Open Innovation Summit – Day Two

Open Innovation Summit Workshop
by Braden Kelley

The first edition of the conference was held in Orlando, Florida at the Crowne Plaza Orlando Universal. The second annual Open Innovation Summit will be held August 11-13, 2010 in Chicago, IL.

The second day of the conference kicked off with Robert Brands. Here are some of the key takeaways from Robert and the other speakers on the second day:

Robert Brands (InnovationCoach) – Creativity x Risk Taking – There is a multiplier effect if you have the courage. Internal innovation projects need a champion to overcome corporate antibodies and those champions need to be part of other teams. Too often we forget to train our people on the basics of doing proper project management, meeting management, new product development (NPD) next practices, etc. Innovation accountability is critical. Robert Brands is right, many companies don’t effectively manage projects or meetings – lots of lost $$$ and time as a result. A survey of 100 firms found the most challenging practices in innovation to be risk-taking, accountability, and inspiration.

Stephen Shapiro (Innocentive) – The worst thing we do for innovation in organizations is hire for competency and chemistry. We need diversity in teams. Organizations have personalities too and these dictate how people work with each other in the organization. Organizational personalities tend to be action/planning focused and idea people tend to get squeezed out – hurting innovation.

Ed Rinker (Clorox) – Clorox has embedded Open Innovation teams that pursue business unit opportunities and a centralized Open Innovation team to pursue breakthru ideas. We use a lot of data and our stage gate process to better evaluate which projects to fund and which to continue. Clorox focuses open innovation efforts on Tech Brokerage, Growth Networks, and Global Stewardship. Growth Networks looks for the holes in our growth plans and focuses on external networks to try and fill the holes. Clorox cross-functional innovation teams include tech brokers, external networkers, designers, sales/mktg, market/consumer research. We make up for our disadvantage in patents to P&G and others by leveraging the IP of external partners who have more IP than P&G.

James Todhunter (Invention Machine) – People think that Open Innovation is about creating new pathways for getting ideas from outside into the organization – not so. Open Innovation is about integrating our external relationships into our internal processes and capabilities. People who are focusing on Open Innovation as idea generation are finding that the signal to noise ratio is quite high. In Open Innovation, partner relationships are often unstable and pose risks to brand equity if not managed well. Companies run into problems with innovation because they are focused on idea and don’t have good processes to support innovation. Alignment, authority, and actualization are needed for successful Open Innovation.

James Todhunter (Invention Machine) – In Open Innovation you have to be careful about a partner going and working with a competitor instead – Have you considered this risk? People need to really think about whether their innovation is coming from an idea-first approach or a needs-first approach. In a needs-first innovation approach, you can do directed-ideation. To address alignment issues, you need to engage constituencies in a needs-first innovation dialog. Open Innovation will not work without bi-directional value. Focusing Open Innovation on extracting value is doomed to failure.

James Todhunter (Invention Machine) – People that submit ideas don’t always have all of the insights and knowledge to create fully-formed, valuable ideas. Don’t ignore the power of secondary research and bring the information you have together in a cohesive way to drive innovation. Use knowledge-enabled innovation processes, research universe of knowledge, and bring in experts to help break through inertia. Don’t forget to do anticipatory failure analysis as part of your innovation process. From Ideation to Product Innovation = Ideation -> Capture -> Research -> Rank/Qualify ->Validate/Refine -> Productize.

“3 F’s of Innovation – Fit, Feasibility, Finance” – James Todhunter (Invention Machine)

“Leverage power of Innovation Intelligence Ecosystem” – James Todhunter

BONUS: Here is my video interview with James Todhunter – CTO of Invention Machine – recorded live at the Open Innovation Summit

Greg Fox (Cisco) – The back of every Cisco badge has the principles of Cisco’s culture on it. Cisco is looking at new ways to partner – both growing ecosystems and compartnering (comfortable with competing and partnering). Every market adjacency we are seeking to address requires a partner ecosystem. We will compete aggressively with orgs like Microsoft, but at same time we will collaborate with them for good of the customer. Cisco alliance approach = Evaluate -> Form -> Incubate -> Operate -> Transition -> Retire.

Greg Fox (Cisco) – Cisco is trying to move from a culture of competition to a culture of shared goals. Every organization in Cisco (including councils) has a Vision-> Strategy -> Execution captured and communicated. Out of 1,000 potential acquisitions identified, Cisco contacts about 100, does due diligence on about 30, and closes about 9 deals. Cisco has a well-defined acquisition strategy – focus on similar core values, people, technology, and where effective integration is possible. Cisco has alliance extranets to link with partners and share joint business and marketing plans.

