7 Steps for Open Innovation - Conferencia Crowdsourcing, Sao Paulo, Brazil

7 Steps for Open InnovationConferencia Crowsourcing, Sao Paulo, September 5, 2014

Stefan [email protected]@lindegaard

Author, speaker and strategic advisor on open innovation, innovation management / culture and the people side of innovation.

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[email protected]@lindegaard

Stefan Lindegaard

It’s about execution!

People first, processes next, then ideas…

1. Common Language and Understanding, Motivation, Mandate and Strategic Purpose

2. Assets and Needs

3. Value Pools and Channels

4. Internal Readiness

5. External Readiness

6. New Skills and Mindset

7. Communications Strategy

7 Steps for Open Innovation

Faster pace, shrinking window of opportunity, less time for cash cows

Driven by global megatrends: faster, more open, more transparent and more connected

We need a more holistic approach to innovation!

What is open innovation?

“…a philosophy or a mindset that they should embrace within their organization.

This mindset should enable their organization to work with external input to the innovation

process just as naturally as it does with internal input”

Open innovation as a term will disappear in 5-7 years!

P&G PHARMAMEDTECH

Cycle time, money, IPR, conservatism, government regulations and internal readiness

• Speed, diversity, new knowledge pools

• Experimentation (don’t be left behind)

• Marketing as well as innovation vehicle

• More cost-effective than hiring consultants

Corporate benefits:(open innovation/crowdsourcing)

Change how we innovate

Be competitively unpredictable

Develop the right conditions and framework

Design, build and sell awesome products together.

Is the real business model facilitation?

1. Develop a community2. Make it work in chosen area (vehicles)3. Move into other industries (complex mechanical devices)

This can work for startups. What about SME’s and bigger companies? New business areas?

Image: Colin West McDonald / CNET

“FirstBuild is global co-creation paired with a microfactory on site,” said Chip Blankenship, CEO of GE Appliances. “We will innovate and bring products to market faster than ever before.”

Samsung Open Innovation Center has 3 of 4 legs focusing on startups

• the start-up value pool is sizzling hot

• the big issue is not IPR, but how to scale up open innovation and how to communicate

• tolerance for failure, experimentation and “smartfailing” are growing issues

• companies are about to upgrade their innovation capabilities (some are in for a surprise)

• Near future: From 1-1 to many-to-many

Current (open) innovation trends

1. Common Language and Understanding, Motivation, Mandate and Strategic Purpose

2. Assets and Needs

3. Value Pools and Channels

4. Internal Readiness

5. External Readiness

6. New Skills and Mindset

7. Communications Strategy

7 Steps for Open Innovation

Step 1: Common language and Understanding, Motivation, Mandate and Strategic Purpose

“You need to speak the same language if you want to get internal and external stakeholders onboard.

This starts with a clear agreement on how innovation – internally as well as externally focused - fits the specific situation of your company.”

- Stefan Lindegaard

To Clorox, open innovation means

• More capabilities and expertise: Using others to deliver meaningful innovation

• More find: Developing external networks to exponentially increase the source of new ideas

Clorox wants to use open innovation to:

1. Find ideas, technologies and products2. Outsource entire chunks of product development3. License / sell internal ideas and technologies to others 

Clorox, don’t get too narrow!

“We will no longer talk about open innovation in most industries within the next five to seven years.

It will just be about innovation, but the level ofexternal input to the innovation process will be be much higher than what we see today.”

- Stefan Lindegaard

• What is your motivation for pursuing open innovation?

• Why is open innovation relevant to your company, its present situation, and its mission and vision?

Two key questions:

Tie this into your strategic purpose and innovation mandate!

Does Brazil lack strategies and mandates?

Don’t get me started on top executives

• Lay out the resources and authority given to the innovation team

• Clarify how potential conflicts are to be handled

• Encourage stakeholders to solve problems on issues such as resource allocation and commitment without involving the executives

A clear innovation mandate should:

The TBX model or why middle managers stop…

• T (Top Down): Get executives onboard, personally committed to innovation. Without executive support, no change occurs

• B (Bottom Up): Value creation begins with people, one by one, team by team. Nothing happens unless you get employees engaged

• X (Across): Middle managers get the job done (for good and bad) – set the right objectives and incentives!

...innovation just by doing their job!

