process, a
database of potential innovations, an interactive interface that allows users
to invent, patent, or open source these innovations, and a network over
which users may interact with one another to license, assign, buy, infringe,
and enforce patents.

Data generated thus far using PatentSim suggest that a system combining patent and open source protection for inventions (that is, similar to modern patent systems) generates significantly lower rates of innovation (p<0.05), productivity (p<0.001), and societal utility (p<0.002) than does a commons system. These data also indicate that there is no statistical difference in innovation, productivity, or societal utility between a pure patent system and a system combining patent and open source protection. The results of this study are inconsistent with the orthodox justification for patent systems. However, they do accord well with evidence from the increasingly important field of user and open innovation. Read the study.

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Netflix chooses winner to $1m crowdsourcing competition

Netflix uses crowdsourcing to boost growth. Another excellent example of harnessing the ecosystem for innovation.  Read more.

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International Conference on Technological Readiness for Innovation-based Competitiveness

Innovation and technology will be key to emergence from the global economic crisis, according to speakers at a recent United Nations conference on innovation-based competitiveness. However, innovation should be collaborative and involve resources inside and outside companies and institutions.

The “International Conference on Technological Readiness for Innovation-based Competitiveness” was organised by the UN Economic Commission for Europe (UNECE) on 29-30 June. Read more…

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Recent Conference on Innovation Networks

During a recent conference at the Mack Center for Technological Innovation, academics and business leaders argued that, rather than going back to the drawing board, companies should go outside their walls and tap into “innovation networks.” Read more….

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Connected Innovation at Rockwell Collins

Instead of developing everything from scratch, engineers at Rockwell Collins are realizing the importance of tapping into the talents of those outside of our own company. Read More.

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Nature.com and Open Innovation

InnoCentive, Inc., the global open innovation marketplace, and Nature Publishing Group (NPG), a leading scientific and medical publisher, today announced the launch of the nature.com Open Innovation Pavilion. Jointly hosted on InnoCentive.com and nature.com, the nature.com Open Innovation Pavilion provides a hub for scientific collaboration and open innovation.

Companies and not-for-profit organizations (known as ‘Seekers’) can post ‘Challenges’ in life sciences, physical sciences and clinical medicine on the nature.com Open Innovation Pavilion. These ‘Challenges’ are briefs that allow Seekers to tap into external expertise to solve research problems or drive development of new products and technologies. Successful Solvers receive financial rewards. Seekers can call on the expertise from nature.com’s five million monthly visitors and InnoCentive’s community of more than 175,000 Solvers.

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New Rules for Managing Innovation: My View

Just posted on BusinessWeek – an interesting article on four rules for managing innovation today. Interesting to know what you think of these. I will deliver the headlines with my own view below:

Silos are FINALLY falling (but not in the way you may think: Personally, I do not think silos are falling to any significant extent. I think they need to fall, and I believe that everyone generally realizes this, but silos are unfortunately alive and thriving in large corporates and medium-sized businesses.

Outside-in innovation: Well, my view is that without this you are dead-in-the-water. Why? Because outside-in innovation includes basics like listening to the customer, involving your partners in the process, taking heed of the environment. The days of everyone locked in a room “innovating” are gone.

Social Media as an Innovation Tool: Everyone is struggling with this – mainly because social media is still not alive and well in the Enterprise. But it will be. Give it time! In the meantime, organizations should look to embrace social media as much as possible, and you certainly need to become familiar with it outside the organization, and look for ways in which social media can be used TODAY to drive innovation.

War Games: Well, to me this is guerrilla marketing 101 – keeping ahead of the competition, keeping your finger on the pulse, etc etc. Nothing new here, and not a capability that I would call a “new rule” for innovation.

What do you think?

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Smith’s Chips introduces Open Innovation Competition for “the next great flavour”

As I was running on the treadmill this morning, I found myself watching a television advertisement for an Open Innovation competition from Smith’s Snack Foods  (in this country the equivalent of Frito-Lay – we all grew up with Smith’s! Indeed, Smith’s Snack Food is owned by PepsiCo). I find this an excellent example of Open Innovation – the contest is for any consumer to come up with the flavour for the next range of chips. There is about two months to go to submit a catch-phrase together with a “creative image”.

