Further to my posts on Open Innovation “Ideagoras”, I’ve only recently seen an article from the New York Times on Innocentive. Aparently, the New York Times article was the 3rd most e-mailed article of the day. I guess I must be out of the loop because the first I heard about it was in an e-mail from Alexander Orlando of Innocentive in which he said:

According to the stats I got from engineering, 5000 new Solvers registered last week after the NYTimes article went live, between midnight on July 22 and midnight on July 27

This goes to show that Innocentive is continuing to grow at a rapid rate and the importance of good PR.

 

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 ‘Betriebsblindheit’ 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 ‘outside 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.

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A while ago I posted an article about the three leading Open Innovation marketplaces (a.k.a. Ideagoras) but in that post, I didn’t shed much light on what the process felt like from the perspective of a Solution Provider. I’ve now submitted two proposals in answer to RFPs from Nine Sigma and eventually, after quite a bit of initial interest, I have received feedback that neither proposal is suitable for their clients. I’d like to share a bit more about these proposals with you in the hope that my learning experience might be useful if you ever decide to enter the murky and strangely disconnected world of the Solution Provider.

Proposal 1: an automotive transmission lock. I teamed up with an automotive gearbox technology company and we identified a novel transmission lock design which did not seem to be present in the prior art. I prepared a detailed patent document for the transmission lock and I filed the patent with the UK patent office within three days. I filed a patent specifically because of the policy on Nine Sigma around “non-confidential disclosure” of proposals. I prepared the proposal and the outline plan with my contact at the gearbox company and he submitted the proposal to Nine Sigma in early May. In total I put in about 4 days of work and my colleague at the gearbox company did about the same. We thought we had done a good job. Then we waited and we waited and we waited. Eventually, in the second week of July my contact received an email from Nine Sigma saying that the client thought the proposal was good but they didn’t believe that the solution was suitable for them. We didn’t get any more detail on exactly what didn’t work for the client.

Proposal 2: an improved catheter system. I analysed the problem situation using TRIZ and researched the prior art. Based on this work, I identified a conceptual solution which appeared to be novel and I tracked down a company based in Cambridge, UK with the necessary expertise to produce a proof of principle demonstrator. As in the previous proposal, I prepared a detailed patent document for the improved catheter system and filed it on-line with the UK patent office. I prepared a proposal to Nine Sigma and sent it off in early June. This time, I didn’t have to wait so long. I received confirmation from Nine Sigma in the second week of July that, following an initial screening meeting with their client, excitingly, they were interested in my proposal. My excitement soon dissipated, however, as over the next two weeks I received and answered 9 increasingly incomprehensible e-mails asking about various functional aspects of my proposal, questioning if the idea was indeed unique and implying that I hadn’t applied for a patent after all. By the time Nine Sigma said that their client thought the new technology would take too long to develop and so had decided not to proceed, I was actually quite relieved.

So, where has this left me in my burgeoning career as a Solution Provider? Actually, a little more positive than you might have thought. At least I got feedback on my proposals. I’ve spoken to others who have now given up answering RFPs from Nine Sigma because of the lack of feedback. So on my experience, there’s improvement there. In terms of the communication gap which I experienced, now I know what to expect, I’ll be ready for it next time. In fact, I’ve been looking through the list of new RFPs and I’ve already lined up another couple to have a go at. Meanwhile, if I get a good search report on Proposal 2, I think it could well have legs and it may well find its way onto yet2.com.

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Recently I asked a question on Linkedin about open innovation  options for SMEs. In, particular, I focused my question on SMEs who think they have a great technology with broad potential, perhaps in mew market areas, but are struggling to grow their sales. Here’s the question I posed:

If a small company has a great technology but a small market base, what are the best options for that company to connect with bigger markets? I’ve been writing about Open Innovation in my blog http://www.cocatalyst.com/blog and one area of the market which doesn’t seem to be as well served is SMEs seeking market growth. The scenario is something like this: I’ve got a great technology with IP protection but I can’t afford the time or cost of posting this on one of the on-line marketplaces e.g. yet2.com. What options do I have?

Greg Bautz, Owner at Sales Surge LLC, answered:

If Sales is not your core competency, then seriously consider outsourcing so you can focus your time and resources on your core company values and capabilities.
When your company wants better sales results, in the start-up phase, or ready to expand to the next level of corporate growth, you need to focus your resources and attention on your core product or service and not on developing sales processes and hiring a sales team. By outsourcing this business process, your company will move at the speed of light and leverage the core competency of the sales outsourcing to Sales Surge, we already have these systems and processes in place. As an added benefit, your company is getting the benefit of access to senior sales executives, sales consultants and sales trainers that perhaps you could not afford or justify. A real synergy begins to develop as you bring these talents together.

