Archive for the 'Innovation direction' Category
Here as promised are a draft list of Open Innovation Principles. I’ve framed these around the type of Open Innovations that CoCatalyst, my company offers so they will need some adaption to other Open Innovators. It would be great to get your feedback on this Charter.
The CoCatalyst Charter for Open Innovation
The purpose of this charter
Open Innovation offers a way for companies to identify faster, lower cost and more impactful business growth solutions with potentially more certain outcomes than can be obtained through traditional innovation models. Whilst Open Innovation offers big benefits, in our experience there are a number of concerns people have with this approach. What we seek to do is to work hand in hand with our clients to overcome these issues and ensure they get the most from Open Innovation.
The purpose of this charter is to spell out how we do this.
The way we work
Helping you succeed
We are experienced in the area of Open Innovation and we can help you through the entire process, engaging at both strategic and tactical levels as required. We will work closely with you to identify what a successful outcome would be for you and agree the steps needed to achieve it.
We will not undertake work where a conflict of interest exists. We make sure dealings with third parties (e.g. solution providers or seekers) are fair and even handed because we want to make sure that both our reputation and your reputation are protected.
We will keep you informed of progress through regular updates.
In our experience, we have found that up-front dialogue, clearly setting expectations and continued two-way communication are essential to building enduring and trusting relationships. Our Open Innovation process applies this principle throughout the activity programme and with all parties.
You are in control
We operate a stepped Open Innovation process and you have the opportunity to redirect or stop particular activities at any point.
We will not make any commitments on your behalf without your formal agreement.
Delivering what we promise
We will meet the timeliness and quality commitments we have made and ensure there are no surprise fees either from Cocatalyst or Associated Agents.
We will take your needs or technologies and turn them into a form which allows us to share them at the most appropriate level of confidentially. We will agree with you how much or how little you want us to share with potential solution providers or seekers. We will agree with you which industries and experts to approach and more importantly those not to approach. We are happy to sign your non-disclosure agreement.
Providing relevant and credible Information
Our process is designed to focus research on finding high quality contacts by targeting potentially strong solution areas and linking to industries where appropriate capabilities or needs already exist. We understand that your time is valuable so we focus on ensuring that the information we provide is relevant and based on solid evidence.
Delivering the benefits into your business
When we have identified promising solutions and potential partners, we will help you to understand the best way to integrate these with your current business and systems.
In later posts I’ll go into a bit more detail behind why I’ve chosen these principles. Hopefully, in future, this Charter might¬†make a small contribution¬†to trust building in Open Innovation.No comments
Having been working in the field of Open Innovation for some time and having come across a number of Open Innovation “victims”, I’ve been reflecting on the need for some statement of principles around Open Innovation. To this end, I have prepared some¬†ground rules¬†for Open Innovation and in upcoming posts I will set out to share these. I’m doing this to provoke some debate or reaction and also to check my thinking. Watch this space for more.2 comments
I’ve recently found out about another Open Innovation network with a different approach, the Birmingham, UK based Innovation Xchange UK, or IXC-UK. IXC originated in Australia 6 years ago although the model has only been operating in the UK for 2 years. This not-for-profit organisation applies a more hands-on approach to getting to know it’s client’s needs than other Idea marketplaces such as Innocentive or Nine Sigma.¬†Innovation experienced IXC intermediaries will “go native” by spending 1 day a week at the client site. This way they can really start to connect to the client’s requirements. The IXC also has a repository of innovation capabilities which the Intermediaries can access in confidentiality protected way. The Intermediaries get together on a regular basis and share problem situations that their clients are working on to see if someone in their network can provide a solution. Industry cross-over solutions are common because of the scope of the IXC network and because many IXC clients are global organisations, solutions can also come from anywhere. From what I’ve found out so far,¬†I think the IXC might well provide another dimension to¬†your Open Innovation toolkit.No comments
Apart from the specific area of Open source code, where collaboration is key, in my opinion, Open Innovation has yet to fulfil its potential in generating powerful collaboration between overlapping communities of practice. When the Wright brothers turned their attention to making the first powered heavier-than-air flying machine, they brought with them considerable expertise from bicycle manufacture and through their connections in the burgeoning automotive companies, they brought in a power plant with an acceptable power-to-weight ratio. The Wright brothers didn’t work in a vacuum, however,¬†but shared their thoughts with a number of similarly minded,¬†but diversely expereinced, enthusiasts around the world and learnt about flight control from their own and others’ experiments with kites and gliders. The common factor in this collaboration was a shared interest and enthusiasm. Deep levels of collaboration were achieved without the power of the internet, but¬†largely through¬†the now unfashionable medium of letter writing.¬†
