This year`s inaugural Open Innovation Summit in Orlando FL, 2-5 December 2009, was an intensive and successful one, providing detailed insights into how Open Innovation is manifesting itself as a fast developing paradigm shift. There was a general consensus among the many participants that the value proposition of open innovation is too good to miss out on.
We learned the simple fact, that the smartness of open innovation lies in the fact that in this field you pay only for the successes, i.e., you are not being required to spend precious resources on developing the massive parallel processes inherent in real innovation projects.
Corporate Open Innovation Leaders
Corporate champions of open innovation, such as P&G, Johnson & Johnson, Shell, Xerox, HP, CSC, and Cisco, have all demonstrated their strategic approach to the business art of borrowing brilliance and tapping into diversity. Strategies span from Shell Game Changer`s venture centred objective of “Bringing Silicon Valley inside” calling for “Any idea, Anyone, Anywhere, Anytime “, to CSC`s centrally organized Innovation Office, and even to P&G`s ultimate “Proud of found elsewhere” mantra.
Johnson & Johnson confirmed that technology lifecycles are getting ever shorter and are being accompaniedby onrushing technology convergence dynamics. Combined with the increasing global health care challenges this points to the conscious need to leverage the ideas and capabilities available in the world.
Practising open innovation in-house
While the opening up of processes is an obvious business strategy, for Johnson & Johnson, owning the means of production plays an important role in active engagement in the open innovation process. It was highlighted that the inevitable initial internal resistance should be counter-managed.
For instance, open innovation drives should be presented to employees as activities focused on the search for complementary resources and opportunities not competing resources. Likewise, practising open innovation internally, in order to foster a motivating culture dynamically identifying and leveraging internal knowledge/ competencies, including learning to ‘fail forward’, should be considered a key business management requirement.
Relationships - the focus for optimization
From a corporate strategy perspective, some argued that businesses following the trend towards open innovation have adopted a strategy of shifting their optimization focus in the following manner:
• 1970s: industries
• 1980s: companies
• 1990s: capabilities
• 2000+: relationships.
From a management perspective, the main recommendations from this year`s Open Innovation Summit are the following:
1. Don’t waste time on best practice; invest your brain capacity in next practice.
Spending time searching for best practice and examining bench-marking exercises will never guarantee the business lead. You must concentrate on analysing what will be the ‘next’ practice and organize strategically to fit this framework.
2. The practical impact of having in place proper performance and benefit metrics.
Open Innovation is widely under estimated, and internal performance metrics need to be defined and implemented. What gets measured gets done!
3. The important strategic principle of never involving legal departments in negotiations.
Understand the importance – from a results oriented perspective – of never engaging formal legal competencies into the negotiation phase. Only involve them when negations have been concluded and frameworks established.
4. Organizational requirements for allocating dedicated resources and clearly defined areas of responsibility.
Seek out people with the right social mindsets and appoint them formally to drive and facilitate the processes of open innovation and internal development. They should have the full support of top management, which should demonstrate active interest in developments.
Orlando, FL December, 2009, a first hand report by Sam Kondo Steffensen, PhD, E*MBA, CEO Millionbrains A/S