By: Martin Duval
Over the last 5 years, Open Innovation has been evolving quite a lot in the ways it can be defined and implemented. Rather than proposing one more definition or describe one specific way to approach it, here is a set of trends I foresee based on the numbers of projects I have been involved in and the evolution of needs from organizations, would they be major corporations, SMEs or Public Services.
I will provide some examples and key success factors for most of these identified trend. As an introduction and an element of context, have a look at the Figure 1 below which describes a vision of the open innovation ecosystem and dynamics.
1. Merged and more convergent in-house versus external projects
External collaboration platforms will build gateways or even merge with internal idea management platforms, allowing for external ideas to be included in in-house current Stage & Gate processes and for outside communities to test ideas that originated internally.
AtelierSFR.fr, the French Telecom operator platform for customer/user beta testers, relies on test ideas generated by in-house Marketing & Innovation teams to be tested by external communities of users and customers.
The first step is here to have an internal ‘innovation community,’ which interacts using a platform (software, events, etc.), and a group of external partners (clients, startups, developers, researchers, students, suppliers, and other large companies or small business), which is moderated and can be called upon to propose ideas or offer feedback.
2. Co-creation process using hybrid online/offline methods
Co-creation methods will rely on complementary online and offline components to elicit new concepts for services and products even more quickly and efficiently, and with a broader scope.
Some key success factors to implement such a balanced mix include:
- Devoting as much effort to profiling and selecting Contributors/ Innovators as to working on actual ideas/content, via both online platforms and offline workshops
- Distributing and scheduling the phases of competition and co-creation appropriately
- Organizing online activities and offline participation to complement one another
3. Emergence of meta-challenges and contests
More and more external idea contests will be jointly organized by groups of non-competitor companies hoping to increase the impact of their contest while sharing the risks and related costs with their partners.
For instance, the emergence of Open Data has resulted in more and more contests for developers to create innovative applications. These have had some degree of success, both in eliciting original ideas upstream and in actually generating new services downstream. In France, the DataConnexions initiative by Etalab (data.gouv.fr) aims to provide a basic foundation for its member partners to jointly organize and schedule events.
Such an approach is about choosing one or more suitable partners to help organize, run, and co-brand the contest/challenge. Also about pooling the partners’ contributions and resources to various aspects of the contest, including communication, the ideation and selection process, and target communities. And finally about keeping intellectual property secure by keeping the right collaborative spirit all along while maintaining the agility required for the process.
4. Clearer selection of contributors and incentives for idea management processes
Key contributors will need to be selected at the beginning of an idea management process to avoid monopolizing all participants through the final selection process. Likewise, rewards and incentives will need to be selected and defined more thoughtfully as well as to be awarded in relation to the level of contribution delivered by the participants.
As more companies are expanding their use of both external crowdsourcing and internal contests, the agreement of mutual trust between the party organizing using the method (to find new ideas) and the contributor (who devotes time and energy to developing and proposing ideas and plans) is rarely clearly defined.
Some ways to avoid this issue may be to:
- Not put all potential contributors to work needlessly if they lack the qualifications to contribute to later phases of the process.
- Evaluate how much effort to ask of participants at various steps in the process, using contributor profiling to maintain an effective group dynamics and leadership
- Structure the incentives/rewards for both internal and external contributors, remembering not to underestimate the value of feedback loops within the process, taking advantage of existing levers and adding reusable elements
5. More digital tools and platforms to choose from
A tool is nothing without facilitation for sharing ideas and content online.
Corporate Social Networks and other idea management solutions will be launched within R&D and Innovation departments and beyond, promoting collaboration and the exchange of best practices between researchers, employees, and external partners. These software platforms will take advantage of new features like gamification. But let’s not underestimate the day-to-day support these platforms require: remember to build in innovation community management from the very beginning of the project (setting guidelines, launching, supervising). This is crucial. A tool is nothing without facilitation for sharing ideas and content online.
6. Open Data and Open API initiatives
Many Open Data and Open API (Application Programming Interfaces) projects will be launched, offering fresh prospects for innovation arising from the ecosystem of citizens, developers, and entrepreneurs.
It is about determining whether it’s better to create your own unique iPhone or Android application (for €50k to 100K), or to stimulate a community of developers to invent tens or hundreds of applications and adapt them for all the mobile platforms, tablets, PCs, and TVs on the market using your data. And do not underestimate the fact that companies are often sitting on a gold mine of untapped data with massive potential benefits for all types of partners.
