Open Innovation Lessons From P & G

As you start the evolutionary process of adopting open innovation to your organization, always remember that open innovation is just a tool, not a goal. The goal is to grow your company and make a profit. Some companies might also have the goal of changing the world to a better place.

Understand that open innovation is only a piece of an overall innovation strategy. To begin, look for opportunities to develop overall open innovation capabilities out of the pockets of open innovation you may already have in your company in areas such as key partnerships, supply/value chain, and selected employees with the right mindset and toolbox.

In my Leadership+Innovation community on LinkedIn, Chris Thoen, a R&D director at P&G, started a spirited discussion by asking which elements are needed to create an open innovation culture. The community suggested that open innovation requires these elements:

• People who can manage relationships with customers and partners. This requires agile and flexible people who have the “soft” skills of emotional intelligence – fundamental social skills such as self-awareness, self-fulfillment, and empathy – in addition to traditional intelligence skills.
• Willingness to accept that not all the smart people work for your company or even in your department, and a corresponding willingness to find and work with smart people both inside and outside the company.
• Willingness to help employees build the knowledge and understanding of how an idea or technology becomes a profitable business, perhaps by developing a job rotation program that could even engage partners and customers.
• Understanding that failures represent opportunities to learn, and a willingness to reward those efforts and that way of learning. Failure is a fact of life for companies that pursue innovation seriously, and a leader’s response has a huge effect on company culture and therefore on future projects.
• Dismiss NIH (Not Invented Here). If we make the best use of internal and external ideas, we will win. We don’t need to own everything ourselves and keep it under tight wraps. We should profit from others’ use of our innovation process, and we should buy others’ intellectual property whenever it advances our own business model.
• Willingness to strive for balance between internal and external R&D. External R&D can create significant value; internal R&D is needed to claim some portion of that value.
• Willingness to be a risk taker rather than being risk averse, while using common sense to balance the risk level.
• Accept that open innovation does raise intellectual property issues. Your legal team can either choose to play offense or defense. Hopefully, they’ll adopt a constructive approach that supports progress toward the company’s business development goals.
• Understand that open innovation requires open communication. Work around the confidentiality and intellectual property rights issues to create an environment build on trust.
• No need to always be first. Building a better business model is better than getting to market first.

Finally, recognize that it is no longer enough to just be a good project manager, researcher or engineer or leader. As you will learn in this book, open innovation not only requires a different mindset, but also requires new skills that include:

• Networking. Open innovation is all about networking, so the ability to build a networking culture is an essential role of an innovation leader as companies move more toward open innovation.
• X-vision. If you want to create significant innovation, you must be able to work across business functions and with many types of innovation to turn ideas into profitable products, services, or business methods. I call this X-vision. This is actually more of a mindset rather than a skill, but it’s extremely important to develop.
• Managing stakeholders. You do not need to have everyone on your side, but you need to generate adequate support to champion your ideas and enough leverage to overcome major hurdles.
• Making an effective elevator pitch. You need to be able to craft compelling messages to the stakeholders you want to influence.

It would be great to hear your comments on this.

Stefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation.