Just this past week, I had the opportunity to update my retirement account contribution through my employer’s plan. Included in the glossy brochure that explained all the new features and investment products available to me was a quiz. You probably know the one- it has a series of questions that assess your tolerance for riskiness in your retirement investment portfolio. I bring this up because in the 3 years that I’ve been a Program Manager at NineSigma, I’ve seen many clients and potential clients with a broad range of risk tolerances when it comes to Open Innovation (OI). Yes, many of our clients are Fortune 500 companies, and Wikipedia defines middle market companies as “those with revenues generally between USD$100 million and USD$1 billion per year.” Some of you might assume that a big company with annual revenue of $1 billion plus might have higher tolerance than a smaller company for spending money on OI, for opening up to new suppliers and development partners, or simply for participating in a process that can sometimes bring in completely unexpected results.  Do the Fortune 500 have more resources to wade through and vet potential solutions, and to engage with and fund new solution providers? Maybe, but my experience has been that it’s really a matter of comfort with the unknown that drives “success” in the application of OI in any organization- no matter what the annual revenue is.

Big companies and small can face challenges and road blocks as they try to improve processes, reduce costs, enter new markets, and drive products to market faster than their competitors.  Addressing these issues might mean that a company asks an OI intermediary like NineSigma to conduct a search for a partner with a very specific set of design/development/manufacturing capabilities, for an experts group to act as an advisory panel for a new market, for technical and business intelligence in a clearly defined technology arena, for co-development partners for a new product, for a novel technology that will improve an internal process, or for a toll manufacturer or material supplier. Bottom line is that we see needs of all types across companies of various sizes. Open Innovation intermediaries can give you access to people, technologies, and geographies that you might not be able to reach on your own, even if you do have the internal resources for an extensive scouting group. The Fortune 500 may run multiple NineSigma projects and a smaller company might run one or two a year, but the process we use, and the support we provide, is the same and applies equally well. Depending on your openness to new ways of looking at and solving challenges, OI could be a nice addition to your middle market company’s  “investment” portfolio.

Many of our clients use their corporate website to highlight strategic and tactical needs as a way to solicit solutions from the global science and innovation community.  Today, I wanted to highlight a website from a client of ours, Johnson Controls, Inc. (JCI).  Their Open Innovation website, launched in mid 2009, is interesting because although many similar websites exist within the packaged food and consumer packaged goods industries, I am not aware of any other automotive OEM or Tier One supplier doing this today.  Below is a summary of a few questions I've been bouncing off the Johnson Controls Automotive Experience team (the division behind the OI website).

Kevin:  First, can you give some background - who is Johnson Controls?

JCI:   Johnson Controls is a global leader in energy and operational efficiency for buildings, innovative interiors for vehicles and advanced vehicle power solutions.  The Automotive Experience business of Johnson Controls provides automotive seating, interiors and electronics components and systems to almost every automaker globally. Our seating products include: seat trim, foam, metals and mechanisms, as well as complete seat systems. Our interior components include: door panels; overhead systems, sun visors, overhead consoles; in addition to center and floor consoles and instrument panels. Our electronics products include integrated electronics - displays, instrument clusters, connectivity systems and body electronics; as well as electrical energy management and the HomeLink Wireless Control System.

Kevin: How do people submit solutions, and what process do you have in place to review submissions?

JCI: As with most of these websites, in order to keep the flow of information clean and to avoid disclosure of proprietary information, all submitters must have issued patents or patent applications for their technology.  To review submissions, we have established an expert review process.  Each idea submitted is available to all experts for review, but individual ideas are categorized and sent to the appropriate experts to ensure the right people are notified immediately that an idea in their area of expertise has been submitted for their review. Inventors are notified if there is interest, typically within three months.

Kevin: What technology interests are you seeking from your website?

JCI: We are particularly interested in a few key technology areas.  These include surface / thin-film technology, new cover materials, bio-polymers and natural fiber materials, advanced high strength steels and structural composite materials and the associated technologies to form and join these materials, “smart” materials, injection mold tooling technology that reduces cycle time, technologies to reduce component assembly time and cost (such as unique fastening, assembly automation and in-plant logistics), sensor and actuator technology for electronification of interior features, unique technology to achieve downsized mechanisms like recliners and adjusters, and software tools to improve predictive analysis and design optimization.  We're also always interested in solutions that can reduce product weight, costs, and/or improve environmental sustainability.

Kevin: Why is your product set a good one for Open Innovation, and what kinds of solution providers are you seeking?

JCI: Our broad product scope requires solutions from an array of technologies to create successful systems. For example, many of our products serve a structural role and are important for performance and safety.  But what are ways to weld/join different kinds of components and materials?  This is something that is being addressed in a variety of industries (not just automotive), and therefore, new approaches are always of interest. As for the types of solution providers, we are looking to this website to communicate differently with our traditional supply base, but also of significant interest is the ability to extend our network to the many academic and non-profit research institutions, as well as to inventors working in diverse technologies and other companies searching to license applicable technology.

