What is the difference between a Challenge and a Grand Challenge? 

While a Challenge represents the opportunity for multiple parties to collaborate to solve a problem, a Grand Challenge is….. grander.

A Grand Challenge addresses a fundamental problem that is bigger than the need of an individual company or person.  The solution requires broad applications of expertise from multiple parties, and generally multiple industries. Many Grand Challenges also have a positive impact on society, serving an altruistic, greater good.   A Grand Challenge embodies all of the advantages of open innovation, leveraging the synergy of multiple parties collaborating to achieve a breakthrough that benefits the broader community.

For companies, Grand Challenges communicate a concise and powerful message to their entire stakeholder community.  When GE launched their Heathymagination Grand Challenge to invest $10 million in breast cancer research, they broadcast to every GE consumer that GE is committed to medical research.  At the same time, GE communicated to their investors, professional community, and supply chain that GE’s doors are open to discovering breakthrough technology.  Their traditional supply chain was essentially given notice: bring us the best, cutting edge technology or sit by the sidelines. 

A Grand Challenge energizes the investment, inventor, consumer, and technology communities because it opens large companies to the best information from any source, creating a level, competitive field for new ideas.

And the opportunity to innovate at that scale is….grand.

Open innovation is clearly taking root in just about every industry, as organizations strive to create openness in their innovation and business processes. We see companies increasing their ability to leverage internal and external solutions yet struggle with building the right processes and tools to extract maximum value from the new solutions. (See NineSigma’s new OI Scorecard Survey Report  for more information). Among the factors that can make or break an open innovation program is intellectual property. We have come to realize in working with our clients and solution providers, collaborators can  enjoy all of the benefits that open innovation has to offer only if they understand the issues associated with intellectual property (IP).

First things first: how do we define intellectual property and confidentiality in the framework of an open innovation strategy?

Intellectual property is how our legal system attaches value to ideas and concepts. Most intellectual property is protected by a patent, but that’s not always the case. Sometimes IP can be in the form of trade secrets, which can be anything from a product formula to test data.

Confidentiality is defined less vaguely. The concept often involves a confidentiality agreement (CDA) or non-disclosure agreement (NDA) in order to create a safe space in which two parties can exchange information without worrying that they’ll lose control over their trade secrets. In general, parties will limit the agreement scope specifically to what will be the most valuable to what they are working on.

In addition to understanding what IP is, it is important to understand the nuance between protecting IP and managing it. Protecting IP implies that your interests are at risk of being threatened and that pre-emptive action is needed. Managing IP, on the other hand, embraces the more nuanced perspective that the processes, documents and relationships in a collaborative environment should increase value for all parties. In understanding the role IP plays, it becomes easier to see how culture can be positively impacted by the collaborative innovation process. A more open approach to solving problems, even if they are core to the business, doesn’t need to be a daunting proposition. In the next part of this series of posts, we’ll discuss what happens once the IP issues are hurdled and you are ready to consider the preparation and discovery phases of your open innovation program.

Contact us for more information.

Co-working.  In a world of collaboration and co-creating, we now have co-working.  According to the New York Times July 17, 2011 article “Working Separately, Working Together”, freelancers and telecommuters are finding that being unshackled from the office environment is not nirvana.  Instead, it is a lonely place.   The work-at-home crowd is abandoning their corner Starbucks for membership in co-working spaces called IndyHall and Hive.  These 5000 square ft., open floor plan office spaces offer the community and collaboration that comes from a shared, non-virtual work space.  You can “rent” a cubicle (isn’t that what they were fleeing?!?) and soak in the collaborative energy of tapping keyboards and human contact.

At NineSigma, we witness this collaborative energy in our Linked Innovation programs.  Clients come together to address some of the thorniest problems, recognizing that their combined efforts can accelerate the outcome that they each seek.  One group has been working together for 6 months to address a key sustainability issue that impacts their entire industry.  Merging the perspective of nearly a dozen powerhouse corporations into a shared vision statement and action plan is no small task.  As they toiled to blend the nuances of each company’s viewpoint, I secretly admired their passion and commitment.

These companies recognize that they cannot solve the big, global challenges by “freelancing”.  Whether they are seeking new technologies to achieve their long-term sustainability goals, or finding efficient ways to meet regulatory standards that ensure consumer safety, collaboration is the accelerator.  NineSigma’s Linked Innovation program provides the “co-working” environment for them to bring together their collaborative energy into a virtual and physical place.

