Open Innovation From A Practitioner's Perspective

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Six Ideas To Drive Culture Change In Innovation

Ask any innovation consultant or innovation employee within a company and they’ll both agree that long-lasting success in new models for innovation boils down to one key issue: changing the corporate culture to embrace these new approaches.Without culture change you will not achieve long-term success. You may have an occasional win here and there, or an occasional breakthrough may occur but this is not the same as a sustainable, permanent change in your “business model” for innovation.

 

 

 

With than in mind, we did an informal survey of recommendations from several sources, added some of our own ideas, and compiled our list of top six recommendations:

1) Build Collaboration into Your Employee Evaluation System (source: Business Week and 3M)

 

From the BW article: “Reward employees not just for developing an innovative technology, idea, or process, but for spreading it. No company reaps the benefits of collaboration if their employees or managers are hoarding innovation in order to look good at the next quarterly meeting.”



2) Create Innovation Funds (source: Business Week and 3M)

As stated in the article, “Managers focused on core-related projects often don’t want to spend money exploring or developing innovative ideas. To overcome this common roadblock, companies should create an alternative source—3M calls these Genesis Grants—that employees can go to for funding of innovation projects that don’t fit neatly into existing departments.”


3) Innovation Events need to be part of an Overall Strategy

While contests and prize-based challenges can be important elements of an innovation strategy, these should not be your only focus. Look for ways to develop ongoing innovation activities such as allowing employees to dedicate a certain % of their time to unstructured thought and creative thinking. All innovation activities must be conducted in the context of an ongoing innovation strategy.


4) Encourage Risk Taking

While this is nothing new, what is needed are fresh approaches to encourage risk taking. One idea is to have employees share failures internally in order to learn from (and accept) unsuccessful projects. This can go a long way to developing a culture that encourages (and does not punish) risk-taking. Intel calls their approach Failing Forward.

5) Look Inside the Company First

Too often companies rush to drive external innovation without first considering whether they have fully exhausted all internal sources. Turning your innovation strategy inward (as a starting point) will not only ensure you have uncovered all possible internal sources of innovation but it helps companies practice the necessary skills that will serve them well when they go external – skills such as framing the right question, learning to collaborate, and driving transparency in the organization.

6) Top Management Must Show Support

Senior leadership must not only talk the talk, but they need to walk it too. And how can they walk it? By developing and communicating a clear strategy on what steps they are going to take to support new approaches to innovation. They could start with steps 1-5 outlined here.

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Innovation is Alive and Well in Colombia

I’m a native of Bogota, Colombia but have spent the vast majority of my life in the US.  I always thank my mom and dad for keeping the culture (and language) alive while growing up in Baltimore, Maryland. I owe so much to them!

I’ve always bragged about Colombia’s excellent exports (coffee, flowers, music, dancing) while constantly enduring the still-lingering negative image that Colombia has in the states (I’m sick of the Pablo Escobar and cocaine jokes – no mas!!).

During my time spent in Boston (2001- 2006) I came across many talented, well-educated Colombians who were living there and pursuing undergraduate and graduate degrees at what it seemed like every university in the area. These new friendships gave me a great opportunity to visit my home country and I was able to do so several times. I hadn’t been there since the early ’80s and it was a great experience to reacquaint myself with that great country and it’s people.

And I saw many excellent examples of innovation in the civic and social sectors. The two that come to mind are the Transmillenio (here and here) and Ciclovia. I currently live in San Francisco and the SF Sunday Streets Program was directly inspired by Colombia. I can think of a few US cities (Houston, LA) that should adopt the Transmillenio model for public transportation.

Fast forward to August of this year and I found myself again in Colombia, this time in Medellin (for the first time) and as a member of the University of San Francisco School of Business – Silicon Valley Immersion Program. We were conducting a series of workshops with CREAME, a Medellin-based organization that is nurturing the entrepreneur and investor community in Medellin.

In our workshop we ran a series of lectures (and one class project) focused on growing your startup, business model innovation, open innovation and managing confidentiality / IP. I can’t put into words how impressed I was with the quality of entrepreneurs, consultants and investors that I met. I learned as much from them as they (hopefully) learned from us. We gave them almost three days of intense lectures culminating in a project where groups of 6-7 students worked with real entrepreneurs with real startups and were asked to provide them with strategies on open innovation, confidentiality / IP, marketing your startup (Crossing the Chasm) and we even had them propose a new business model for each startup! The entrepreneurs were very appreciative of the quality of advice they received and the students really demonstrated a strong understanding of what was taught. I also came across a great blog written by one of the students.

I also met several people working at EAFIT University, a major university in Medellin which has a great innovation program led by Jorge Mesa.

One tip should you ever visit Colombia: be sure to enjoy the wonderful food, the great people and the incredible Juan Valdez Coffee (just remember – they don’t do coffee to go in Colombia, you need to sit down and enjoy it on the spot!):

Thank you to everyone I met and I look forward to my return trip!

Filed under: general, leaders, Uncategorized

What Went Wrong With The Crowdsourced Ideas For BP Oil Spill?

BP has received a lot of criticism for failing to respond adequately (or in a timely manner) to the thousands of ideas that it received, both solicited and unsolicited. If they (BP) would have followed a few key elements of open innovation and crowdsourcing, perhaps this would have had a better result. As of this post, I am aware that BP is currently reviewing the submissions and hopefully they’ll glean something of value to prevent future disasters of this scale.

