Archive for February, 2009
For many years innovative organisations have been trying to resolve the conundrum of how to get to bigger impact innovation more quickly and with less investment. In answer to this, the practice of Open Innovation is increasingly being adopted as the normal mode of operation for leading innovative companies. Open Innovation, applied correctly, offers the opportunity to access leading capabilities from around the world, exploiting complementary technologies and partnerships to short-cut the need for expensive internal activity and to realise innovation strategies faster. Some companies have adapted to this new way of working quickly and relatively painlessly but many organisations have had teething problems, to say the least. We have identified 10 common mistakes which can stop organisations from benefiting from the Open Innovation way of working.
1. Engaging externally without a clear innovation strategy
With all the talk about Open Innovation, it’s tempting to just give it a quick go. Just because Open Innovation is current flavour of the month and you’re just trying it out doesn’t mean that you should avoid linking it to your strategic objectives. In this respect, it’s just like any other type of innovation – if it’s not linked to strategy, you’re unlikely to be able to implement it and you’ll end up burning money.
2. Poor definition of the requirement or need
A poorly defined initial brief can make the crucial difference between success and failure to connect with potentially relevant partners. One aspect of poor definition which I see time and time again in Open Innovation is requirement definitions which focus on pre-conceived solutions rather than focusing on functions and parameters to be delivered. This kind of thinking really narrows down the solution space at a point when the process should really be divergent and it can seriously obstruct cross-industry engagement. A key area where Open Innovation can really score is in bringing in cross industry connections. These are great because you’re less likely to have competitive issues and if you’re clever about connecting with the right industry, their technology can be more advanced than yours. If your brief stops you making cross industry connections you’re going to miss out on big opportunities for faster, lower cost and bigger impact innovation.
3. Failing to get sufficient internal business or brand team engagement
Using Open Innovation, you can connect with great partners, but if you can’t get the attention of your internal business or brand teams then all you effort can be wasted. Clearly, having a shared innovation strategy will help a lot but sometimes you also need to find ways to engage your internal customers in the possibilities that the world outside the business can offer. Creating an engagement strategy upfront linked to organisation and processes to deal with this new form of innovation can be critical in getting buy-in and “pull” for your externally sourced ideas and technologies.
4. Not having a clear, aligned internal view about how to handle IP
This may seem obvious, but Open Innovation projects can stall not only as a result of failure to agree external terms around IP licensing or sharing but also through internal misalignment with regard to IP. I remember a meeting amongst IP professionals where Open Innovation was discussed where two whole flip charts of IP issues were raised before a single positive aspect of Open Innovation was mentioned. The IP team needs to be actively engaged in your Open Innovation strategy, with a mindset based on finding ways to make it happen.
5. Ruling out radical or unexpected options too quickly
One interesting factor with broad based Open Innovation is that potential solutions can come from anywhere. This can sometimes make it difficult to understand the value of solutions which are really different. If the requirement has been set poorly, it can be all too easy to miss the option which might give you a real innovation edge.
6. Lack of variety in Open Innovation approach
The Open Innovation area has evolved significantly since its inception some year ago. This means that there are many options which can help you to connect with potentially valuable partners. Many companies still fail to exploit the richness that is on offer and stay with one supplier. This can seriously jeopardise the chances of finding the right partner. For example, the average success rate achieved through idea market places such as Nine Sigma or Innocentive is around 40%. That means that 6 times out of every 10 you will fail to get the result you want. The best option is use a combined approach of two or more Open Innovation service providers.
7. Not understanding the attitude as well as capabilities of potential partners
A potential partner might have the right technology to satisfy your needs but do they have the right internal motivations, attitudes and behaviours to become a long term, trusted partner? Many of the on-line Open Innovation tools fail to give you a flavour of this important part of your potential partner’s profile. You need to make sure your evaluation tools and review processes specifically probe this area.
8. Not respecting the needs of potential partners
In any innovation process, lack of feedback can quickly kill interest from the solution provider end. At the least, the solution provider deserves a rapid and detailed response so that they can stay engaged with the process and feel better equipped to answer the next challenge. The decision making processes in large organisations can be long and drawn out and without any interim feedback or indication of good faith the solution provider can become suspicious even before a direct contact has been made. This really isn’t a good way to start a new long term relationship.
9. Looking at potential partners in isolation
Modern innovation often requires complex combinations of capabilities to be brought together, creating unique and sustainable value to the end customer. A step that is commonly missed is to try to “join the dots” and consider interesting combinations of capabilities. An even more sophisticated route which is often overlooked is to creating additional value by bringing together disparate network contacts to solve problems which are mutually important to you and your partners.
10. Last but not least…failure to build trust
If you were asked by a mysterious company to share your deepest technology secrets in an open “non-confidential” way with only the vaguest chance of any reward at the end, would you do it? The only reason that solution providers do just this is because they have some (possibly unwarranted) trust in the Open Innovation process and some belief that they may have just the right solution for the client. Going into Open Innovation without a win-win approach and behaviours which deliberately build trust will quickly kill your chances of getting anything meaningful and long term from it.6 comments
Recently I’ve been reading Driving results through social networks by Bob Cross. I wanted to read this book because I’m looking for insights into the latest thinking on building new external Value Networks for organisations engaged in Open Innovation. Although a lot of the book is focused on the important area of improving internal networks within organisations I was struck by the section of the book dealing with behaviours which can energise networks both inside and outside of organisations. Here are the behaviours which were encouraged:
1. Do what you say you’re going to do and address tough issues with integrity. Cross says that people are energised by people that stand for something bigger than themselves. I would put it more simply – trust is important for any form of networking to work. Being consistent helps to build trust.
2. Look for realistic possibilities in conversations and avoid focusing too early or heavily on obstacles. Clearly this behaviour is critical to getting people to offer and build on ideas. I would say that Cross could go further here by suggesting that sometimes you have to suspend disbelief for a while and go with a conversation. I think the word “realistic” is a bit of a dangerous word to apply to early stage conversations as it implies an “already listening” mindset where it is easy to screen out options which might have potential when combined with other input from elsewhere in the network.
3. Become mentally and physically engaged in meetings and conversations. I would suggest that this can be take even further by bringing real enthusiasm to the interaction. I’ve often found that injecting enthusiasm into a discussion at the right time can help propel the development of new ideas. Often the other person in the conversation is already passionate about the subject area and reflecting rather than dampening that can really help to bring out new ideas and insights.
4. Be flexible in your thinking and use your expertise appropriately. I often advise clients to engage with external/internal experts from complimentary disciplines to support their decision making. This practice, in itself, is part of the process of opening up the innovation activity.
5. When you disagree, focus on the issue at hand and not the individual. This is pretty obvious really, but if this rule is ignored the trust can quickly disappear from an interaction.
The book contains some good advice, especially for senior managers wishing to improve performance of their business and even includes a section on calculating the value of a network. From my viewpoint I was hoping for a little more on Open Innovation and external networks.No comments