LG and Open Innovation
Key Insights from their work with Small Companies
by Stefan Lindegaard
In this interview, Chris Ryu, Open Innovation Manager at LG shares insights and experiences on how LG innovate with small companies. You can find more information on LG´s open innovation efforts on their Collaborate and Innovate portal.
How well informed do you find small companies to be about open innovation?
From my experiences, they’re not informed with the term, “open innovation”, but I find that they understand and appreciate big companies’ open innovation initiatives. And for them, developing internally is not an option, so they must find right partners to work with to launch their product/solutions.
What have been your key learnings in working with small companies on open innovation projects?
A key learning is that unless a large majority of employees at your company understand and practice true open innovation, you need to have dedicated teams to drive open innovation activities, and coordinate collaborations between you and small companies.
Small companies don’t have the resources to find the right contact in big companies and as a result they often end up continuing to negotiate with people who have a closed innovation mindset.
What advice would you give small companies that want to innovate with big companies?
The most important thing is to find the right contact. You have to find the right people on both the working- and management-level.
People at big companies tend to get busy with other stuff, so you need to make sure to keep contacting and updating them about your current status and issues.
It takes a lot of resources, but when you try to solve issues, it is always better to meet in person. Often, exchanging emails send the wrong messages to people. This is especially true for non-native English speakers.
It might also be a good idea to use local agency that understands culture and language if you’re introducing your technologies to overseas companies.
Often, people from many small companies who deal with big companies are not good at managing relationship between companies. These coordinators need to excel at building relationships, keeping constant communications, negotiations, culture, language, etc.
How can big companies improve their ways of innovating together with small companies?
The only way to improve is to have a strong commitment from the top managements and a strong open innovation team that drives the corporate culture.
What are the benefits of innovating with small companies?
Big companies cannot develop everything by themselves. Also big companies can’t specialize in many areas.
Are you capable of detecting early signs of danger / promise when you engage with small companies? If so, what are they?
I tend to be careful when they are very stubborn and thus hard to work with. I also pay attention when they have very poor presentation skills and when I cannot see the clear value in their technologies/services.
What are the key elements needed to create win-win situations?
You need very clear and frequent communication. This is extremely important and a face-to-face meeting always helps.
It is a good idea to have a mediator who can coordinate collaboration between big companies’ labs and small companies.
We need to remember that negotiation is not about “we win and you lose”, but about coming up with creative thinking to solve conflicts.
Small companies often have limited legal resources. What can they do to get better deals and protect their intellectual property?
They should sign an NDA if you have to discuss about confidential information and they should always thoroughly read the agreements even if they are under pressure from big companies to review faster.
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