And like Hive and IndyHall, we even provide the coffee.

Watch what happens when you ask for volunteers to lead an innovation project.  Some individuals will wish that they were invisible while others will jump out of their seats with the enthusiasm of a first grader being offered an extra recess.  What is it that motivates people to respond in such different ways?

That is the question that NineSigma set out to answer in our partnership with Caliper.  We had often observed that a client would succeed when they had a motivated innovation champion, but they would then struggle in duplicating that success organization-wide.  After working with hundreds of clients over the past ten years, we could describe the characteristics of an innovation champion, but we did not have the organizational development expertise to answer our clients’ question “how do we create a team of people who have a passion for innovation?”

Caliper, a human resources consulting firm with 50 years of experience advising over 25,000 companies in team building, and employee and organizational development, was a perfect partner.  We found that Caliper shares many of NineSigma’s core values, like a respect for scientific methodology and an insatiable curiosity.  By combining Caliper’s expertise in human resources and personality assessment with NineSigma’s expertise in innovation, we collaborated to create the world’s first Collaborative Innovation Profile.

Caliper’s rigorous methodology started with a validation study, which included a customized innovation job analysis and development of a competency model for innovation leaders and project managers.  Caliper incorporated interview and assessment results from a sample group of Innovation professionals and implementers.  Caliper’s research team then analyzed the data to determine which traits are most associated with success within the competency model.  The result is a specialized tool that helps management and innovation professionals select and develop successful innovation teams.

Of course, the NineSigma team was eager to learn the results of our Collaborative Innovation team assessment.  No surprise to us, the results confirmed that we are a highly innovative and collaborative group.  Our partnership with Caliper is a shining example of how an open innovation company can grow through open innovation. 

With the exponential growth in Open Innovation, companies have a broad assortment of services and platforms to fill their Open Innovation toolbox.  This presents a challenge for the casual-user of OI services who sees a toolbox that looks like mine – a well-loved jumble.  The Project Owner needs to sort through to find the right “tool”, but often he doesn’t know if he needs a screwdriver or a hammer.

How does a Project Owner with a Need select the right way to engage in Open Innovation?   Start by asking questions that will help you narrow down your options.

·        Can you clearly state your Need and what you seek to accomplish?  Test this out with someone who is not familiar with the project.   If they have to ask you many clarifying questions, then you probably should not “post” your Need on an open innovation platforms, where detail is generally scant.  An open innovation process that is fully facilitated can drive better results for more complex Needs.

·        Do you know if the answer can be found inside your company?  Have you tapped into all of your company’s resources and capabilities, both inside your company and with your extended network, like suppliers or university contacts?  If you identify an external solution through open innovation, you will likely be asked this question before the external party will be engaged.

·        Is this project highly strategic and secretive?  Is there any reason you would not want your extended network to know about your outreach?  Are there IP issues that require you to create an information firewall?  In some strategic cases, you may choose to engage with partners that you know well, to protect your strategy.  In other situations, you may prefer to investigate global resources anonymously through an intermediary.  Selection of your open innovation gateway should be influenced by the specific intellectual property and confidentiality profile of the Need.

·        What is the endpoint?  Will you offer prize money for a single “answer”?  Do you seek an ongoing collaborative R&D relationship?  Do you seek to own or license IP, or must you have unrestricted access to the information?  Crowdsourcing and postings on open innovation boards may be more appropriate for lower value Needs.  If you seek partners for longer-term, high value Needs, select an open innovation vehicle that allow you to vet potential alliances according to your business and technology criteria.

By answering these questions, you will have a much clearer perspective on what you want this OI tool to deliver.  Ask your OI service provider specifically how they will perform against your stated expectations.  If they are doing their job well, they will likely be asking you these same questions.  Let NineSigma help you launch an open innovation program.  Contact us to learn more about open innovation.

What happens when you go to a meeting or a party and someone asks you what you do?  “I’m a blah-blah” is usually followed by “That’s interesting” and then there’s small talk on the subject, right?  When I respond “I help companies do Open Innovation”, what follows is ....silence.

But that may be coming to an end, because the U.S. Government is getting innovative.

I recently participated in Industry Day for Open Innovation, sponsored by the U.S. General Services Agency (GSA).  The day was kicked off by Aneesh Chopra, the U.S. CTO.  When I explain to someone what I do, (yes, it requires explanation), their response is “That is totally awesome”, if they entered the world after Heavy Metal music, and “Cool” if they can sing along to Fleetwood Mac.  But can you imagine being the CTO of the U.S. Government?  How cool is that?!?

