The OI Scorecard Survey tool was developed in the 3^rd quarter of 2010 to help companies assess their collaborative innovation capabilities both internally and externally. We recognized that companies struggled with understanding where they were in relation to other companies using collaborative innovation, and set out to create this online too. In addition to being  interactive and easy to use, the OI Scorecard tool has provided tremendous insights into where  companies are making progress, and where they are not.

I find that one of the more interesting pieces of data from the survey highlights an issue that we have heard many times from some of our large multi-division, multi-national clients. And that is – while 62 percent of those responding rated themselves as effective in tapping into the creative brainpower of their colleagues, only 10 percent had the systems and processes in place to recognize the most promising ideas, and quickly bring them to market.

We expect to see tangible progress in the area of internal collaboration over the next few years. Even companies who lead their industry struggle to improve internal access to information and expertise. As we heard from Dick van Beelen, Director of Open Innovation, AkzoNobel, in our recent Webinar,  “If only we knew as a company what we know, or if only we use what we have - and that in itself sounds like an open door. But, if you think about a siloed organization, this is indeed a big challenge.”

There are many proofpoints collected from the survey data and articulated in the OI Scorecard Survey Report . Have you had a chance to read the report? If so, what findings did you relate to most, or what surprised you? We would like to hear your thoughts.

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?

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. 

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.

Many years ago Geoff Moore wrote a book called Crossing the Chasm. His premise was that many high-tech ventures fail to cross the chasm from early adopters to the early majority and therefore fail as viable businesses. Is there an analogy for open innovation?

Many companies have implemented open innovation organizations and programs over the last few years. Companies adopt open innovation with high expectations. They expect to find the next breakthrough technology, a new business model or an undiscovered product that they can market globally. But, there has been a wide disparity in results obtained from these efforts. Why do only some firms see a significant contribution from open innovation? Many times as the open innovation program develops and the first few open innovation projects generate results, we will see a “chasm” form as the initial results do not meet expectations.

It is at this “chasm” that many open innovation initiatives will fail or become stuck.

NineSigma sees three distinct phases in the adoption of open innovation. These are Launch, Consolidate and Embed.

The Launch phase is just as the name implies – a firm launches an open innovation program. This can either be a small experiment in one SBU or department or it can be a broader open innovation initiative. In either case, the firm has a level of commitment to open innovation.

The Consolidate phase is where the firm now is focused on identifying the best practices from the Launch phase. Once identified, the focus is to consolidate these best practices and roll them out broadly across the organization.

The Embed phase is where open innovation is no longer a specific program, but is now embedded into the day-to-day work of innovation.

Why do firms not easily move past the Launch phase to Consolidate? What can be done to make this transition easier? A few of the reasons it is hard to move from Launch to Consolidate are:

• There is no clearly defined open innovation process – no one knows how open innovation should work
• Open innovation is cross functional but other functional areas are not on board
• Building new alliances is hard and can take time
• There is a lack of metrics  to measure performance
• Financial benefits fall short of expectations

How does a firm avoid the chasm? Mainly it is a matter of approaching an open innovation program the same way you would any large change program such as six sigma. You need to have clearly identified goals, all of the stakeholders aligned, good communications, someone responsible for success, training and good execution. This does not mean a big, expensive program. Even if your start with some simple projects to reach broadly outside of the organization to find new innovation, you need to define the goals, set expectations and then learn from the experience.

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.

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.

My colleagues work closely with innovation champions who are the backbone of their companies' open innovation programs. They hear stories of frustration, elation and the day-to-day effort that is poured into their work to make open innovation a success. These champions are part change agents, motivational speakers, visionaries, and also the 'work horses' that get the job done.

There was an interesting article on Harvard Business Review's blog yesterday that addressed the unique challenges faced by innovation champions. The author, Rita McGrath, argues that success in open innovation "depends on middle managers, scientists, and intra corporate entrepreneurs scavenging for resources in an informal way". We see this in some cases but we also see a general recognition among our clients that this is clearly not sustainable and the proper processes, organizational design, technologies and yes, budget need to be established to maintain a successful program. We like it when 'serendipity' happens and we find a highly unexpected solution and solution provider for our client, but we don't think serendipity belongs anywhere within the foundation of the open innovation program. Let NineSigma help your open innovation team launch a program. Contact us to learn more about open innovation.

Over the last ten years, we have either worked for or discussed working for a large number of companies that are implementing open innovation programs. Many times they have referred to NineSigma and others as Open Innovation intermediaries.

I have always pushed back when firms classify NineSigma as an OI intermediary. To me an intermediary is a group that simply connects two groups together and hopes for the best from the connection.

At NineSigma our work is focused across the two dimensions of Engage and Enable. Our Engage business is all about supporting our clients in solving a critical business challenge. This may involve finding and acquiring a platform technology to enable a suite of new products, it may be mapping out a white space and presenting options to our client on how to capitalize on new opportunities, it may be helping indentify new applications for existing technologies or it may be identifying and then contracting with a co-development partner.

The work typically involves broadly Engaging the global innovation community in order to deliver the desired results to our client. We use the term Engage to differentiate NineSigma's level of interaction with the global innovation community. Engage implies searching for and then engaging groups identified to deliver results to our client. Engaging means dialog, analysis, interpretation and synthesis to create a final work product that adds value to our client. This is much more that simply acting as an intermediary and connecting two groups together and hoping for a good result.

Launch your open innovation program with NineSigma today.

I have always liked these funny eye tweaking images in which you can see two different images depending on how you focus on the picture.   

Trying to solve a problem is quite the same; depending on how you look at the problem your outcome may vary. When looking at the image, your brain is doing the trick on its own, but how can you do that with a problem? Most of the time we look at the problem from one single angle: the one we are familiar with. Whether this “way of thinking” comes from our education or is built on our experience doesn’t count, what matters is its uniqueness and the difficulty we have to change our point of view. Corporate thinking in organizations tends to polish peoples’ creativity thereby limiting dissension.

Methods like Lateral thinking and tools like S.C.A.M.P.E.R. or TRIZ are available to help creativity and can be applied to problem solving but they require some training and self- discipline. Very often, getting an “outside view” is simple, fast and efficient to help in finding novel approaches. 

At NineSigma, every day we practice this “outside view” for our clients looking for innovative solutions or business approaches. Even better, we perform a “double outside view” that I have seen at work very efficiently dozens of times since I have joined the team. The first “outside view” pass, occurs with our Program Managers who unscramble, decompose and formulate the problem. They methodically review every possible approach in order to open as many paths as possible for potential solution providers. The second pass is done by the solution providers who offer their own knowledge and approach to the problem. Of course, the first pass drives some expected results in, but almost on every project we do receive unexpected or unobvious solutions. The famous quote from Albert Einstein: “Problems cannot be solved at the same level of awareness that created them” has never been so true. Let NineSigma help you launch an open innovation program. Contact us to learn more about open innovation.