Anil Choudhary, Group Delivery Head, ASEAN & JAPAN at Wipro Technologies said:

 I think allaince and partnership may be best way to get bigger market base. However choosing right partner and alliance is the key and finding that may not be so easy.

One option is to leverage internet but unless you are in right place at right time, these could not give desired result quickly.

You could look at participating in some industrial seminar and conferences which you think may be interested in your product. A demo and talk on the technology and product could create interest in the group and could lead to some initial traction. You could also get your idea and product communicated through ebast to participants and that will help a lot if your demo and talk has made some people interested.

Another way could be to tie-up with some bigger player on profit and cost sharing basis for initial 2-3 years timeframe. This will not help in getting much profit initially but will ensure that effort and cost spent in getting attention and customer can be reduced to a great degree. Through this big player, once you have got to the right customer and your product / technology has become little bit familiar in the market place, you could extend it on your own. In fact chances are that this partner may become your customer or provide bettr deal for continued alliance. You must however ensure that IP remains with you.

Peter Adams, Head of Group Business Systems at High Tech Electronics Global Manufacturer advised:

Firstly, seeking parternships or entrance vehicles with companies that either have your customer OR are offering something aligned to your product. an entrance vehicle would be steve jobs saying how wonderfull your ‘do hicky’ is or Oprah or some other high profile candidate

secondly, joint venture arrangements to piggy back on another product for a split to gain market access

thirdly, a test/free version to give away to capture a backend profit ( assuming you have a backend to the entry product – and you should ! )

fourth, eMarketing to create the broader demand. ie. (directly ) Articles, whitepapers,blogs, books, audio and video, social marketing etc to drive traffic to your direct presence on the net. (indirectly ) locating all the eMarketing activity related to your prodcut and adding value that links back to you – no pitching BUT value for the consumer of that feed – those who like will come looking (existing )

fithly ) targetting specific consumers – identify your core love to have as customers Prospects and then target your marketing to win them ( see David Ogilvy or Chet Holmes for the dream 100 approach )

6th ) PR. use media placement strategies to raise the profile.

ps. if you cant find time to sell it – why on earth did you make it ?

And, finally Tim Northcutt, Director, Sales – Americas at Dow Reichhold Specialty Latex LLC said:

One of the best ways we have found to get integrated quickly into a new market is to find the primary industry conference for the market, assuming one exists and connect there. Either attend the annual meeting to identify key industry players for partnership, or use the event organization to conduct an eblast introduction of your technology. The choice depends on your strategic intentions whether to choose a small development partnership versus a broad market approach. The small partnership approach requires diligence on IP ownership. Experience has suggested that development partners tend to over estimate their contributions if not clearly defined as the process unfolds. Both methods have generated positive results. If a large enough audience can be gathered, we have had success with introductory webinar events coordinated through an industry organization. Alternatively we have had success in hiring a credible, usually retired, industry executive who can immediately provide us with access to the highest levels of targeted customers. This contract employee gives us immediate credibility and access to key decision makers. Compensation is done on an hourly basis for consulting fees.
Either way, the key is quick and credible access to the right people at the right potential partner at reasonable cost. Best of luck!

So to summarise this advice, key strategies to get your technology more widely known are:

• Clarify the market area you wish to target
• Identify and attend primary industry conferences for your target market. Alternatively, link up with the organisers and get them help you promote your technology
• Partner with key players in that market, i.e. who either already deal with your target customer or offer something parallel/complementary. If these are development partners, be careful to protect your IP
• Target your prime customers and aim your promotional material at them, consider running introductory webinars or hire a credible, usually retired, indutry executive to help
• Get some sales help from people who already have the skills 

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Just got back from an excellent seminar, run by the Food and Drink Innovation Network (FDIN). Lots of interesting stuff to share in future blogs on ways to improve your targeting of Lead Users and ways to engage them more fully in your innovation process, Open Innovation, Consumer Trends and Emerging Packaging formats. Incidentally, the FDIN is a great source of information about developments in the food industry and I make sure I get regular updates.�

Some time ago I did some work to identify common traits that successful innovative companies demonstrate. I identified 5 specific areas where these companies differentiated themselves from less innovative organisations.  I found it useful to use these traits to benchmark organisations wishing to boost their innovation agenda to help identify key gaps. I thought you might like to have a look..