Where did they go wrong?

1) Asking the Question: Trying to present a single solution that addressed all of the challenges facing BP is like trying to cure cancer with one experiment. What BP should have done is break the challenge down into various key categories (containment, recovery, clean up, etc) and posed a series of requests in each category. That would have directed the crowd to focus on one area or another.

2) Collaboration: To my knowledge, both the solicited and unsolicited ideas were brought forward by individuals and/or companies, with no ability to see each others ideas and build or improve them. A more collaborative process would have gone a long way to improve the quality of ideas and perhaps even reduce the total number of ideas (since people would find other ideas to build on before entering their own).

3) Filters: clearly with this number of ideas you need filters. Again, with a truly crowdsourced and collaborative process the crowd can act as a filter. Not sure how BP is filtering / analyzing the ideas submitted but I’m pretty sure that at this point the crowd isn’t involved.

Perhaps one thing they did achieve (not by design, I might add) was diversity. It looked like they were getting ideas from all over the world and from a diverse group of participants. What a wasted opportunity.

Lastly, perhaps there is a chance for BP to open up these submissions to the global community and see if they can salvage some ideas to prevent this from happening again in the future. I’m sure there are a few diamonds in that pile of information.

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Principles of Open Innovation

The new innovation paradigm requires a dramatic shift in the attitude of companies and individuals towards innovation. As discussed earlier, this shift in attitude is no longer an option for many industries.  The forces of change that come with globalization and more demanding customers are here to stay.  For many companies it is now a matter of survival.  Yet this new landscape also brings great opportunity, at a level never before imagined.  As you prepare yourself and your company, keep in mind the following seven guiding principles:

  1. Develop More Transparency[1] – starting with your own company, look for ways to share information and build trust with all of your employees and be sure to demand the same from them.  Make your organization as flat (and non-hierarchical) as possible. With your outside world of customers and partners, look for opportunities to open up or share information beyond the basic transactional exchange of information.  Intuit holds an annual Entrepreneur Day where they invite customers to spend a day with Intuit senior management in an open idea exchange.[2]
  2. Engage with networks – we live in a highly networked society and the employees (and customers) of tomorrow will have spent their entire lives in this networked world.  Be aware of the value of these networks and encourage your employees to actively participate in professional networks, blogs, and other social media.  There is a wealth of useful (and often) free information that is available.
  3. Embrace community – by definition, most successful networks have a sense of community or shared purpose.  This implies a certain set of norms and expected behavior for members of a specific community.  Interestingly enough, these communities can offer a great deal of insight and value to its members.  On LinkedIn alone there are over 3000 innovation-related groups.
  4. Competitors can be collaborators – this may seem a little unusual to some, but this new world of innovation should force you to rethink what defines a competitor and ways in which you can work together.  If you sell office productivity software, for example, are you competing against other software providers or is your bigger obstacle customer indifference towards your product?  P&G, for example, licensed a core plastic film technology to Clorox, a staunch competitor in certain markets, because P&G was no longer in the plastic film business.  This would have been unimaginable fifteen years ago.  Small companies can cooperate at certain levels to create entire eco-systems around new technology that can help raise the market opportunity for all involved.  Twitter is a good example of a recent innovation in social media that has spawned an entire ecosystem of new services, all benefiting one another.
  5. Discourage the “Not Invented Here” syndrome – nothing kills an idea faster than the belief that your company has all the answers and no possible expertise exists outside your company’s four walls. Time and again we have seen success stories that completely debunk this theory.  No single entity, regardless of size or scope, can legitimately claim to know all the experts in a given area. “Proudly found elsewhere” is a commonly used term to describe the new mindset you need to adopt.
  6. Engage with failure – failure is a reality and a necessary part of the innovation process. Failure today takes on a different context when you consider that one person’s failure is another’s success.  Use failure as an opportunity to re-frame the question or seek completely new sources of solutions.  Failure sometimes is the result of asking the wrong question or focusing your efforts in the wrong area.
  7. Get into the habit of maintaining a “memory” bank of successes/failures – the company should document all successes and failures to understand why something worked and why something else didn’t work. There may be opportunities in the future to bring those failures back to life.

[1] Transparency is defined here as: “Making the optimum level of disclosure for your partner to have all the information necessary.”

[2] For more information go to: http://smallbusiness.intuit.com/blog/where-small-is-going/2009/08/call-for-proposals-–-intuit-entrepreneur-day.html

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Netflix Prize Winners Announced

This is proving to be a fascinating story on open innovation/crowdsourcing and the tremendous benefits it can provide, beyond financial. Clearly it’s important to achieve the desired financial results (new sales, reduced costs, etc) but the other rewards are just as important. These include learning how to ask the question, the value of iteration, expanding your network.

Netflix has announced the winner of the first Netflix prize, which was created to improve their current recommendation engine by 10%. The process itself and what was learned along the way were as interesting as the result itself. Teams cooperated and published their algorithms, with the hope that others would come in and improve them (and they did). The original team would take the improved algorithm and make it even better. Some companies gave their employees permission to work on this during their work hours. Why? Because in the end this made them better programmers and what they learned by participating actually led to $10 million payoff (internally), according to one company.

Netflix announced a new competition with a new set of criteria, it’s also covered in the same article. Looks like they learned how to better frame the question……

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