12/11/12 1 Open innova-on: The past, the present and the future Prof. Dr. Wim Vanhaverbeke Hasselt University ESADE Business School Na-onal University of Singapore Open Innova*on Seminar Sao Paulo – November 12, 2012 1. Do you have to be involved in NPD / NBD? Should we refocus OI to make it more relevant? • Tradi-onally: – Technology driven, and applicable to large advanced MNEs (Xerox) – Focus on the innova-on funnel: • Focus on new product development • How external partners help improve our internal NPD? • How our technology can be mone-zed by licensing out or spinning off our technology? Open Innova-on: View in 2003 Our current market Our new market Other firm´s market External technology insourcing Internal technology base External technology base Internal/external venture handling License, spin out, divest Source: Bengt Järrehult based on Chesbrough Should we refocus OI to make it more relevant? • Tradi-onally: – Technology driven, and applicable in large advanced MNEs (Xerox) – Focus on the innova-on funnel: • Focus on new product development • How external partners help improve our internal NPD? • How our technology can be mone-zed by licensing out or spinning off our technology? • How relevant is that for your company ? • Do you have a staged gated, open innova@on NPD process? Broadening the scope • OI when it is not related to your NPD: – You are a service company with no technical exper-se – SME with insufficient technological exper-se – Government agency: • Nasa: new technologies may help you a lot in your mission as space agency • Insourcing knowledge of others in an indirect way through an open business model (OBM)
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12/11/12
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Open innova-on: The past, the present and the future
Prof. Dr. Wim Vanhaverbeke
Hasselt University ESADE Business School
Na-onal University of Singapore
Open Innova*on Seminar Sao Paulo – November 12, 2012
1. Do you have to be involved in NPD / NBD?
Should we refocus OI to make it more relevant?
• Tradi-onally: – Technology driven, and applicable to large advanced MNEs (Xerox)
– Focus on the innova-on funnel: • Focus on new product development • How external partners help improve our internal NPD? • How our technology can be mone-zed by licensing out or spinning off our technology?
Open Innova-on: View in 2003
Our current market
Our new market
Other firm´s market
External technology insourcing
Internal technology base
External technology base
Internal/external venture handling
License, spin out, divest
Source: Bengt Järrehult based on Chesbrough
Should we refocus OI to make it more relevant?
• Tradi-onally: – Technology driven, and applicable in large advanced MNEs (Xerox)
– Focus on the innova-on funnel: • Focus on new product development • How external partners help improve our internal NPD? • How our technology can be mone-zed by licensing out or spinning off our technology?
• How relevant is that for your company ? • Do you have a staged gated, open innova@on NPD process?
Broadening the scope
• OI when it is not related to your NPD: – You are a service company with no technical exper-se
– SME with insufficient technological exper-se – Government agency:
• Nasa: new technologies may help you a lot in your mission as space agency
• Insourcing knowledge of others in an indirect way through an open business model (OBM)
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• KLM Royal Dutch Airlines, the North Sea Group and Spring Associates joined forces and founded SkyNRG in Nov 2009.
• Goal: to help create and accelerate the development of a market for sustainable jet fuel (safe, sustainable and affordable) & avoid large price swings in petro-‐based kerosene
• Crea-ng a viable market for sustainable jet fuels for avia-on can only be achieved by combining exper*se and experience in the fields of air transport, product knowledge, R & D, regula*on and effec*ve sustainability criteria
• SkyNRG is the hub firm in the ecosystem
SkyNRG
Financial world (VCs…)
Airline industry
Govern-‐mental agencies
Biofuel value chain
KLM’s value driver? KLM profits as a customer of a steady supply of sustainable and affordable biofuel
Open innova*on: SkyNRG sets up the avia-on biofuel value chain and drives the accelera-on of joint
technological innova-ons between partners
Only for large companies?
• Is innova-on ecosystem building only for large companies such as KLM?
• No, Curana is highly successful and has only 25 employees
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Curana Curana: combining innovaEon and industrial design
• The old situaEon: – Steel mudguards and fenders – Belgium as market (10 million inhabitants) – Family owned business
• Challenge: – Growing economies of scale and globaliza-on of the industry – Strategic change:
• differen-a-on through innova-on • or price compe--on with low-‐cost import
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Curana: B"Lite : Mudguard of Curana
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Curana: innovaEon combined with industrial design in low-‐tech markets
• Open innovaEon: – combina-on of internal and external knowledge
• external design company • polymer extrusion manufacturer • Mold makers • Material suppliers • …
– Lead-‐users (bicycle manufacturers) promised to buy B”Lite via an exclusive deal which is limited in -me (Batavus and Sparta)
Curana: Spectacular results
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Curana: a small company in transformaEon
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Original Design Manufacturer
• price sejng • design driven • added value
OEM ODM OSM OBM
Original Equipment Manufacturer
• price pressure • technology driven • no added value
Open innova*on? Innova-on capability is in the network.
Managing the network for innova-on
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MagIQ
02/11/12 16:05Curana magIQ - Fidlock GmbH
Page 1 of 2http://www.fidlock.com/en/applications/curana-magiq.html
Fastener: SNAPApplication: Bike luggage systemManufacturer: CuranaProduct name: magIQ
With the magIQ system, Curana hasdeveloped a solution for attaching items ofluggage and accessories to bicycles at theplace they are actually needed. Theinnovative bike luggage system thereby offerscyclists completely new possibilities for easyattachment and detachment of panniers,lights, air pumps, locks and flasks.