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What I really like about this venture from Smith’s is the following:

  • The competition is backed up by a very meaningful financial incentive – the winner gets $30,000 in cash PLUS 1% of the sales revenue of the brand. Very motivating.
  • The website design is excellent – smart, refreshing, web 2.0-like, and inviting. You are not disappointed when you land at the site.
  • The campaign is backed up by significant media advertising and exposure. Not only is there paid advertising, but tonight one of Australia’s most popular current affairs shows – A Current Affair –  is doing a segment on this campaign. So the marketeers at Smith’s are very smart – they are looking to get this campaign as much publicity as possible.
  • The top four flavors will be chosen by a panel of judges, and then these flavors will be put to the public for voting. Just excellent. A combination of seeking the solution to a problem from the consumer, and then involving the consumer in the voting process
  • Each week the twenty five most interesting entries will be posted for public discussion. This really will generate ongoing interest in the competition

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The ingredients for success (no pun intended) of this promotion are certainly there – Open Innovation, financial reward, clever marketing, ongoing excitement, crowd sourcing in the voting process – and even a pilot trial of the top four contenders.

I will certainly be watching the outcomes from this promotion with great interest.

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Excellent example of Innovation and Crowdsourcing

This is truly an excellent example of the intersection of Open Innovation, globalization and technology. I saw it in a SpringWise, a publication reporting on new business ideas. This is a new project that aims to bring income opportunities to those in the developing world using the ubiquitous mobile phone.

Targeting the more than 2 billion literate mobile phone subscribers in the developing world, txteagle aims to help alleviate high unemployment levels in many rural areas of countries like Kenya with a crowdsourcing approach that offers new ways to earn extra money. The service connects corporations with small tasks to be completed—currently, the most common ones include software localization and translation into local dialects for companies like Nokia—and native people who can complete them in minutes by cell phone. Tasks are sent to multiple phone users by text message—”translate the phrase, ‘address book’ into Giriama,” for example—and answers are accepted as accurate when the majority of users provide the same response. Compensation is determined by the number of times an individual’s response agrees with the consensus; penalties are imposed for wrong answers, while “don’t know” responses make no contribution. Over time the system learns a particular user’s expertise, and can actively select the most appropriate tasks for them. It can also weight answers from long-term and historically accurate users higher than others, making it necessary to involve fewer other individuals when those users respond. Payment is made either to a bank account connected with an individual’s phone number—accessible at any post office or local kiosk—or via airtime credit transfers.

Case Study

Ruth & Betty, Home-Maker / Village Phone Operator, Butare, Rwanda. Ruth is the mother of four and while she reads and writes English fluently, she hasn’t been able to find much work in her local village. She’d like to own a phone, but hasn’t been able to save up the money. Betty operates a village phone in Ruth’s village. By ‘renting’ the phone to Ruth for 50 cents/hour during off-peak times when Betty has no other customers, Ruth is able to complete 3 hours of transcription tasks – accumulating $7.50 into her savings account and $1.50 into Betty’s account. A couple of more sessions like that and Ruth will be able to afford her own phone!

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Connectedness vs Openness

Open Innovation is an opportunity. It defines the potential for breaking down the barriers internally within an organization, and externally with that organization’s ecosystem.

In order to realize that potential, however, the entities in the ecosystem need to be connected. I call this Connected Innovation. Connected Innovation is what unlocks the potential of Open Innovation. However, connectedness in itself will deliver the result – its the frameworks that make Connected Innovation real that delivers the power. And technology delivers the scale.

This concept of connectedness has been reinforced just recently at the 3rd Annual Open Innovation Conference in Las Vegas when Jeff Bellairs, G-Win Director for General Mills, said: “Open Innovation is not about being external. It’s about being connected.” Jason Husk, Group Manager Technology Brokerage for Clorox, supported this stance and presented a relationship between technology, consumers, and business results as a model for connection. And Chris Thoen announced P&G’s launch of Connect + Develop 2.0 OI model through which the company will focus on collaborating with partners for mutual value creation.

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The Perception that Collaboration enables Innovation

Recent research undertaken by Computer Weekly in the US as part of a project with BT found that over 67% of respondents expect collaboration to become an important driver of innovation over the next 12 months. This is significant. 83% have sufficient budget to facilitate collaboration within the organisation, and 80% say the collaborative technologies being used have not been impacted by any budgetary changes affecting the wider IT infrastructure. This is also significant in light of the GFC.

In terms of the benefits collaboration brings to the organisation, 93% of respondents said better communication, 83% more effective staff, and 73% improved productivity. Faster innovation was cited by 70%, and lower costs by a similar number. In terms of how collaborative tools and techniques positively benefit innovation, 23% said saving time, 20% said collaboration enables the sharing of ideas, 17% said saving money or reducing costs, and 17% said sharing information over a wider area.

The challenge for these organizations is to build frameworks that allow collaboration to actively facilitate innovation. Most organizations continue to struggle with how to facilitate effective collaboration – just throwing in a bunch of tools usually does not work. It’s the building of frameworks such as Connected Innovation that provides the way forward.

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