Here we are in 2010, some seven years after Henry Chesbrough published the book Open Innovation and we are still seeing a wide disparity in results from open innovation initiatives. In addition, there are many companies that are still trying to determine if they should even try or pilot an open innovation program. What does organizational culture have to do with the success of open innovation?

Hill and Jones defined organization culture in their book Strategic Management (Houghton Mifflin, 2001) as “the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization.”

If we break this definition down (at a very high level) and apply it to open innovation can we glean any insights?

First, let’s explore the phrase “collection of values and norms that are shared by people and groups in an organization.” If an organization has always relied on internal resources for innovation and all of the major successes have originated internally, then it will by default be hard to convince this group of people to suddenly change the way they have innovated in the past to look broadly outside of the organization for co-development partners. On the other hand, if there have been innovation successes that have originated through supplier or university partnerships in the past, then this group of people will be much more receptive to changing to be more open to new innovations that originate from outside the firm.

The phrase “control the way they interact with each other and with stakeholders outside the organization” lends insight as well. Here “interact with stakeholders outside the organization” is insightful. Many times we have seen an organization overcome the hurdle of reaching broadly outside the organization to search for new co-development partners only to hit a wall when having to assess what they find from outside the organization and build agreements for co-development and sharing of intellectual property.

One of the lessons I have learned over the years is that you cannot directly change culture. You can change individual behaviors and through this process slowly change culture. In looking at organizations that have benefited from open innovation, what I have seen is an emphasis on changing behaviors through training, rewards, recognition and managers that constantly ask – Have you looked outside? What did you find? How did you use what you found?

Over the past month the headlines have been dominated by the BP oil-spill crisis.  Unfortunately, much of this noise is filled with individuals and organizations that are leveraging the crisis as a cheap PR opportunity.  They try to force half-baked solutions on BP, and when BP does not adopt these solutions, they are accused of “coming up empty,” and “ignoring help” that is being presented to them.  The reality of this type of situation is typically more complicated than it appears, and players in the open innovation space should have the experience to recognize this. 

One of our Program Managers brought to my attention a similar story that occurred back in the early days of WWI where the English tried to use a pre-Internet form of “crowdsourcing” to quickly remedy the unexpected sinking of many ships in the English Channel by German U-Boots.  This was a new phenomenon that was causing great losses to the British fleet, yet nobody knew how to deal with the situation when it began.  So they placed ads in all major newspapers asking the public to send in ideas on how to defend against these unexpected stealth intruders, and within a short period of time they were flooded with proposals ranging from human swimmers to trained seals.  Despite the massive response, none of the outside ideas provided a viable solution to the crisis.  The practical solution ended up coming from those scientists working directly with the military, who understood all of the details and parameters of the situation.

The lesson that we can take from this story is clear.  Unsolicited solutions do not work without first coordinating with those directly responsible for the crisis.  Without a full understanding of the situation, the resources already allocated, and the actual environment of the crisis, unsolicited responses are as effective as an armchair quarterback. 

I would be interested to hear the opinions and insights of others who are involved in the open innovation space.

I was running late, and I couldn’t find my car keys.  I looked in all the usual places: top of the kitchen counter, inside my purse, refrigerator (OK, that’s not a usual place for my keys, but I was getting desperate). As the minutes ticked by, I found myself becoming more frustrated, until I knew that I wasn’t going to find the keys.

My husband, no longer able to ignore my huffing and puffing and pacing all over the house, came to my rescue.

“What’s your problem?”

“I can’t find my keys!”

“Did you look in your purse?”

(Insert silent glare here).

“Here they are”, he said as he picked them up and tossed them to me. They were, of course, right in front of me.

The moral of the story:  Sometimes, all it takes to find something is a fresh pair of eyes.