I see some signs today of similar¬†virtual groups coming together to work on things like electric cars and open source software but I think that often bigger companies miss out on the opportunity to benefit from this sort of collaboration. I don’t think it would be impossible for a bigger company, given the right network connections and attitude, to encourage innovation which is both collaborative and mutually beneficial with a network of collaborators from different but complementary fields. If this happened, it might start to move us towards a more collaborative and less competitive Open Innovation Version 2 where the rewards of Open Innovation in terms of growth could be far larger than those enjoyed today.No comments
I visited a company (who will remain nameless to protect the innocent) the other day who, although doing the everyday stuff OK, seemed to¬†have no business direction or worse still,¬†any strategy aimed at the future. We discussed some possible innovative ideas and some new ways the company might market itself but I couldn’t check any of these against my first innovation question “does it fit with strategy?”. All I got was silence and “well we might do this, or that”. The whole experience served to remind me how difficult it is to create meaningful innovation in a strategic vacuum. It can work but only if the company has a single decision maker in charge of the business who can decide if the innovation is what he or she wants. Otherwise, it is very easy to go around in ever decreasing circles, eventually disappearing in a puff of obsolescence.No comments
Recently I met¬†Dr Bettina Von Stamm of the Innovation Leadership Forum¬†at the FDIN Breakthough Innovation seminar where she delivered a very interesting and insightful presentation on Open Innovation. Afterwards, I asked her if she would mind answering a few questions on the topic of¬†Open Innovation for this blog and here is what she had to say:
1. Can you tell us a little about your background and about the Innovation Leadership Forum¬†
The Innovation Leadership Forum is the umbrella under which I conduct all my activities: anything to do with understanding and enabling innovation, primarily in large organizations. This includes teaching, writing, working with companies, and running a networking initiative. While I have been thinking and working around innovation for the past 16 years, the current networking group has been running since 2004 – though it built on a networking initiative, the Innovation Exchange, I ran for 5 years on behalf of London Business School. We started with 4 companies in 2004 and are now up to 17 subscribed members, some more are currently considering to join us. I would talk a lot more about this wonderful group – but I think the real interest here is around Open innovation. Those who’d like to find out more can always email me or have a look at the website.
2. What would you say are the main benefits of engaging in Open Innovation?
I always say that innovation happens when you connect previously unconnected bodies of knowledge. For me, that is what open innovation is about. It is also about allowing people with different perspectives and different backgrounds to take a look at our issues, problems, opportunities with a different set of glasses, a set of glasses that we would never put on. The way the human brain works means that we organize things in boxes, and not only that, we tend to stick new things into existing boxes, often ignoring the fact that they don’t really fit… This is one of the barriers innovation comes up against. By opening up to the outside world, and inviting others to look at issues through different glasses we might come up with entirely different solutions.
That was a rather long answer to your question; the short one would be: the main benefit of open innovation is that it allows us to access a large group of people with diverse backgrounds and ways of thinking, which is key to innovation.¬†
There are other benefits, for example, working with external partners on an idea makes it more difficult for it to be killed; it would plainly be too public and embarrassing; especially with radical innovation this can be a considerable benefit.
Another is that all organizations have to manage their resources carefully. Tapping into outsiders can provide a useful additional resource. However, I believe that at some point in the future this may raise interesting questions about what organizations actually stand for – that becomes a rather philosophical discussion…
3. In what ways is Open Innovation different from earlier models of collaboration?¬†
I think that most other forms of collaboration are about problem solving – rather than uncovering opportunities. In more traditional forms it seems to be the case that we identify a problem and then start to look for the right partner who can help us solve it. Open innovation is different; we are looking for external parties to help us uncover new areas of opportunity that we can, perhaps jointly, pursue.¬†
Implicit in the above is that we have to have a different mindset if we want to engage in open innovation. Here all the arguments about believing that we have all the talent inside our own organization, that we know best what our customer wants etc. come into play.