Kevin: What kinds of results/successes are you already seeing?

JCI: We are pleased with what we’ve seen so far. The submissions have been steadily coming in, and our internal network of experts has been enjoying the experience of reviewing the ideas and connecting with the inventors who have made the submissions to our site.  More than a few submissions have been technologies that have potential for application in more than one product area.  These submissions have been particularly exciting for us.  For example, just last week we had a series of meetings with potential solution providers, and we had a particularly interesting company in for a visit to explore their technology as it might be applied to automotive seating and interiors.

Kevin: What were your biggest obstacles in getting this initiative complete, and what advice would you have for other companies considering creating an Open Innovation-focused needs website?

JCI:  As you know, Kevin, executive support of Open Innovation is important for the success of these initiatives.   Innovation is a core value for Johnson Controls, and we have had great support from our leadership team, so getting this initiative up and running was not a significant challenge. Our challenge is to make connections with the innovative people outside of our organization with whom we have not yet met.  We want every inventor with technology applicable to Johnson Controls to know that we are open to their ideas and know how to share them with us. 

As for advice for other companies, I suggest that having a robust process for reviewing the ideas once they are received is critical.  We are seeing successes, in part, because we have a system in place to ensure that, while all of our experts have access to the submissions, individual experts are specifically notified when an idea in their area of expertise is received.  The initiative can’t be successful if the review process doesn’t expose the best ideas for follow through.

Boy it's hard to stay focused today while tracking the latest live tweets from the CoDev 2010 conference and live blogs of the Apple event to launch the iPad (not to mention documenting project status reports, updating my NineSigma portal with new projects, etc.).  But actually, this hunger for new information (and how to make sense of it) is an important characteristic we look for in our own employees, and is also a driving force in the Open Innovation Champions we meet every day.  But what other skills are needed, and how can you spot your company's next Open Innovation Champion? 

First, it is important to recognize that (at least for now) 99% of the Open Innovation Champion roles are created internally by companies (so far I have seen very little movement to fill these roles externally).  This is because it is important for these OI Champions to really understand their organization, the IP requirements and preferences, and how much the organization can stretch.  Quite often, it is redefining a role that someone has been playing already informally, so filling internally makes a lot of sense. 

Critical internal experience also includes success at team building, visibility with the organization (and credibility across multiple disciplines, not just for the technical organization), exposure to corporate/business strategic goals/initiatives, and experience navigating approval and gaining buy-in to new initiatives (not to mention flexibility and adaptability).

In terms of external skills: deal facilitation experience, comfort interfacing with vendors/university partners/etc., and a passion for external collaboration.

Additionally, since OI Champions have to juggle quite a few tasks (many are in this role only part-time), excellent organization and communications skills are a must. It is critical for the Champion to be able to build, collect, and communicate best practices within the company and outside of it, and having ninja-like Excel and Powerpoint skills certainly is a plus.  

What is really quite interesting, is that although many of the OI Champions "grew up" through R&D or product development, OI Champions can really come from any role - marketing, business, operations, legal.  This reinforces how Corporate Innovation initiatives cross many different disciplines and organizations.  And as these roles continue to evolve (along with the evolution of the corporate innovation strategies), continued learning and training are essential. 

What thoughts do you have on good (or bad) characteristics for OI champions?  Feel free to comment below.

It may seem that seven years after Chesbrough’s book “Open Innovation” that posting an entry on getting started with open innovation would not be necessary. Even though there has been significant success and press regarding open innovation we still see companies that are just launching their open innovation efforts. Given this, we wanted to discuss some of the best practices in launching a successful open innovation program.

A quick disclaimer – for those of you who have been involved in large change programs, some of the following comments may be considered as “motherhood and apple pie” because they are common to any successful transformation program.

First, launching a successful open innovation program is not hard – but it does take commitment to see it through. Most all firms have practiced open innovation. They have worked with universities, suppliers or consultants on previous innovation projects. The major difference in an open innovation program is the scope of the outreach effort. In open innovation, rather that going back to the normal suspects, the firm will look broadly both globally and across industries for potential collaboration partners.

The major cultural challenge I see many times is "openness." Openness has two dimensions. The first is the firm sharing what they are trying to accomplish with the global innovation community. The second is being open to seriously evaluating what is returned from the global innovation community. We will talk about this in a future posting.

We see four key elements to a successful open innovation program. They are:

•       Leadership support

•       Scope

•       Selecting the right Needs

•       Resources

As in all change initiatives leadership is critical to success. Leadership must be behind the program answering the “why are we doing this” and providing the resources to ensure success. Leadership must be active in all facets of the program and visible to the participants. Finally, leadership must evaluate the results of the program and determine the next steps in moving forward with open innovation.

I will talk about the scope in the next post.