One of the challenges I still see in open innovation is when it is tried in a highly conservative environment, typically an ‘old school’ engineering company.  By ‘old school’  I mean a company  that is used to doing everything the same way they have for years and years. They use external development partners such as universities and suppliers but they always first try to solve problems internally and then only if that fails will they go to a network of external partners. But typically this external network is the same groups they have relied on in the past which results in the same answers they’ve already received.

We recently wrapped up an open innovation pilot at a client who readily admits they are conservative. They were very impressed with the breadth of the potential partners we presented to them on the different projects we ran. They talked about how we “opened their eyes” on one particular project and uncovered work on the topic they were not aware of. They talked about how open innovation is an excellent way to connect with thought leaders from around the world. Another researcher talked about how the process of creating the NineSigma RFP really made them sharpen their thinking around the problem definition.

However, when the discussion turned to whether they saw open innovation as a fit to their current innovation strategy, they felt that it would be quite a while before they could adopt open innovation beyond the few projects in the pilot.

The challenge was culture. Even though they clearly saw the benefits of open innovation, they could not see how to change the culture. It is interesting that some seven years after the book “Open Innovation” was published that companies will still revert back to their old ways.

I would be interested in your thoughts and observations on the cultural aspect of open innovation adoption?

I often see people struggling to understand the difference between Crowdsourcing and Open Innovation (OI).  Are they the same or completely different?  Is one a sub-set of the other?  Well, the unpopular, yet correct answer is “it depends.”  While Crowdsourcing is, by definition, different than OI, the two disciplines can, in fact, overlap.  Let me try to explain.  Crowdsourcing is a process by which an organization leverages the power of crowds (either a captive community or the general public) to help identify trends, or to source new concepts, ideas or designs for the marketing and development of new products and services.  Open Innovation, on the other hand, is the process of going outside an organization’s physical boundaries to identify and/or acquire new innovations, which can be in the form of a concept, expertise, intellectual property (i.e., technology), or a new supply source. 

Using the fishing metaphor, think of Crowdsourcing as a broad net, where the net (or challenge) is cast out to a larger population of loyal customers, targeted communities or the general public.  The person casting the net is interested in identifying trends and ideas coming directly from a large population (at least much larger than can be achieved by a typical consumer insight study).  OI, on the other hand, uses a fishing pole approach to target a very specific community that can solve an existing innovation problem – one that cannot necessarily be resolved by the organization seeking the solution.  For innovation needs that are more conceptual, Crowdsourcing can be used to find a solution.  However, as the seeker’s needs become more specific, other techniques, such as NineSigma’s RFP (request for proposal) method have proven time and again to be much more effective – especially when the seeker has access to a broad network of potential solution providers to whom the RFP or challenge can be sent.

It is important to know which approach to use and when to use it.   As companies begin to rely more heavily on OI and Crowdsourcing to resolve innovation issues and to support broad-reaching marketing efforts, picking the right approach can make a world of difference in terms of efficiency and overall success. 

Want to learn more about crowdsourcing? Contact us today to find out how our open innovation experts can help you.

It’s difficult to chart a path forward if you don’t fully understand your starting point. After years of working with companies at all levels of open innovation maturity, we have developed an open innovation diagnostic tool, the NineSigma OI Scorecard, which helps Solution Seekers quickly assess their open innovation capabilities. The web-based tool provides an initial evaluation of a company’s ability to collaborate as part of their innovation process, both with internal and external partners. The tool also assesses the organizational structure and systems that are needed to effectively support collaborative innovation.

Specifically, the open innovation tool measures a company’s ability to collaborate on innovation in three tiers: within and across the company, with the company’s existing external network, and with the global innovation community. What’s different about this tool is that it not only provides a snapshot of the company’s current status, it offers concrete recommendations for how to address the gaps identified while building on the company’s strengths. The scorecard survey takes about 5-7 minutes to complete and is free of charge. We encourage Solution Seekers to check out this new tool and gain a deeper insight into effective collaborative innovation. 

Read more about NineSigma's new OI Scorecard tool. Get your open innovation score today.

Developing and then measuring the benefits from an OI program can be a challenging exercise. We have coined the term Benefits Case to differentiate this from a more formal Return-On-Investment (ROI) analysis. The Benefits Case has financial elements, but also has “softer” measures as well.

Benefit cases all have the core elements of:

•          Quantifying major improvement opportunities

•          Ensuring that OI resources are allocated to the areas of highest leverage

•          Establishing the range of benefits to be achieved through OI implementation activities

•          Providing the basis for assessing the OI return and tracking benefits during the OI program implementation

•          Developing the rational basis for an OI program

Overall the OI Benefits Case identifies areas of opportunity and quantifies the improvement potential as a result of OI activities. The figure at the bottom of this post shows the components of a OI Benefits Case.

