NineSigma is, in contemporary parlance an “Open Innovation Intermediary”. I like to keep it simpler. We help people with problems make connections with people who might help them solve the problem. It doesn’t sound as glamorous or hip when presented that way does it? Or if you look at all the buzz around open innovation, you see a lot of repackaging of old wine in new bottles. Since I am some of the older wine, I thought I’d share my experience in implementing OI in a SME and what I’ve learned that applies to today’s environment.
Of course, long before someone (Chesbrough, 2003) got the idea of calling getting something from outside your own fences “Open Innovation”, people were doing just that. We tend to overlook the roles of suppliers, academic consultants, and consulting firms and technology vendors, development alliances, organized networking and government programs that have been a constant feature of our global industrial civilization. This means we also overlook the roles of the purchasing departments and corporate policies that engaged these traditional means of obtaining solutions from outside the fences. The focus on web-centric communication mechanisms, the popularity of terms like “crowd-sourcing” and “innovation ecosystems” tend to promote unrealistic expectations of effortless and cost-free profitability and diminish the perceived value of established innovation infrastructures. An unfortunate side effect of this kind of promotional language is that it can inspire resistance to OI mechanisms from the very people they can help the most: The people responsible for delivering new technologies, products and business methods. People who actually do the hard work of making innovation happen may well regard stories of great, effortless success with raised eyebrows. The skepticism of working innovators to the management theory du jour or as a colleague puts it “Management by Bestseller” is something acquired easily in an industrial career. When skepticism is replaced by cynicism, then the game is truly lost.
Before I started my industrial career, I, like all the other NineSigma program managers, was in graduate school. My graduate advisor had a number of industrial research projects going on his group. Ziegler-Natta catalyst studies is one such project that a friend of mine worked on. One alumnus of the group brought in projects dealing with the applications of brassylic acid for macrocycle synthesis. These are just two, never mind the spinoffs and ventures coming out of the group’s research that led to numerous successful companies and profits.
When I took my first industrial job at Air Products, it seemed rather natural to cast around for academic groups that would be better places to park some of my research ideas than working on them myself, and I was encouraged to do so. Air Products was no novice at building alliances and acquiring technology from the outside. My first assignment (as part of a team) was to evaluate a technology proposal that was coming in from the outside. Closely attached to the corporate R&D group was a commercial development fellow whose job was technology scouting. He would visit universities and startup companies around the world, looking at the latest developments that might fit our business objectives. I remember wanting his job someday. I like to think my work with NineSigma gives me some of the best parts, seeing the innovations needs of our clients and the amazing range of solution components offered by people around the world.
My second industrial job was with a much smaller firm, Nepera Inc. At the time we were owned by Schering AG. What I discovered on arriving was a catalyst development program working together with Union Carbide, a consulting Professor in Munich and Sude Chemie. Clearly, this historic German firm was open to outside innovations. I had a role in taking that project to commercialization 9 months after I started. As a successor project, I initiated an outside effort for gas phase reaction modeling. I learned some of the downsides of outside contracting when the supplier turned out to have significantly over-promised and then held out his hand for more money.
Looking outside however really went into high gear when Cambrex acquired Nepera. Cy Baldwin and the late Art Mendolia were old veterans of chemical industry. Cy had lead marketing efforts at ARCO and Oxirane while Art lead research at Dupont and was later an Undersecretary of Defense. When they set out on their own, they brought this experience in front of us and dropped it on the table during our first quarterly R&D review meeting. “Don’t think we’re going to spend a lot of money on R&D here,” they said. “We spent lots of money at DuPont and didn’t get a lot to show for it”. This was rapidly followed with “Why are you doing that? Couldn’t someone outside do it better/faster/cheaper?”
At our next review meeting we proudly described where we had engaged outside resources only to be questioned again, “What about the intellectual property here; shouldn’t you be doing this yourself?” We got it right the third meeting, and thereafter, described a carefully thought through balance of internal and externally focused efforts. Cy and Art did a significant part of their management of Nepera through those R&D review meetings, holding us accountable for all aspects of the project in relationship to our business objectives. If we didn’t know something about another department’s activities we were chastised with the rhetorical question, “You’re a small company; don’t you guys talk to each other?”
In between then and now, I worked for other small companies, as a technology consultant and as an entrepreneur trying to sell innovation into large companies. I’ve worked as they say, both sides of the street, and now I work in the in middle, part traffic cop, part coach, part target.