Thoughts from the Co-Dev 2011 Conference on Open Innovation

Submitted by on Thu, 03/24/2011 - 12:33pm

Doug Berger, Managing Director, INNOVATE recently participated in the Co-Dev 2011 Conference.   After speaking with many attendees, his take on the state of Open Innovation: ”Lots of enthusiasm for open innovation, disappointment in the results. OI is delivering gains for the efficiency of new product development … time to market, new product features, cost, technology scouting.  BUT open innovation is having only a minimal impact on top-line revenue."

There seem to be two faces to Open Innovation … supplier-facing and market-facing.  Most open innovation resources continue to face the supplier, aimed at internal needs. Might that have something to do with the paucity of Big I innovations?

Highlights and key takeaways:

Relationships with Suppliers - Companies discussed relationships with suppliers evolving from The Deal to the Strategic Relationship.

Barrier – Focusing on the Deal:  Doing The Deal is never the objective; it is about meeting the diverse needs. 
Insight: The best collaborations focus on growing the pie not dividing it.  In structuring any deal, surface the negatives then create options that will work; avoid tunnel vision on getting the deal done.

Screening Unsolicited ideas - Strategic Relationships put more stress on unsolicited product concepts or technology solutions.  Big companies with mature Open Innovation experience might have 500 finds … leading to 50 deep dive reviews to get 10 agreements.  Quickly vetting ideas through a small virtual community or advisory team seems to work.

Barrier – Wrong People doing vetting:  Some people are natural innovators … most people are not. 
Insight: The core of natural innovators is actually quite manageable.  Find and empower your natural innovators.  This doesn’t require a large-scale standard process.  Do you have your natural innovators screening ideas? It is also critical to staff with people knowledgeable about the company and the technologies and ideas needed. 

Barrier - Wrong Scale processes: I found companies new to open innovation putting in place processes that could handle a high level of activity when they really needed only 1-2 of the right agreements. 
Insight: In the early stage of open innovation … think simple framework & specific business impact. Innovation isn't a numbers game. 

Crowd Sourcing ideas – Most idea management systems are aimed at internal participation.  Experienced companies are seeing familiar faces keep cropping up around sound innovative ideas. Again, innovation isn't just a numbers game. External crowd sourcing is still in its infancy.

Barrier – Opinion based decisions: When people submit ideas, the evaluation boils down to opinions.  Opinions of a few core advisors or opinions from the crowd. 
Insight: When submitting ideas, have people provide some evidence or suggestion for proving out the idea. 

What do you think?!

Doug is Managing Director, Innovate, expert in Breakaway Growth & Innovation.  He can be reached at doug@innovate1st.com 

Comments

by farhan Bui - 12/21/2011 - 1:49pm

Several leading companies,

Several leading companies, like Procter & Gamble, Dow Chemical, IBM and Hewlett-Packard, clearly the pursuit of profit from open innovation strategy. Following the successful example, the manager focuses on the need to establish an open innovation strategy based on active collaboration with external partners.

by Denis Remon - 04/11/2011 - 3:05pm

Hello Doug, I understand very

Hello Doug, I understand very well what you're saying.  I did a doctoral thesis on Open Innovation (OI) and organizational capacities just recently.  I've studied SMEs through case studies.  The problem is not exactly between OI-suppliers or OI-customers.  The problem is twofold: 1) You will not succeed at OI only by considering technological innovation. You must tap into organizational capacities (OC) for the latter undergrounds the former. 2) PDMA is a very dynamic organization but has no expertise in Open Innovation as such.  They market the concept of OI to managers but you'll rarely find any academic with published records regarding OI in their events, but only managers sharing their "experimental management practices".  This is not THE Open Innovation we find in the literature.  Many people have read Chesbrough's book (2003), but that book and the followings he wrote are describing how large businesses have managed their innovation behaviors while in crisis.  His books are not operational i.e. concrete stuff to apply in one business.  Many people have found the trap...  PDMA is one of them.  So, if you judge OI through what you hear from PDMA, you are certainly misled.  This is very easy to verify.  Try to find any scientific or academic papers out of PDMA conferences coming from OI scientific mastering OI and you won't find any.   Denis Remon, MBA, DBA, Ph.D.Any questions?: email at denis.remon@rdpro.ca A PDMA member