That’s how I describe my work with the NineSigma Intelligence Team. Our clients are often already the leaders and experts in their fields, so why do they come to us to find solutions? I think, in part, they come to us because we can see into their space without any bias or preconceived ideas. We look at the information we compile with a fresh perspective that allows us to extract meaning that they might not recognize on their own. In other words, we are the fresh pair of eyes that can find things whether they are deeply buried, or hidden in plain sight.

When we talk about culture in Open Innovation, we are usually referring to the openness and receptivity of the organization to collaborative development with external parties.  But what about the old-fashioned culture issues of overcoming country and language barriers?  You might be thinking “That is so last century!  With the internet, there are no global boundaries.”

The speed and ease of today’s communication technology – email, video conferencing, and cell phones –create an efficient global communication infrastructure that was barely imaginable even 30 years ago.   But if we could erase the human element of business collaboration, why are airplanes still full of business travelers?

While your meetings may look like a United Nations convention, your Open Innovation partner might be more firmly rooted in their national culture.  I won’t bore you with all the standard business advice based on cultural stereotypes.  However, if you are aware of cultural tendencies that impact the dynamics of your Open Innovation partnerships, you can avoid pitfalls and surprises.

Each of these cultural partnership dynamics impact the success of Open Innovation collaborations

How the group makes decisions

·        Does your partner share their decision making process

·        Does the group require consensus before a decision can be made

·        Is there a designated “speaker”

·        Do participants defer to a senior figure

·        Are decisions made in the conference room or at dinner

·        Do individuals say one thing in the “official” meetings and something different in casual settings

How the partnership is structured

·        Long term commitment with open outcomes demonstrates value in relationship-based collaborations

·        Short timeframe with multiple “escape” performance clauses reflects a transactional preference

·        Is the partner offering a team or an individual

·        Are payments requested in advance of delivery or after performance

·        Are IP issues of high importance and handled formally through lawyers or are they loosely defined, with a “wait and see” attitude

Borders and Language: An issue or non-issue?

·        How is travel and on-site visitation viewed

·        Is the delivery or collaboration structured to be “virtual” or on-site

·        Is communication primarily written or verbal

·        Is there a team member who is acting as “speaker” who may also be the translator

·        Are emails in eloquent English while verbal communication is challenging

I admit, I have had some lingering questions in the past year or so about the role of Twitter in a comprehensive B2B marketing strategy. I've even questioned what Twitter can do for me personally - is it information? is it entertainment? And then I had a sort of social media epiphany as colleagues were gearing up for the Front End of Innovation US conference yesterday in Boston. I was really wishing I was there as I had worked with our President, Matthew Heim, and our panelists from clients Hallmark, Philips Consumer Lifestyle and Sealed Air over the past couple months to prepare for the event. I knew that FEI had invited people to live blog and Tweet from the event, but when I finally tuned in I was impressed. This was real content that made me feel (almost) like I was there. Here are some of the key takeaways I learned through the Twitter coverage:

• Hallmark's Esselman: once "open innovation" mindset was formalized, existing suppliers became extremely competitive

• Philips' Graham Mott: continuous innovation must be driven from top down, but the challenge is keeping champions' enthusiasm up

• Hallmark wants to create an emotionally-connected world and they see consumers defining emotional connections

• Blaine Childress [Sealed Air] talking about how IP personnel inside AND outside the organization have fears - lose my job versus lose my idea

• Tom Esselman [Hallmark]- Crisp definition of needs to commercialize open innovations makes open innovation more likely to be faster

• Graham Mott talking about how stating challenge too broadly will make it hard to sort through the submissions and evaluate them

And at the end of the day there was a great FEI blog post capturing the key learnings from the NineSigma panel session. Now, I know that live blogging and Tweeting is not unique to FEI and that plenty of other events do this. However, the quality of reporting and integration between the different media helped me see the light; that when executed properly, social media can involve you in a physical event in a way that traditional media cannot. I am a believer (well...I am getting there).

Contact us today to find out how our open innovation experts can help you.