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.
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
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.
Interesting article in the New York Times: “Innovate, Yes, But Make it Practical”
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
- 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”?
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.
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.
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.
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.”
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.
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.
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.
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?
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.
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.
If you are new to open innovation, have a look at the following video. The music becomes a little tedious, but it is a great place to start.
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.
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!
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.
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.
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.
The upcoming i2i conference at the United Nations on June 8 and 9 will focus on Open Innovation, collaboration and incentivized competition. Great line up of speakers. Keynote address by Ban Ki-moon. Here is the program.
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.