Open Innovation: co-creation, and intrapreneurship
Nicholas Ind is Associate Professor at the Oslo School of Management and a partner in Equilibrium Consulting. Previously he ran Icon Medialab’s brand consultancy arm in Sweden. Before he joined Icon, Nicholas had his own branding consultancy in the UK, was a director of a design group and was an account director in an advertising agency. Nicholas is the author of 11 books.
He just published a book with Holger J. Schmidt: Co-creating Brands: Brand management from a co-creation perspective, which includes a foreword by Venkat Ramaswamy and contributions from twenty co-creators.
He shares with us his thoughts on open innovation, brands co-creation, and intrapreneurship.
1) You’ve just released a great book “Co-creating brands”, could you explain why brand design has changed, and why it leads to a new paradigm for brand management?
The traditional way of thinking about brands was very much a managerial view, where managers controlled the presentation of the brand. However, as the internet has enabled customers and other stakeholders to participate in defining what a brand is, so managerial control has diminished. This isn’t to say that managers have no influence – they still set the direction of the brand – but what we see from our research is that managers need to listen, learn together with stakeholders and adapt the brand. So, the notion of a brand has to move from fixed to fluid. And that in turn, requires a new sort of management philosophy.
2) Could you share a few steps to set-up and manage a co-creative brand management system in this new era?
In one-way brands are simply co-created. That is the new reality. They are the result of networks of interactions. But it is also the case that companies can be more or less active in the process. They can sit back and watch co-creation happen or they can create tools and processes that encourage the active, creative and social process that is co-creation.
In the book, we put forward a model that consists of three elements:
- The first is ‘generating and understanding brand-related insights’. This might seem an obvious element, in that brand managers have always done this, but the point we stress here is the need to dig deep into stakeholders’ needs and feelings through such methods as ethnography and netnography (there’s a very engaging section in the book by Robert Kozinets, who invented this form of online ethnography);
- The second element is ‘co-creating brand equity’ which means the need to involve partners and customers in making a brand relevant and appealing;
- The third element is ‘designing and adjusting brand strategy’, which indicates this need to set a path to the future but also to adjust it as you learn.
3) Co-creation is closely linked to open innovation: how would you balance between freedom and structure when adopting an open innovation approach? Keeping the open innovation entity distant or close to the corporation center?
This balance between freedom and structure is really interesting when it comes to open innovation. You cannot have freedom without structure, but I think that organizations often give so much emphasis to structure and order, that they diminish the opportunity for innovation.
In these cases, it is better that those responsible for open innovation escape the constraints of the corporate culture and have some distance from the corporate centre which would otherwise stifle ideas.
For those organizations that provide a greater degree of freedom and have cultures that are more committed to innovation, it’s better to be integrated into the centre, so that open innovation becomes a core part of the business.
4) Could you illustrate with a few companies?
I think the French electricity transmission system operator, RTE is a good example of an organization, where their Open Studio benefits from distance. RTE is an organization that seems very structured, but it also has to adapt to a new world, where energy provision is being democratized. It’s quite hard to connect with that when you are inside the walls of the corporation. So, sensibly, RTE’s Open Studio works from start-up spaces rather than the centre, which allows them to learn about new practices directly by working together with smaller companies. They then carry that knowledge back inside the organization through a network of ‘corsairs’ – a word I really like with its roots in state sponsored piracy. The role of the corsairs is to influence the practice of the headquarters through bringing the outside world in.
As a contrast, you could look at the German software company SAP and its use of Co-Innovation Labs (COIL), which are located in the company’s offices. SAP is already committed to innovation and working together with partner organizations, so there is less to be gained from making the Labs stand-alone. Also, the work of COIL is tightly knitted into the needs of business units, so there is value in being co-located.
5) Intrapreneurship is open innovation within the company as some Orange employees define it! I’ve just completed a book about intrapreneurship, “The Intrapreneurs’ Factory’, a practical guide for corporate managers and intrapreneurs, which takes you through 10 shrewd steps to nail a program for intrapreneurs, and let you discover over 20 exemplary intrapreneurs stories. What is your view on intrapreneurship, how do you analyze this growing trend?
Many congratulations on the book. One of your arguments is that successful intrapreneurship needs the structure of a supportive framework. It seems to me that is what Orange has put in place, but lots of organizations that we have researched don’t have that. I think that many companies work with a dominantly transactional style of management. They seek to control. Yet, employees mostly want to make a real contribution and to exercise their creativity – and that needs a transformational style of management, that supports and nurtures people.
As you note, companies such as 3M and Google (and another company I have researched, Intuit) give employees free time to develop their own ideas – and they benefit in terms of innovation. Adidas also supports the physical and intellectual development of its employees at its head office through great sporting facilities and an open approach to learning. My view is that probably your employees want to do great things; to be intrapreneurs. And the organization should not get in the way of that, but rather support it.
Why is intrapreneurship growing in importance? I think it’s both because employees increasingly demand it – and if companies don’t provide the opportunity, then people will leave and start their own business. That’s rather a waste of intellectual capital. It’s also because as the need for agility and speed increases, companies can’t centrally mandate innovation. Rather like co-creation, innovation needs to be fluid and adaptive. Intrapreneurship requires the company to provide direction but to have a light hand on the tiller. As the Spinoza inspired quote in your book from Epigo says ‘allow everyone to connect with his power to act.’
6) How do you connect intrapreneurship with your work on “Co-creating brands”? Is this a device that can help this co-creation?
Before I started working with co-creation, my main focus as a practitioner and researcher was on Internal Branding – in other words how you engage employees to use the idea of the brand as a spur to innovation. The idea of co-creation was always there in that work, because the central plank of my approach was to encourage participation in defining and delivering brands.
I think what has changed is that the boundaries of the organization have become much more permeable. Now brands are built through participation and good ideas come from all sorts of different places. So, I think there is a very natural connection between intrapreneurship and co-creation in that being a successful intrapreneur requires connectivity with partners, customers and other employees and a willingness to learn together. However, the ability to generate ideas is only part of the story – importantly, intrepreneurship is also concerned with taking those ideas and realizing them to deliver innovation.