By: Henry Chesbrough / Jim Cheng / Wim Vanhaverbeke
Open innovation is widely used in large companies and we know increasingly more about how to manage this process. In contrast, we know virtually nothing about the managers and practitioners who are driving open innovation in large companies. Who are the managers operating in open innovation teams or units? What is their profile? How long do they stay in an open innovation job, and what is their tenure in the company? This report tries to answer these questions based on an investigation of open innovation managers on LinkedIn.
For this report, the researchers traced open innovation managers in leading multinational companies. The managers were responsible for open innovation in one of the selected companies for the period 2010-2012. Focusing on a specific period was necessary to obtain a reasonable estimation of the time these managers were responsible for open innovation and to understand what they do after their open innovation job. This process led to a sample of 158 managers.
Although our work is exploratory, we reached some interesting conclusions:
- Based on LinkedIn data, we find that only a small minority of the multinationals we investigated have ten or more open innovation managers. The majority have fewer than five, showing that a relatively small team can manage open innovation – even in the companies with revenues exceeding $5 billion.
- Open innovation managers have relatively long tenure in the company (an average of 15 years). A possible explanation is that open innovation managers must know the company very well to understand the business needs. Additionally, these managers must have a strong reputation and/or seniority so that their colleagues take them seriously.
- Open innovation managers stay an average of seven years in the job. This is an under- estimation, as many managers were still working in their open innovation jobs when we collected the data. Open innovation management is not a transitory job for most managers and requires long-term commitment. The longer they stay in the job, the smaller the chance that they switch to other companies.
- Open innovation is traditionally linked to R&D activities. However, we find that only 40% of open innovation managers in the sampled multinationals have an R&D background. Most managers come from other functions and divisions in the company. Open innovation management teams need people with very diverse backgrounds. This is unsurprising since companies need a variety of skills to successfully launch a new product or business. Companies such as P&G have two types open innovation teams: one is technology focused (and moves the project to a proof-of-concept stage), and the second team focuses on new business development and is composed of people with diverse, non-technical backgrounds.
- The current study focuses on what managers do after the 2010-2012 period. Remarkably, 59% are still working in open innovation in the same company, another 13% switched to another job in the company. Of the managers who left the company: 11% stayed in open innovation, and 17% worked in a different job. In short, these figures confirm: (a) most managers stay for many years in open innovation; and (b) that leaving the company reduces the likelihood that they stay in open innovation.
- The tenure and number of years in open innovation depends on whether they leave the company, or whether they stay in an open innovation job. Tenure is high in all cases (>15 years) except for managers that leave the company and have no ambition to stay in open innovation in their new job. We also find that managers who have been working a short time in open innovation tend to move to other jobs (in the same or another company). This observation shows that highly specialised (and older or senior) open innovation managers with considerable tenure and many years of service in open innovation tend to stay in open innovation jobs, while younger managers with less open innovation experience stay for between two and four years in the job, and then choose another job in the same or another company.
- When open innovation managers leave the company, two out of three change jobs: 27% become consultants and 5% work in open innovation services. Most managers find a new job in a non-competing company (44%), while 24% join a competing company.
- We found little evidence for dissemination of good practices through hiring open innovation managers from other companies: only 3% of the sampled managers worked in 2016 in another company as open innovation managers, and only half of this group worked in a competing company.
- We also find that leaving the company increases the likelihood of promotion. But this conclusion does not apply in the same way for all circumstances:o The chances of promotion are always significantly lower when managers stay in open innovation, than when they obtain a different job. This holds irrespective of whether they stay or leave the company.o When open innovation managers stay in the open innovation field, promotion is slightly more likely than for those who leave the company (29% compared to 22% for those who stay).o When open innovation managers start a different job, promotion is more likely (67%) for those who stay in the company, than for those who leave the firm (56%).
By Wim Vanhaverbeke Jim Cheng and Henry Chesbrough
About the authors
Exnovate, a Network of Excellence on Open & Collaborative Innovation, originated from the pioneering work of Prof. Dr. Wim Vanhaverbeke together with Prof. Henry Chesbrough and other domain experts. As several captains of industry, government officials and academic peers gradually learned about the topic of open innovation, they soon welcomed the idea to create a European Hub for knowledge exchange on collaborative forms of innovation. A place where OI best practices could be exchanged and where a genuine market for OI expertise would be prepared and organized for all stakeholders
Prof. Wim Vanhaverbeke is a dedicated open innovation researcher collaborating with different partners in universities and companies around the globe. Professor Vanhaverbeke established the European Innovation Forum with Henry Chesbrough in 2012. He is a frequently asked speaker at leading international conferences and an adviser for several globally operating companies.
Jim Cheng, Innovation Management Researcher at UHasselt, has worked in many aspects of banking and finance: sales, strategy, analysis, marketing, projects, operations. Jim obtained the Bachelor’s Degree of Science, Industrial and Labor Relations at Cornell University, in 2001. In 2007, he obtained a Post-Graduate (Master’s level) in China Business Studies, at Vrije Universiteit Brussel. He enjoys most intellectual challenges that come from such a fast moving industry.
Prof. Henry Chesbrough is Faculty Director of the Garwood Center for Corporate Innovation at the Haas School of Business at UC Berkeley. His research focuses on managing technology and innovation. His books on Open Innovation articulate a new paradigm for organizing and managing R&D.