Open Innovation From A Practitioner's Perspective


More on Confidentiality and Intellectual Property Rights (IPR)

As an update to an earlier post on this same topic, I want to focus on several ideas to properly manage IPR in an open innovation/crowdsourcing context.

First, I’ll repeat what I think it important for everyone to understand: not every single challenge or idea, whether it comes from R&D or marketing or product development, is a candidate for an open innovation/crowdsourcing approach. This is where every organization needs to start – with a determination of what is and is not fair game to share externally. In my experience I have seen that even after a company sets aside those challenges or projects that are considered too sensitive to share externally, there is a still a lot of information to work with.

Secondly, and really the focus of this post, is to consider a critical skill everyone needs to develop to be successful: framing the question properly. Too often I’ve seen companies focus on problem-solving and not problem-framing. I’ve been told by many senior managers that a properly framed question can be 70-80% of the work in getting the answer they are looking for.

How can questions be framed properly:

* make sure to breakdown the question into smaller ‘pieces’; this allows for a more focused effort on the part of potential soution providers and it also helps mask the problem (a few pixels won’t give you the whole picture)

* remove all industry or corporate jargon (helps to hide the potential application or market opportunity)

* clearly define solution criteria (this helps somewhat in managing confidentiality but also it’s jsut a good practice in general)

In summary, spend more time thinking about the real problem you are trying to solve and not only will you improve your chances of success but you will also improve your control of what information you disclose (and the risk associated with that disclosure).


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Mapping Innovation Clusters (McKinsey Report)

So McKinsey released a report on innovation clusters. You can find their interactive map here:

My biggest problem is that this map is created based solely on patent data: total number of patents, patent growth, diversity of patents. This is one of the most over-used metrics possible! As some may have expected,  Silicon Valley stood out as the leader of the pack. I happen to live in Silicon Valley and do believe it is one of the most innovative regions of the world. But not because of patents. It’s because of the tolerance for failure, the diversity of of it’s labor force, the world class universities, the presence of a dynamic investment community, and probably one hundred other reasons.

I believe in the value of protecting ones ideas, but I also value even more those companies that are willing to SHARE their know-how. It can be done. By some estimates, up to 80% of filed patents are never commercialized. So by definition that makes Silicon Valley the LEAST productive region in the world!! And we all know that is simply not true.

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Open Innovation, Confidentiality, and Intellectual Property Rights

Often when I give presentations on open innovation and network-centric innovation the issue of confidentiality and protection of intellectual property comes up. The message I get from companies around the world is that they are concerned about the level of increased transparency and openness required.

I have heard the same issues many times, including:

* If I identify a need on my corporate website or through a third party platform, will this signal to my competition the importance of that particular problem?

* How can I share enough information about what I am looking for without giving away my secrets?

* Can I trust the person (or entity) on the other end of the transaction?

* How can I prevent my competition from learning about what I’m doing?

There are many ways to answer these concerns, starting with the fact that open innovation requires (actually it demands) that the corporate culture needs to change. Companies must recognize that they do not have all the answers, that they need to embrace ‘proudly found elsewhere’ as opposed to the ‘not invented here’ syndrome that plagues many organizations. In addition, think of open innovation as a dial that you gradually turn as you become more comfortable with this new approach. Many successful companies start by breaking down internal walls and silos, by opening up the innovation process to all parts of the organization. And finally, companies need to realize that not all of what they do is a good candidate for sharing externally. But in my experience there is plenty that can be shared externally without creating unnecessary risk. Risk-taking is required as well, it needs to be managed and without risk there will be no reward.

I personally have seen many companies successfully navigate this issue. And those companies will always be ahead of the pack.

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