And that is exactly my question: how cool is it that the US government is embracing “innovation”?  For those of us who believe that innovation is the way of the future, it is extraordinary.  NineSigma believes that partnering with our government creates an innovation bridge to bring technology, resources, transparency, and access to our federal system.  Current innovation and crowdsourcing efforts in the Department of Education, NASA, and the Department of Energy are just the beginning.

But if the government is doing it, can it still be “awesome”?  According to Urban Dictionary,  “cool” is “the best way to say something is neat-o, awesome, or swell” but "awesome" is “the highest rank of 'cool'”.  If the New York Times runs a weekly column on “innovation” and the U.S. government has a CTO, has “innovation” gone “mainstream”? 

I certainly hope so.

Once upon a time, a long, long time ago, before anyone had heard of “crowd sourcing”, (coined in 2006) NineSigma clients were fascinated by the opportunity to reach into every corner of the globe for answers to their biggest challenges.  The focus was on “how” and “where” to get the solution.  NineSigma solved the “how” by providing the answer to “where”.

Fast forward to 2010…companies have more information than they can process.  Chat rooms, company-sponsored websites, OI intermediaries like NineSigma…Open Innovation can feel like the suggestion box on steroids.  The real challenge today is how to manage and optimize Open Innovation.

The companies that will be the Open Innovation leaders tomorrow are those that are successful in creating their Open Innovation Office – the structure that broadcasts the right information outside to the best external resources, and then funnels the value back inside to act on it efficiently.

We believe that three pillars are essential to building a successful, sustainable Open Innovation Office. 

Framework –Vision, Process and Organizational Design, and underlying Software

Support – People and resources to:

• Develop OI best practices and build OI adoption
• Manage the Needs Funnel, relationships with external partners and integration of OI projects into the product development cycle

OI Toolbox –Partners and tools to engage internally and externally

Framed by executive commitment to your OI Strategy and program management and accountability, these three pillars build an integrated, managed and optimized Open Innovation program. Let NineSigma help you launch an open innovation program. Contact us to learn more about open innovation

An Israeli investor in the medical devices industry recently complained “Israel has too many start-ups. Israeli companies are great at taking an innovative idea through the alpha stage, but then the start-up goes under because we lack companies with the expertise to fund through beta and scale to manufacturing”.  “Aagh”, as my Jewish grandmother would say, “we should only have such problems”.

With the jobless rate for newly minted college graduates at historical highs of 7.5%, Thomas Friedman bemoans policy makers’ lack of focus on what the U.S. needs to create good jobs for the future.  “We need three things: start-ups, start-ups and more start-ups,” recommends Mr. Friedman.  

To create a dynamic economy, I question if a country needs to excel at every link in the innovation value chain.  If Adam Smith could speak to me from my Economics 101 textbook, he would ask, “Why can’t my economic theory of the “invisible hand “be applied to create a free trade approach to global innovation?”  

Here’s a free trade innovation model to consider: American industry jointly funds technology incubators that sponsor foreign-grown start-ups.  By nurturing and co-investing in early stage technologies, American companies gain two advantages.  First, they share the risk of failure (which should be high! That’s what makes these start-ups), and second, they nurture technologies that match their applications and needs.

Adam Smith could not have known in 1776 how “innovative” his theory could be in 2010…

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

     Attending the WBT conference in Dallas last week reminded me of roaming a traditional outdoor marketplace or Middle Eastern bazaar.  Unlike other conferences where deal making occurs in the shadows of learning and under the guise of “networking”, the focus of WBT is to bring together buyers and sellers.  

     The sellers are ambitious and creative inventors of intriguing technologies.  Although some are wizened pros and others are as “green” as the technologies they hawk, they all promote feverishly, convinced that the perfect investor is just one elevator pitch away. 

     The buyers look the part of the moneyed elite, surveying the marketplace with feigned disinterest.  Circles of VC guys boast about companies in their portfolios like cards in a winning poker hand.  Corporate types swagger down the aisles knowing that the Fortune 500 employer on their nametags tantalizes the inventors like designer labels to a crowd of teens.

     In our high tech world of virtual marketplaces, nothing can replace the energy of the marketplace, where buyers and sellers face-off, live and in real-time.