On the second Intellectual Property (IP) panel, they spoke about how there is no standardization amongst university tech transfer offices – Some have to get governor approval. Another big problem companies have in working with universities is that they act as if they have an innovation, but no, they usually only have an invention, and they tend to price an invention as if it were an innovation. Many universities make crazy demands in selling IP – sometimes even IP that hasn’t issued a single patent yet.

Most university tech transfer offices want to sell the next Gatorade – they need to focus on hitting singles and doubles instead. University tech transfer offices often don’t take into account all of the work it will take to commercialize an invention’s IP. People who are interested in tech transfer office rankings should check out “Innovation U” – you can Bing it. University of Wisconsin-Madison is an innovator in tech transfer. Eugene Buff made an audience comment that most university tech transfer offices are more focused on faculty retention than on revenue. Carrington Smith says Air Products focuses on university professors in starting their IP licensing process – not on tech transfer offices.

“When world is flat, you don’t have to emigrate to innovate” – John Tao (Weyerhauser)

John Tao (Weyerhauser) – Drew a distinction between baseline, trending, control, diagnostic and planning measures
results & in-process metrics. Weyerhaeuser also has innovation metrics on leadership & culture. Their metrics for Open Innovation include the percentage of revenue derived from alliances.

Linda Beltz (Weyerhauser) – Measurements are only as good as your measurement capability, and measurement needs change over time. Early in Open Innovation maturity, the cultural measures are most important. Later the financial measures are more important.

“Open innovation is not about outsourcing.” – John Tao (Weyerhauser)

Stephen Hoover (Xerox) – It took a decade for Xerox to further develop Chester Carlson and Battelle’s IP into the successful product that gained traction. Innovation and Open Innovation are leaky funnels and that’s okay because you can’t do everything. Open Innovation efforts should start with suppliers, partners and customers, but of course don’t ignore other innovation sources. Xerox focuses on dreaming with our customers – “What if you could print on magnets?” – Now we sell paper shaped magnets for fridges.

Stephen Hoover (Xerox) – We look at customer empathy (latent needs), trend analysis, market surveys, focus groups and non-customer analysis for innovation. Xerox created a CTO-led Open Innovation Council with P&G. We’re finding value with P&G that we didn’t initially anticipate in the original agreement. He showed partner example with XMPie and Multi-Media personalized Imaging – very cool stuff. Next step is to take personalized imaging to digital – personalized web page linked on a DM piece – 5-10x response improvement.

Stephen Hoover (Xerox) – Too many organizations don’t instument to test (or to educate or to market) in the online environment – Don’t forget this! Open Innovation helps to share the risk – We only invest in 1 in 10 reasonable ideas. Nothing wrong with collaborating with competitors on foundational research at universities – shared risk – government pays attention. When we go to the state and universities with our competitors saying that a research area is important – we get their attention. Faculty members will get the rest of the system to follow along with what they want to do so.

Stephen Hoover (Xerox) – Xerox is really pushing services innovation research because services is the fastest growing part of the economy. Almost every company has outsourcing partners – UPS or FEDX are your shipping department if nothing else. Sharing the risk by balancing financial investment versus skills investment by partnering with others. How do we respond to competitive copying? – We focus on trying to make it easier to partner with us – It’s a race to be faster!

Stephen Hoover (Xerox) – We have done our best to keep projects alive in the downturn with our partners so that we have projects in 12-24 months.

Overall it was a great conference, and it reinforced how important senior leadership support is to successful innovation, along with other things like good processes, cross-silo communications. I look forward to the August Open Innovation Summit in Chicago.

Check out the Open Innovation Summit – Day One wrapup here.

Braden KelleyBraden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

Braden Kelley

Braden Kelley is a Design Thinking, Innovation and Transformation Consultant, a popular innovation speaker and workshop leader, and helps companies use Human-Centered Change™ to beat the 70% change failure rate. He is the author of Charting Change from Palgrave Macmillan and Stoking Your Innovation Bonfire from John Wiley & Sons. Braden has been advising companies since 1996, while living and working in England, Germany, and the United States. Braden earned his MBA from top-rated London Business School. Follow him on Twitter and Linkedin.




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