4. What steps would you advise an organization interested in engaging in Open Innovation to take?
Talk to some organizations who are doing it. but be careful, what is right for one organization is not necessarily the right approach for another. You need to understand your organization’s culture; you need to know which aspects would support open innovation and which aspects would get in the way. You need to work with both.¬†
You should also think about what the areas are where you are willing to share, where you are truly willing to open up. True collaboration only works if there are benefits for both parties, and both parties share openly and honestly. If it is one-sided – as much of traditional subcontracting and outsourcing is – it will not work.¬†
This also means that you need to think about what you can do to help develop trust and respect between the collaborating parties. Given that they might come from quite different perspectives, with different values and mindsets, you are in trouble otherwise (the prejudices we have against those who are different from us can be quite a powerful obstacle).¬†¬†
5. What are the critical components you need for successful Open Innovation?¬†
In a way I have already mentioned it above:
- A willingness to share
- Trust and respect between both parties
- A win-win situation
- Structures and processes that enable and support open innovation, and provide a solid link back into the organization
¬†6. Specifically in terms of Breakthrough Innovation, why can an Open Innovation approach help?¬†
This comes back to my first point. We all suffer from what is called so wonderfully ‚ÄėBetriebsblindheit’ in German. It basically means you cannot see the wood for the trees. We get so used to our way of thinking and doing things that, at least for most of us, it is quite difficult to still see the patterns and rules according to which we are behaving and judging. As we all know, for radical innovation we need to think ‚Äėoutside the box’. Given the way our brain works this can be rather tricky, and it can be much easier for an outsider to see an entirely different approach or solution.
¬†My thanks to Bettina for this interview. One point which comes home to me from Bettina’s answers very clearly is that fundamental to Open Innovation is a new mindset which, in itself, needs to be “open”. Sometimes, in my view, this can be the biggest obstacle to innovation of them all.
When setting out to deliver new breakthrough product offerings to your market, I have found that a key first step is to construct a picture of your current business, market and offer. By taking stock of your current situation in a multi-dimensional way you can set an innovation context¬†to help you target future opportunities in a more effective way. ¬†
When I work with my clients to create market breakthrough products, because I’m often new to their business and I need to get up to speed quickly, I run through a discussion guide covering all aspects of the innovation space available to their business in future. Of course, depending on the client business I will tailor the questions to suit but the overall structure for my interview is broadly shown in this diagram:
My first area of focus is around Business Direction, Processes and Value Model. The key areas I probe here are:
Values, Culture and Leadership:
- What principles form the basis for behaviours within the organisation and, more specifically, what are the key criteria which provide the basis for prioritisation decisions? I will probe this area by referring to specific examples from the company’s innovation history.
- Where does the key drive for innovation come from within the organisation? For example, is innovation initiated most commonly in sales, manufacturing or R&D?
- What is the attitude to risk? Is decision making based on gaining consensus or through personal accountability?
- How engaged is senior management in innovation activity?
- What type of innovation mindset does senior management have? E.g. when they say they want a “break-though” do they really mean it?
- How does the business Mission Statement relate to this innovation challenge?
¬†Business Processes, Financials, Business Model and Network:¬†
- What product development process does the company operate?
- What processes does the company follow to build its capabilities? E.g. recruitment, research, manufacturing, commercial, marketing and sales.
- What processes does the company follow to generate revenues?
- What other partners operate in the value chain and what are their financial investment and rewards?
- Who are the key partners and suppliers?
- How is the organisation funded?
- What is the attitude to capital spending and valuation of assets? I probe around tangible assets and intangible assets (e.g. IP)
My second area of focus is the Market:
- Who does the client sell their product or service to?
- Who uses the product?
- What does the market landscape look like? How does the client segment their market?
- What is the geographic scope of the current market?
- Who are the other stakeholders in the success of the product or service?
Category and brand values:
- How does the client define their market category?
- What does the client think the key considerations are for this category?
- What does the client’s brand mean to consumers or customers in the category?
- Given the current brand and category, how open to new products or services might the current consumer base be?
- How are consumers and customers using the client’s product or service? What are the key consumer or customer problems that the product solves?
- What are the underlying consumer or customer insights that form the basis for the product or service?
My final area of questioning is around the current Offering and Competitors:
Technologies, performance, value and context:
- What technologies and capabilities are key to the client’s current competitive position?
- Which areas of product or service performance are currently most important to consumers and customers?
- What is the current pricing structure?
- Are there critical considerations which might limit innovation such as surrounding infrastructure and large capital investments either by the client or their partners?
- Who is the main competitor?
- Which competitor has the best-in-class performance?
- Is there a key limitation which all products in the category suffer from?
- Is there any competitor IP or other prior art which might limit future innovation?¬†
I’ve found this discussion guide to provide a very effective foundation for innovation. Due to the broad scope of the format, it brings out a comprehensive picture of the total innovation territory. It has often sparked some very useful discussion and has even generated fresh insights for the client.1 comment
I reecently saw in a Business Week Innovation blog a post about how WL Gore & Associates¬†have set up a “Capability Center” at its Barksdale, Delaware site in order to show off it products and technologies. The new facility was opened last year and was designed with the help of design agencies Carbone Smolan, IDEO and Homsey Architects. It’s not just intended to be used as a way to sell¬†to clients. Gore’s own business model means that the company’s thousands of employees (Associates?) are widely dispersed around the site. According to in interview with Gene Castellano, Project Director for the Capability Center “Bill Gore had ideas about organizational dynamics and as he evolved his company, he tried to maintain a culture that fostered small teams.” As a result of this, employees focus on individual businesses and are scattered across many buildings with little sense of the overall corporation. So the facility is also used to “sell” ideas and technologies internally, helping employees to think about novel applications and combinations of Gore technologies. I’ve seen a very similar approach at 3M where the periodic table of 3M technologies is showcased in a dedicated technology and innovation section of the UK 3M head office in Bracknell. Very impressive it was to especially when combined with the traditional 10% innovation time rule at 3M. Anyway, here are a couple of shots of the new facility at Gore to give you a flavour.1 comment
I’ve recently picked up in a Strategy and Business Innovation blog called Christiansarker.com and on Business Week that the old chestnut of whizzy ways to measure how innovative you are has come up again. This time, however, rather than¬†a complex formula being promoted by an expensive and flashy Boston-based management consultancy, the proposal has come from good old British NESTA. They claim that the usual measures of innovativeness (is that a word?) related to R&D spend and number of patents are off the mark for financial institutions and other service based businesses (of which the UK economy has a quite a lot) and want to implement a range of measures related to training, organisational change and an industry-based “peer review in which company executives both help to define the innovation indicators and rate each other”. Hmm, well I reckon we’re all pretty innovative, don’t you agree chaps? Let’s give ourselves all a five out of five on that one.
I’m probably being hopelessly simplistic and niaive, but what’s wrong with some kind of vintage measure to assess innovation¬†– you know, % of sales from products/services launched in the last year. You might need to set up some criteria to help define the word “new”¬†but I reckon that’s a lot better than some kind of dodgy old boys club peer review. I think output measures are¬†most useful¬†when you’re trying to assess your true innovation impact, after all, if it doesn’t hit the bottom line, how can it really be innovation?No comments
At the recent FDIN conference Anneke Ammerlaan outlined a new consumer – The Cultural Creative. These consumers believe in a blend of the old and the new – old knowledge combined with the latest science and technology. They value authenticity, much as the TNS “new consumer” does, are personally demanding, value honesty and relationships and are concerned about the ecology of the world. The attitudes of these consumers are playing out in 5 trend areas:
The taste of honest products from honest producers. They emphasise origin and traditional production and see beauty in imperfection. They place more emphasis on the preparation method as a means of creating flavour
Cultural Creatives see healthy food as real food and see the two words “Natural” and “Healthy” as very closely linked.
They believe in the personal touch and a re more inclined to prepare at leaste some of their food from scratch. The belive that if they put love into their food, it will taste better and will be healthier.
For Cultural Creatives, convenience is not just about time saving but is about simplicity and ways to deliver care with fresh, natural ingredients.
They look for bands and retailers they can trust and expect them to pay a fair price for a fair product. They are interested in exploring local foods and are keen to support local producers.
A must read book to learn more about Cultural Creatives is In Defence of Food by Michael Pollen.
A lot of what Anneke shared matches my experience of modern food consumers (and not just continental¬†European ones) and gives weight to some key emerging food trends. I’ll try to get some more from Anneke over the next couple of weeks.