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.

Operating fairly
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.

Communication
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.

Assuring Confidentiality
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.

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.

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.

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.

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.

While visiting Philips Applied Technologies last week, I had the opportunity to try out the Citizen M hotel described in a previous post. As a reminder, Citizen M sets out to create a quirky, low cost, five star hotel experience with the help of some cool technologies from Philips.

To be honest though , my own experience was a bit mixed, so here goes with the good and the bad:

Good stuff:

1. On-line booking was relatively easy once I’d got the hang of the website and you could do some cool things like individualise the look and feel of the room. I chose “party”, “cyan” and medium temperature.

2. Checking in and out was easy and I was assigned a card to use for any purchases during your stay.

3. The room itself was reasonably comfortable if not massive. OK for a one night stay. The bed was really comfy.

4. The room controller has a lot of functionality, controlling among other things lighting, alarm, TV, blinds, and music. You could set it up to get some quite cool effects. Incidentally there was a 500 euro fine if you absconded with the controller.

5. The bar was good and the whole place seemed to be pretty busy.

6. The food quality was good

7. It was quite engagingly quirky, although I’m not sure about Marvin the hotel mascot, who appears in each room

Bad stuff:

1. The toilet was curiously exposed, although you could pull the doors around it closed. It just felt a bit wierd, that’s all.

2. The sink was small and awkward to use

3. Oh dear, the shower! In order to get the water flowing, you had to close the doors but when you got inside, you had to endure 10 seconds of cold water hell until the shower got up to temperature. The shower also had a rather serious leak.

4. Although the food was of good quality, the choice was limited and to get a hot meal you had to use a microwave cooker.

5. Am I being stingy but 116 Euro for one night doesn’t seem like “low cost” to me?

Overall, I’m not sure I’ll go back for more. Certainly not until they fix the shower - it really was a maddening experience and you can almost hear the conversation about not wanting to spoil the room design with a different, more useable shower arrangement. Innovator’s Sweet Spot Verdict: Near Miss.

Heres a quick video about Philips 3D TV to give you some faint idea of how cool it is.

Other cool things being worked on are lab-on-a-chip devices, already being used to detect high alcohol or drug levels in drivers, a new Optical imaging mammography system, Near Field Comms technology to enable WiFi, low cost noise cancelling headphones, some amazing precise mechatronic systems (for use in future 22nm fab lines) and some clever ways to configure LED lighting systems.

I was really impressed by the capabilities and technologies that Philips Applied Technologies have on offer. I can imagine that when used with strong market and consumer insight, application of the technologies they have on offer could easily result in some true market breakthrough products.

From the Open Innovation perspective, the whole High Tech Campus in Eindhoven has been through something of an opening up process over the last few years and Philips is finding new ways to showcase and connect with customers through initiatives such as “Meet and Match” where technologies are demonstrated and explained and customer needs elaborated.