The OI Benefits Case will have both Measureable and Non-Measureable components. Measureable benefits may include revenue projections from new products and services as a result of OI activities, increased revenue impact from improved manufacturing operations due to OI projects, reduced costs due to improvements in speed-to-innovation or time-to-market, increased innovation productivity and other potential measureable impacts. Non-financial impacts may include increased customer satisfaction due to enhanced product features or improvement in product quality as a result of OI project impact.

Non-measurable benefit impacts include clearer roles & responsibilities, the impact of external knowledge gained through OI on decision making, enhanced innovation skills, improved leveraging of internal knowledge and other “soft” or non-quantifiable measures.

In addition to the positive financial benefits, we must subtract the cost side of an OI program. The cost side will include both internal personnel costs and external costs such as training, OI consultants, OI project costs and technology costs. This then provides the top left quadrant of the Benefits Case which is the OI program breakeven point and anticipated return.

The development of a Benefits Case at the start of an OI program provides both guidance in terms of areas of focus and a tool to use during the implementation of the OI program to guide the implementation team. One of the challenges in OI programs is the eagerness to jump right to a ROI, when in fact the full financial impact of an OI program can take significant time to develop due to time-to-market consideration in product development and launch. This is why capturing some of the “soft” benefits and then tracking these as leading indicators can be very valuable to both guide the implementation team and to assure senior management that progress is being made.

Indicators such as early stage innovation portfolio impact from OI, number of projects with a significant OI component, decisions impacted as a result of external knowledge gained through OI activities are all leading indicators of the future ROI as the result of either revenue or cost impacts to the business.

Just recently, Stefan Lindegaard released his new book, The Open Innovation Revolution.  I just finished reading it, and must say that I am glad to finally see such a practical and applicable piece of work hit the bookstore shelves.  Stefan took a non-academic approach, and loaded the book with real-life stories and quotes from those actually in the open innovation trenches, living and breathing this stuff.  And since he spent time talking with those in the trenches he was able to shed light on something that has been all too often ignored – the soft side.  By soft side, I am referring to the human element.  You know – the effects of change on culture, the importance of communication, human roadblocks, and the like.  Why am I so passionate about the soft side of open innovation?  It’s simple – I have seen too many companies try open innovation without paying attention to these things, only to end up abandoning their OI efforts without reaching their end goals. 

Another great point brought out in the book was the importance of finding the right open innovation champions and ‘intrapreneurs’.  These people are not your typical R&D managers.  Rather, they need to possess a unique set of skills ranging from diverse technical competencies to keen networking skills.  They are the face of a company’s open innovation effort and will need to represent this function both internally and externally.  These people are bridge builders, spanning the proverbial gap between marketing and R&D, and working across various business units to educate people and to entice them to use open innovation where and when it is most likely to demonstrate success.  With each success, this person communicates the results and continues to build momentum behind the cause.

These are key concepts addressed in The Open Innovation Revolution that should be strongly considered by every company embarking on a new open innovation journey.  The book gets right to the heart of what really matters, and should be read by anyone in the planning phase of open innovation, or anyone looking for ways to improve an already existing program.

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

As Anne Morrow Lindbergh was quoted as saying, “Good communication is as stimulating as black coffee, and just as hard to sleep after.”

We are seeing just this type of communication on Open Innovation. Our clients typically have formal internal communication processes that include company newsletters, websites, cross-business meetings and the like. Open Innovation is fast becoming a topic of choice as companies strive to educate and inform their employees on the impact and potential of Open Innovation. Companies are more openly talking about successes they’ve experienced and the challenges they’ve faced as they work at embedding Open Innovation across the enterprise.  

A long-time client, 3M, recently used Open Innovation in its ‘cover story’ for the company’s internal newspaper. The article discussed 3M’s pursuit of a new platform technology:  “The incubator lab team collaborated with [Robert] Finocchiaro to initiate a global technology search. Together, they enlisted NineSigma, an open innovation service provider, to solicit solutions from researchers worldwide. ‘We got more than 40 responses,” [Rick] Neby noted, and one was from a company based in Switzerland that was coating 1.15 refractive index materials for improving ink reception on inkjet paper. Their material had some very desirable optical properties that could ultimately affect products in several divisions.’” The article went on to describe how the company’s incubator lab was sparking new innovation in ways they didn’t think possible.

Siemens recently referenced their Open Innovation work in the company’s magazine, Pictures of the Future. “Siemens is making use of OI methods in research as well. When faced with particularly tricky problems, Siemens researchers sometimes turn to “e-brokers,” who team up with external problem-solvers. In such cases, developers publicly describe their problem on an e-broker website, such as NineSigma or yet2com, and offer a cash reward for the best solution. And that solution can come from a large IT company in India or from an amateur developer in Germany. Approximately half of the problems are successfully solved in this way. So it’s not surprising that large companies like BASF, Novartis, and Nestlé are likewise using this method of finding solutions.”