Initiatives such as the Open Data project data.sncf.com from SNCF in France who grew a community of more than 400 developers in few months or the blueVia program by Telefonica in Spain to promote its Open APIs are showing the way.
7. Looking at new ways to manage intellectual property
More corporations are designing and launching partnership programs with startups and innovative entrepreneurs: the first step of a relationship between a large company and a startup or small business is to postpone the negotiations about intellectual property as late as possible in the partnership process to remain as agile as possible and preserve the positive collaboration spirit required to overcome the known and unknown obstacles on the journey to co-creation.
Following the P&G example, Unilever has launched an open innovation portal to identify partners that can help the group solve problems.
It is important to be aware that it is possible to write partnership protocols for the upstream phases of a relationship with a business partner that allow for creating mock-ups/prototypes, conducting a client test, developing a Business Plan, organizing a series of key meetings,participating in a co-creation workshop, etc. – without having to immediately begin intellectual property negotiations.
Involving the Procurement and Legal departments as early as possible in the process is also a key factor for a successful partnership.
8. New and hybrid forms of structure and processes to partner with startups
Companies will invent new forms of structures, processes, and partnership programs to work with innovative startups/small businesses, combining the established approaches of Corporate Ventures, Incubators, and partnership programs. They will need to determine which style of cooperation best fits their own corporate culture.
The SUEZ Environnement group and worldwide leader in Water & Waste Management has created Blue Orange, an entity that considers itself both an investment fund and a project incubator.
In terms of best practices to define and implement such a structure, it is better not to create a corporate investment fund that focuses solely on financial ROI, which would not succeed in building a true operational collaboration between the startups it funds and the business lines/entities within its backing company. Unfortunately, there are far too many examples of this common mistake, but solutions do exist.
9. As the notion of ‘core business’ fades away, stronger cross industry collaboration emerges
It is crucial that major companies and institutions learn to excel in initiating and implementing complex collaborations that address such sweeping issues as accelerating technologies, sustainable development, and globalization.
The very concept of Open Innovation implies disruptive innovations that likely come from a field or sector outside the company’s ‘core business’
With all the challenges they face, companies have an even more urgent need for innovation, at a time when there is pressure on the resources and budgets of different stakeholders, taken individually within their sector or vertical.
To overcome some of these challenges, major groups and institutions will need to learn to initiate and implement complex, multi-partner, large-scale collaborative projects. One example is Smart City, which brings together players from transportation, energy, architecture, telecommunications, and other sectors.
Quickly delivering a few Success Stories will keep the project on a positive note over the long term.
In that context, it becomes about considering a potential partner’s ‘partnership profile’ (major group, startup, etc.) and level of motivation to form a partnership, rather than approaching potential partners based solely on their industry positioning or current products. Quickly delivering a few Success Stories will keep the project on a positive note over the long term. Using pilot phases, testing / prototyping / mock-ups as much as possible to make certain key steps concrete and cultivating an approach based on ‘Try often / Fail Fast’ should also be considered as key success factors.
10. Selecting and implementing innovation KPIs and estimating the ROI generated by innovation
Because of the crisis, companies are under more pressure to select the right KPIs (Key Performance Indicators) manage innovation and to assess and measure the ROI (Return On Investment) generated by their R&D projects, collaborations, and all their investments in innovation.
There is no single, identical way to define these indicators and the ROI from innovation; naturally, the best approach depends on the sector and also the corporate culture. An example of indicator is the percentage of products/services in the current year catalogue that did not appear there 5/3/2 years ago.
It is important also not to look solely at the R&D budget when calculating the ROI: other factors to be considered include the collaborative platforms for developing the reflex of working together and sharing best practices, training, the organization of contests/challenges, and the implementation of Intrapreneurship programs. Also measuring the organization’s effectiveness at ‘killing’ ideas and projects, which allows it to learn from its mistakes and reallocate resources (which are always scarce) to high-potential projects is key.
As a conclusion, there are of course many other trends and one I am especially interested in at the moment is the convergence between Open Innovation and Social Responsibility.
About the Author
Martin Duval, CEO of bluenove, a consulting firm specialized in Open Innovation he founded in 2008.From 2001 in Telecom at Orange, he headed different management positions in innovation and business development. In 2000, he opened the Swedish fund Speed Ventures in France. He also spent 3 years in Consulting at Cambridge Technology Partners. He started in the aerospace industry at Eurocopter (EADS) first based in Dallas and later in charge of Scandinavia.