Here is a download presentation of these 5 traits: key-traits-of-leading-innovation-companies

Following on nicely from last week’s post on platforms for co-creation, Apple have just taken another step towards C K Prahalad’s vision of tomorrow’s innovation model. Alongside the launch of the new 3G iPhone, Apple have just snuck out a new business platform which could, in time be as big as iTunes is today. The Apple App store is a new online Apple store that will post and sell third party software applications. The plan is to split revenues between Apple and the 3rd party software developers in the ratio of 30/70. So far, hundreds of thousands of developers have downloaded iPhone’s software developer’s kit, and with predictions of hundreds of millions of iPhone users five years from now, the App store could be a very busy place indeed.

Third party software could enable the market itself to keep the innovation pipeline going. Steve Jobs says that the new iPhone is about the things consumers have been asking for, and about delivering a whole bunch of stuff they didn’t even know they wanted.

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I was recently asked to answer a few questions on the Innocentive Open Innovation blog Perspectives of Innovation. As someone who shamelessly enjoys talking about myself, I thought it would be a good use of resources if I published it on my own blog too, so here goes…

1) Tell us a little bit about your background.

Originally I trained and was educated as a Mechanical Engineer. I’ve worked in the innovation area all the way through my career starting on design and projects and gradually moving further up to the front end. For the last 21 years I’ve worked for Mars Inc. until in May this year when I left to set up my own Innovation Consultancy, CoCatalyst Limited, helping clients who need market breakthrough products to target and implement new technologies. I have recently started a blog on this topic (http://www.CoCatalyst.com/blog) and I intend to use this to promote the latest thinking in the area. In my last role at Mars my team was responsible for identifying and bringing in new technologies for the Mars Drinks business, covering a very broad scope including packaging, food science, functional ingredients, electronics and control as well as mechanical engineering. I continue to be very passionate about innovation and I have expertise in a number of key innovation tools, probably one of the most relevant to solving Innocentive challenges being TRIZ.

2) How did you come across InnoCentive?

I came across InnoCentive as a potential solution seeker at Mars. At that time the cost of entry was too high for me to pursue. From what I’ve learnt recently about InnoCentive the business model has since changed significantly. I came into closer contact with InnoCentive more recently when preparing to present to a UK Government body on Open Innovation marketplaces.

3) What kinds of Challenges are you most interested in?

I am most interested in challenges which require a significant breakthrough. I am attracted to problems which, from a TRIZ perspective, jump out at me as analogous to problems I have solved before (upwards of 150 and counting with 50+ patents to my name) or where I can clearly understand the limitation (contradiction) of the current state of the art. This helps me to get a feel for the sort of benefit I might be able to deliver if I can resolve the problem. The other factor I will consider almost immediately is do I know someone in this area who I could team up with. I have a big network with contacts in many industries. For this reason, I do not restrict myself to a specific technological field – I think the “Disciplines” menu gets in the way a bit for me although I appreciate others will find it helpful. Also, for the same reason, I would like to be able to see all the challenges in the regular weekly updates I get. Another thing that can put me off a challenge is when the seeker constrains the solution to a potentially non-optimal outcome (e.g. to specify that something new should be added to the problem rather than resolve the root problem). I’ve seen this happen a number of times on Innocentive and, in fairness, on Nine Sigma too – it bugs me when I come across this sort of solution limiting thinking.

4) You recently wrote on your blog, “I haven’t actually answered any Innocentive Challenges although I have recently seen one that I might have a go at.” Can you tell us about the Challenge you want to answer, and what piqued your interest?

I’ve had a look at a couple of the ideation challenges, one for more energy efficient air conditioning (INNOCENTIVE 6237014) because a breakthrough solution could have a big impact, another one around reducing the energy needed to fire ceramics (INNOCENTIVE 6446157) and one to do with increasing the cooling effect of clothing in hot conditions (INNOCENTIVE 6470343). This one appeals because I’m a cyclist! I guess a common theme here is they all are to do with heat transfer.

5) What do you think are the biggest opportunities for Solvers in this new era of Open Innovation?

For individual solvers I need to start my answer with a caveat: if solver’s rights can be protected through the Open Innovation processes then their biggest opportunities are in being able to bring their capabilities to the attention of big companies, in ways which can be properly mutually beneficial. For larger companies acting as solvers the opportunity is to grow the market for their technologies by making cross-industry connections.

I’ve been following a discussion across a number of blogs, where the arguement is being put that because companies find it hard to stay focused on innovation they should outsource their entire innovation pipeline. In a posting called You should outsource innovation if…  Jeffrey Phillips says:

“Too many firms have the right people, good ideas and senior management commitment, but simply cannot find the time to innovate. Obviously this suggests a misalignment of the focus and engagement of the teams and the goals of management, but there it is. I’ve worked in several firms where there is clear commitment from the top – demonstrated in people resources and in dollar resources – but innovation gets shoved aside because people can’t be pulled away from their day to day tasks.

