Making Open Innovation Work
In the excitement to begin open innovation efforts, it is possible to overlook important groundwork that should be done that will help assure that things go smoothly over time.
This includes reaching agreement on goals and defining the desired outcome so that everyone is confident that the relationship will produce a win/win that is acceptable to both parties.
It also includes establishing boundaries, such as deciding up front how any disagreements will be settled as well as being very clear on what the expectations are as far as the resources that will be expected to be devoted to the project from both sides. This latter point is particularly important to protect the smaller partner since they are in the more precarious position regarding the expenditure of staff time and financial resources.
Chris Thoen, former managing director of the Global Open Innovation office at P&G, provided some excellent guidance on this subject in a presentation on “Surviving, and Thriving, in an Open Innovation Future.” While he hit a number of areas, his main message was to be the partner you’re looking for. Here’s how he said to go about doing that:
- It’s about actions. But it starts with a mindset that needs to infuse the culture.
- Celebrate your partners. They should come back, tell others.
- Don’t think in terms of one-off deals.
- Unless win-win is the mentality, there are no wins in the long run.
- Grow the total pie versus growing your piece of the pie.
- Connect partners. Connect suppliers.
- Be up front; be transparent.
This is all important, Chris said, because of what he calls Weedman’s law of partnership, which states that the second deal with the same partner takes about half the time and creates double the value.
Jan Bosch, a former vice president of Open Innovation at Intuit, provided additional good advice for the readers in a previous blog post on how to act in the early stages of building relationships. Here’s what he wrote:
- Set expectations up front. We try to be very clear about what potential partners can expect in order to avoid the “false positives” mode. For instance, for entrepreneur day, we promise a yes/no response within 48 hours after the event. A yes means that we explore the possibility of running a customer trial with the potential partner. We explicitly communicate that even after a successful trial, we still maintain the right to not proceed with that partner, etc.
- Avoid confidentiality and IP issues in the early stages. All events and initial contacts are explicitly in “the public domain.” No NDAs are signed; no promises are made. The goal of initial contacts is to create enough interest from our end to get into deeper discussions that may take place under NDA.
- Facilitate the building of a community where external innovators may even decide to get together and partner with each other, rather than with us. We’ve had at least one and probably more cases of where this happened. We are delighted about this and feel it’s an important success factor.
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
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