Secure attachment with a simple "snap"
The magIQ system from Curana allows you to secureluggage and biking accessories to the bicycle with a quick"snap" – and to detach them again with ease. The clever"luggage concept" is based on the Fidlock SNAP male fixand SNAP male retractable fastener as well as the FidlockSNAP female pull and SNAP female push, which are highlysecure and easy to use. Thanks to the proven FidlockPrinciple that combines a magnetic fastener with amechanical snap fastener, items of luggage practically
Application areas
Fitting
Material/colour
Other features
Innovation based on Fidlock technology
With product characteristics such as fast, secure attachmentand detachment in addition to simple one-hand operation,the Fidlock SNAP fastener forms the core of the magIQsystem. It has allowed Curana to develop a completely newand highly flexible "luggage concept" for bicycles that makesfor an improved biking experience – in keeping with Fidlock's"Fun + Function" Principle.
Find more information at: www.curana.com
Products
Stadthelm / ABUS
Curana magIQ
Sammies by Samsonite
Salomon SAS
Porsche Design Sport /Bag
Porsche Design Sport /Boot
HOME NEWS PRODUCTS APPLICATIONS COMPANY CONTACT
Deutsch
MagIQ A new standard to fix what you need where you need it on your bike
ApplicaEon: bags
OI is relevant when your products are commodi-es
• Petrobras pumps crude oil from wells and produces petro products (commodi-es)
• Product innova-on is not a value driver • Effec-veness in oil well explora-on and extrac-on is
a major value driver • Set up a collabora-ve innova-on ini-a-ve
(ecosystem) with Schlumberger and others to advance their technology in order to find the best wells earlier than compe*tors and to extract those wells in ways not known today.
Broadening open innovaEon
• Past – NDP / NBD as applica-on of OI
– The firm is an innova-ng company (only hi-‐tech)
– One on one (inside out and
outside in) – OI is not related to a business
model – Manage individual rela-ons
• Future – All value drivers can be a
reason to develop OI – The firm should not be an
innovator, any company can be an ins-gator of OI
– Involve a network of partners in an ecosystem
– OI comes in indirectly through OBM
– New role of ecosystem orchestrator
– Need new management processes to make a ecosystem successful (N & S, 2010)
• Printed Pringles at P&G • P&G wrote a public brief describing the technical problem to be solved
and sent it out worldwide. A professor in Bologna had inherited a bakery. He had dabbled with the equipment and created an edible food dye that could be printed on cakes and cookies. P&G licensed the IP from him and launched Pringles Prints in eight months (compared to spending one year just discussing IP with the large company). Within one year, the new product grew P&G’s revenues 14%. (Larry Huston -‐ P&G)
• Pringles’ sales total about $1.5 billion annually. • 14% = $ 210 million
• P&Gs revenues 2011: $ 82.6 billion
• Pringles sold to Kellogg in 2012
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3 examples
• Swiffer duster • UniCharm (Japan) had the technology and product but not
the distribu-on power to sell the product worldwide • P&G had the distribu-on ower • Licensing deal to sell the Swiffer duster outside Japan
3 examples
• DSM – Dutch performance chemicals company (8 bill euro revenues)
– Open innova-on also in long term development of growth plavorms
IntegraEon of OI with business and corporate strategy
• What is the value of OI examples for companies? • Start from a corporate growth strategy • What are the long term growth areas? • Which technologies do you need, and which are no longer
crucial • How to get these new technologies / competencies. Who
to partner with? • Define alliance targets and build the rela-onship
– Different for LT growth through NBD or ST product improvements
– Different types of partners – Different types of involvement and risk taking – Different teams and team members
Open innova-on as part of the overall strategy execu-on
Want
Find
Get
Manage
Defining the targets. Which capabiliEes do we need to deliver the innova-ons?
Ideas Management in rela-on to defined needs ScouEng for capability providers
Define business goals of alliance and likely alliance type. Approach & build deal quickly or separate
Source; Adapted from Slowinsky & Sagal, 2010, RTM, September-‐October, 38-‐45
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3. Apply open innova-on in rela-on to other assets!
The case of branding
Open innova-on and branding
• Does your firms have brands? • Did you ever think how openness can help you in advancing sales of exis-ng brands or how to build new ones?
• Open innova-on can / has to be smoothly integrated in these new branding strategies
• We use a con@nuum from closed to open focusing on examples of Unilever
5. Open innova-on and IP
License scheme of Bekaert & ConEnental (technical standards)
Bekaert Con-nental
Other clients
Other suppliers
Proposal: • X = …% of net sales value of supplied product • Supplier collects royalties • Cross-license agreement between client and supplier implying:
• Bekaert to supply "other clients" at X% • "Other suppliers" to supply the Continental at X% • Bekaert grants sublicenses to "other suppliers". The latter can supply to
"other clients" at 2X%
0%
x %
2x %
100% 100% 60%: compensa*on for licensing ac*vi*es 40%