Open Innovation will continue to be a hot topic within our client organizations, particularly as OI leaders are able to share big wins and lessons learned through the process.  This will further stimulate creativity among employees and help to get them thinking about the infinite possibilities Open Innovation can create for even the most sophisticated companies.

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

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.

In our last post we discussed identifying and selecting Needs for an open innovation pilot program. In this post we will discuss the next step of engaging with potential solution providers that may have an answer to the Need.

Many organizations refer to this step as a "make versus buy" decision. This implies that there are only two options for solving the Need - either develop internally or find and use an external partner. In reality, there are three options - internal, internal/external and external. By external, I mean either license technology that exists or co-develop. We see many of our clients pursue the internal/external path where they are working on the issue internally at the same time they are searching externally for someone who has either solved the problem or is farther along or on a different, more compelling solution path.

The other process that is undertaken at this point is determining the solution network. For large, global organizations the first step may be to communicate the Need broadly within the organization to see if there is a solution available internally. We are currently working with a large multi-national chemical industry client to create a structure / process to communicate needs internally in order to leverage their globally distributed R&D resources. Once the internal search for a solution is exhausted then the search becomes focused on external resources. Now the decision becomes one of "do I use my existing networks or do I use a firm like NineSigma to communicate the Need broadly?" Again, here the answer is not yes / no, but what factors such as timing, cost, degree of technical challenge and others may play in the decision making. Many times for incremental technology development an existing supplier may be the obvious choice. Or there may be considerations for funding university work such as "community relations" that drive the decision.

Looking broadly, across industries to the global innovation community has one significant advantage and that is the opportunity to find an "unobvious" solution to the problem. In our work in over 1,600 open innovation projects, we have seen many unobvious solutions. Semiconductor research applied to fabric care, candy dispensing applied to appliances, agriculture sensor systems applied to automobiles and many others. In addition to the opportunity to find an unobvious solution, reaching broadly to the global innovation community will bring back considerable information that the project team can use. This external information combined with internal knowledge will help with decision making and ultimately reduce project risk.

Back to getting started with open innovation. We would recommend evaluating the Needs that were the highest priority and selecting some of these to communicate to the global innovation community. There are a number of firms today that can help with this. Evaluate them and select a partner. When looking for a potential partner a couple of key points to evaluate are:
- level of support provided to the OI project team
- breadth of network and is it a passive or pro-active approach to finding solution providers
- how is IP handled
- experience and references
- others

In the next post we will discuss what happens once you have connected with the global innovation community and have initial the results back.

In just the past 25 years or so, new technologies like that for automated DNA sequencing have enabled us to begin to understand the language that encodes our biological lives. This is the language of the genome- in which our genes are sentences made up of DNA letters and words that are used as molecular instructions to each of our cells. What proteins should be made to build a heart muscle? What enzymes should be produced to control our blood sugar? What building blocks are needed to make new connections in our brains so that we remember what we’ve learned? Our current knowledge and understanding of the human genome is made possible by technological advances that scientists use to detect, measure, analyze, and compile new information obtained through experimentation in the field of molecular biology. We know what many of our genes are for; we also know some of what happens if a gene has a mistake in it, or is damaged. Such mutations can lead to innocuous individual variations, to inherited conditions, or to diseases like cancer, among others. It is this knowledge about specific genes that has allowed genetic tests to be developed that can predict the likelihood that you may develop certain diseases, like breast cancer.

On a broader level, complete genomes have been recorded from several individuals so that we know exactly what DNA sequences describe these people. The cost of compiling this information has ranged from $2.7 billion for the first one in 2003 to $1,500 today, according to Wired magazine’s online article, and is predicted to go even lower. As far as I can tell, even these numbers don’t take into account the time and cost of all the technological innovations required to enable researchers to do the work! But the idea that every one of us could soon have our own genome “read” so that we can learn more about our sensitivity to certain drugs, or about how effective our medications are likely to be, is the subject of new fields called pharmacogenetics and pharmacogenomics- perhaps better known as personalized medicine. These new fields address how your genes control the way you respond to certain drugs, and why different people (with genetic variations) will respond to a certain drug in different ways.

New technologies are going to be required to allow us to personalize our healthcare to adapt to our individual genetic variations. Inexpensive genome sequencers are in the works, and at NineSigma, I’ve seen an incredible variety of new medical devices and diagnostic technologies presented in response to challenges we’ve posted on behalf of global clients.  What is especially exciting for me, and something that NineSigma prides itself on, is that we often find a technology from one area that may be relevant to a completely different industry. Advances in personalized medicine, while valuable and even essential for human health and well-being, might be applicable in other sectors. A tiny genetic lab-on-a-chip might be useful for an individual’s medical diagnosis, but may also be useful to detect microbial contamination in an industrial setting.  As personalized medicine moves forward, this is an exciting time to be part of the innovation world!

For more information about how open innovation can assist with new product development, contact us today.