• What is the most important question to have in mind when leading change driven initiatives such as open innovation?

• It is simple yet a question that everyone will ask themselves…

Think / Reflect

What’s in it for me?

Step 3: Value Pools and Channels

Employees SuppliersManagers Academics / institutions

Executives VCsAlumni Startups

Business unit / function

Users / consumers

Government

Competitors Inventors

“This is important. Most big companies have 8, 10 or perhaps even 12 different external value pools that they can look into.

However, even companies that are doing well with open innovation are generally not capable of working with more than two to four value pools at the same time.”

- Stefan Lindegaard

InnoCentive Alliances /joint ventures

Campaigns(Comm / Public)

EntrepreneurDay

Consortia

MyStarbucksIdea.com

Campaigns(Comm / Public)

SupplierSummit

CREDIT: OVO Innovation

“As with value pools,most companies can only be successful in managing two to four channels at a time, especially when you are new to open innovation.

You need to experiment to determine which channels work best for you.”

- Stefan Lindegaard

Questions?

Step 4: Internal readiness

Today, innovation is about having groups of people come together – internally as well as externally.

This requires a networking culture that is designed, supported, and modeled by your company’s leaders.

You simply can’t have a strong innovation culture without a strong networking culture.

- Stefan Lindegaard

What does a good networking culture look like?

Networking efforts require direction, training and time. Few executives get this.

Embrace experimentation – and the failures that come along with it!

More than half of the companies do not recognize failure as an inherent part of an innovation culture!

“Two types of failure:

• honorable failure is where an honest attempt at something new or different has been tried

unsuccessfully and

• incompetent failure where people fail for lack of effort or competence in standard operations.”

Credit: Paul Sloane

Developing a culture that is constructive about failure requires a new vocabulary.

Smartfailing

When an organization embraces smartfailing, it de-stigmatizes failure internally and uses failure

as an opportunity to learn and to find a better course.  

There are no quick fixes because the top executives that got us into this mess are not

ready to lead us out of it!

Too much focus on products, technology

Silo rather than collaborative approaches

Poorly defined innovation strategy (if any)

Lack of resources in budget, people, infrastrucure

Unrealistic expectations on time, resources

If you really want to change a culture…

Reward behaviors, not just outcomes!

Step 6: New Skills and Mindset

A CFO is wary about investing in the training and education of the employees.

He asks the CEO: ”What happens if we invest in developing our people and then they leave the

company?”

The CEO is a bright person and replies: ”What happens if we don’t and they stay?”

1) Holistic point of view (intrapreneurial skills)

2) Ability to constructively handle conflict

3) Optimism, passion and drive

4) Curiosity and belief in change

5) Tolerance for / ability to deal with uncertainty

6) Adaptive fast learner with sense of urgency

7) Talent for networking / strategic influencing

8) Communication skills

Horizontal: disposition for collaboration across disciplines

Vertical: depth of

skill which allows to contribute

Credit: Tim Brown / IDEO

Only T-shapes:

“Occasionally, we have people who don’t really have a depth of skills, and they really struggle. They don’t get respect from the group.”

Only I-shapes: “…very hard for them to collaborate…each individual discipline represents its own point of view…becomes a negotiation…you get gray compromises… The results are never spectacular but at best average.”

What skills / key people do you need now, short and long term? How do you get access to them?

Discovery – Incubation – Acceleration: Have the right people at the right time!

• Future potential versus past competencies (HBR, June 2014)

• Adaptability is key – but in what direction?

• Future innovation leaders create communities (shared sense of purpose, values and rules of engagement) • Future innovators are intelligent in many ways

• Build the right conditions and frameworks

Finding and developing the right people

• Begin by training the trainer

• Intrapreneurship-like programs are one of the best ways of identifying and developing people who will drive innovation forward

• Bring in real life experiences

• Training program itself must be agile to keep up with emerging trends in innovation

• Don’t forget the executives

Thoughts on training programs

Step 7: Communication skills

• View communication in the broad sense – include networking and stakeholder management

• Have clear messages that resonate with the audience – go beyond the corporate speak

• Use a range of communication tools – too few innovators know about social media

• Have a plan in place…

Great innovators are great communicators!

It’s about execution!

People first, processes next, then ideas…

Book signing now!

Corporate innovators – breakfast tomorrow?

Send me your questions!

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[email protected] / @lindegaard

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