Combining Internal and External Innovation

Interview – Stefan Lindegaard

I had the opportunity to interview Stefan Lindegaard, author of “The Open Innovation Revolution” recently.

Here is text of the interview:

1. Why is open innovation so important for organizations?

Open innovation is about combining internal and external resources and to act on the opportunities this creates. More and more companies prove this to be a strong value proposition and companies cannot afford to lose out on the opportunities created by this combination.

It is one thing is to lose out on opportunities and yet another to lose out to competitors from doing nothing. Open innovation has the ability to create long term advantages in management or organizational innovation rather than just product or service innovation.

It takes several years for an organization to reap the full benefits of open innovation. A positive side effect of this is that once a company gets ahead of the competitors and becomes the preferred partner of choice within their industry, this often turns out to be a longer term advantage. It is hard for competitors to copy and thus neutralize the benefits that open innovation leadership can bring.

2. When it comes to innovation, what is the biggest challenge that you see organizations facing?

It has to be about the executives and their ability and willingness to develop a truly innovative organization – or more so their lack thereof. There are still too many executives that either just don’t get innovation or even worse talk: they talk the talk, but don’t walk the walk. This makes is very difficult for innovation people to do their jobs.

3. Why do many companies not actively engage in open innovation?

Companies engage in open innovation either because they are visionary leaders that can see the benefits in this new paradigm shift or because they feel pressured by the competition to do so. Not many companies are natural leaders and since it takes a few years for open innovation to take effect, we have not yet seen the real impact of open innovation in most industries.

4. Just how important to an organization’s success is attracting the right partners?

It is important, but I would advice companies to clean up their own house first before they bring in the guests. The better a company handles their internal innovation processes, the more they can benefit from engaging with external partners.

Furthermore, if a company has a good internal innovation process that is also capable of integrating external partners, they will over time be able to attract better partners. The reason is that stakeholders in any given ecosystem communicate extensively and it will thus spread quickly if a company works well with external partners – or not.

5. What is the most important culture change for organizations to make in order to support open innovation?

They need to understand that a stronger focus on external contributions is not a sign of disapproval of the work being done by the internal resources. It is merely an attempt to increase overall innovation productivity. It is also important that the organization embraces a more holistic approach to innovation in the sense that all business functions should be involved in the innovation process. Innovation is more than just products and technology, and it should not be driven entirely by the R&D function.

6. What are some of the biggest barriers to innovation that you’ve seen in organizations?

As mentioned earlier, executives are the biggest barrier to innovation. This ties in to another one which is the lack of an innovation strategy that is aligned with the overall corporate strategy. Then, we can also talk about the lack of a more holistic approach to innovation.

7. What skills do you believe that managers need to acquire to succeed in an innovation-led organization?

They need a more holistic approach to innovation, they need to become much better at networking and they need to become better at communicating their projects as well as their messages. This ties into stakeholder management – internally as well as externally. Interestingly enough, these skills are quite easy to develop and thus are low hanging fruits that organizations can quickly reap.

8. If you were to change one thing about our educational system to better prepare students to contribute in the innovation workforce of tomorrow, what would it be?

I would look into how the future workforce can become better at learning from failures. We fail more often than we succeed when it comes to innovation and yet we do not manage to extract much learning out of these failures. I believe such a learning capability can lead to better innovation processes as we will be able to develop new perspectives to our challenges faster.

You’ll find our book review of Stefan Lindegaard’s book “The Open Innovation Revolution” here.

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Braden 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.