So it’s time to consider a completely different model – if you can outsource your payroll, outsource manufacturing and other key elements of your business, why not outsource innovation?”

Am I alone in smelling a rat here? What is going on in these organisations that is stopping people from doing the innovation job, the job which, if the organisation has been aligned properly, should already be “their day to day task”? Anyway, lets put that to one side for now and explore the argument a bit further. Lets say we outsource the entire innovation pipeline as Jeffrey suggest we already do for payroll and manufacturing. What happens next? Well…the first problem that can be encoutered is the famous NIH (not invented here) reaction to innovations from outside, but maybe you can organise and reward to encourage people to bring in ideas from outside the organisation. The next issue is that every company has a unique culture, values certain elements of it’s business differently (e.g. attitude to capital investment can vary enormously), operates specific business processes and revenue generation models. In order for the organisation to remain competitive into the future, some of the elements will need to stay and some will need to change. Some of the specialist areas of the business could be critical future areas of innovation which might create exceptional, differentiated value for the customer. Also there are critical decisions with regard to the best ways to exploit emerging market trends.

For the “outsourcing” solution to stand a chance, you need to have people inside the organisation with the vision to know where the business factors (culture, financial models, values etc.) and future market conditions converge so your external innovation people can begin to have a view of where to aim. I’ve often seen external consultants coming into an organisation and being so wide of the mark that it’s painful, and not realising what drives the business mindset.

I think the whole notion of outsourcing innovation in it’s entirety is misguided. When we talk about innovation we aren’t simply thinking, in my view, about some new products to bolster up sales, we should be thinking about the future direction of the company and integrating our innovation activities into that. While it is OK, or actually good, to outsource elements of innovation, in the “connect and develop” way that, say, P&G does, the proposal to outsource all innovation activity to an outside organisation is wrong and, if it were to happen, it would constitute a serious cop-out on the part of the leadership of the business. 

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I thought it would be interesting to get some feedback on subjects for future blog posts so I asked a question on Linkedin, as you do. So far, the relevant points I’ve got are:

From Siamack Salari – “Understanding the difference between innovation and evolution. Also, unarticulated needs – where do you even begin to disentangle those from everyday life behaviour?” I’ll need to get some clarification on the innovation vs evolution point, but the second point about unarticulated needs is crystal clear and really relevant to targeted technology innovation. Expect some stuff on this.

From Reut Schwartz-Hebron: “Innovation is not just about having a great idea– it’s about implementation and buy in. I think one of the topics technology innovators need are around:
- motivating people to adopt change
- how learning is a teacher’s job (in other words what change facilitators can do to increase learning)”

I think the subject of innovation and change are very closely linked together. Often market breakthrough product implementation first of all requires a mindset shift within the organisation before the end product can be successful. More on this in later posts.

From Brian Cambell: “Why doesn’t TRIZ sell? Why does UK plc pay lip service to innovation? Why do innovation consultants ignore TRIZ?” All good questions, I reckon there should be some good posting to come on this lot. I’ve already had some good debate on the first TRIZ point in comments on my previous post on TRIZ certification.

Finally, from Ellen Domb: “Why “Technology Innovation?” I see lots of situations where it is innovation in marketing or packaging or business processes (be innovative about who the customer could be, rather than the technology of the product.) Technology innovation is a very small % of successful innovation, but it gets a lot of attention already.”

I agree with some of this, in that innovations in marketing, business process or packaging design on their own can deliver significant market impact. There is a place for this type of innovation – for example in the UK the P&G brand Ariel was positioned as an innovative 30 degree Centigrade washing powder even though the product remained unchanged. Suddenly it was very good for saving Polar Bears with nothing more than a new marketing message and packaging design.  In P&G speak, I think this is known as Commercial Innovation. However, while there is a place for this type of innovation, this blog is not that place! This blog is about creating market breakthrough products through targeted technology innovation. What do I mean by targeted? Building on insightful business strategy, combinations of new business models and deep market understanding to scope and direct a systematic process to eliminate the shortfall in today’s technology. This final bit can be done pretty well through combinations of advanced TRIZ thinking, Open Innovation and good old fashioned networking, but there is room for improvement and this is where this blog comes in. This blog is about learning how to target and deliver breakthrough innovation better, with more repeatability and greater vision. In my view this is the sort of innovation which doesn’t get the attention it deserves.