“I believe that a failure of modern microeconomics has been overweighting the importance of human capital within the organization — and underweighting its importance outside the organization. ” — Michael Schrage, author of “Who do you want your customers to become?” Via MITSloan Management Review
Digital society explained by Deutsche Bank. Animation presents digital networks and ways they can be used for government, corporations, innovation and culture
From a Q and A with Gail Martino, manager of emerging and disruptive innovation at Unilever’s open innovation group. Her group recently launched an open innovation platform, which has received more than 300 submissions since its launch in late March from a diverse range of suppliers (new and existing), businesses and individuals.
Q. The majority of “challenges and wants” posted on the platform involve sustainability issues like packaging, water or nutrition. What’s behind this? Are sustainability challenges particularly suited to collaboration, or are you running out of ideas?
A. The Unilever corporate mission has become well known by our partners and is genuinely supported by our employees. Our Sustainable Living Plan is central to our corporate values, but it’s also part of an ambitious growth model. We clearly understand that one entity, no matter how varied and innovative, is unable to solve some of these global challenges alone.
A Belgian study suggests finds ways to manage partners in open innovation networks:
1. Select the right partners: Open innovation succeeds only if a small/medium enterprise chooses partners well. Screen candidates: they need to have the same attitudes towards collaboration and risk.
2. Exercise leadership: The company that took the initiative to develop a new product should display clear leadership, organising and managing the innovation network.
3. Stay active: Inactivity is deadly for networks. Phasing, a sense of urgency and continuous progress are strong motivators. SMEs should set agendas and stimulate each other.
4. Rules matter: A well-oiled network increases the speed and productivity of innovation and strong leadership means disciplining partners that do not play by agreed rules and values.
5. Be open: Innovation partners need to communicate and report openly. They have to trust each other to charge a reasonable price for products or services to others in the network.
6. Aim for balance: Reconcile the needs of your company with management of the network – and keep your workers in the loop.
7. Size matters: It is easier to collaborate with partners of a similar size and small firms work well together because they have similar decision-making processes, financial limitations, approaches to innovation and business cultures. But they also need to have similar ambitions.
8. Control costs: Different partners are preoccupied with their own parts of the project and send invoices to the central firm. Make sure costs do not soar. Set priorities with partners.
9. Never stop learning: The central company in an innovation network must know partner’s competencies inside out. When partners hit a problem, it should know who can solve it.
Two billion people a day in 190 countries use a Unilever product. The company recently created a new public web site to gather ideas for environmentally sound products. Its open innovation unit has already increased share of external ideas adopted by the company from 25% to 60%. The web site will make the innovation program more transparent. Among current areas of interest:
From an interview with Helene Rutledge, head of Open Innovation at GlaxoSmithKline.
Aquafresh Isoactive is an innovation that came together from a consumer insight, partnering with four external companies for the technical solution, and serendipity delivering more than the originally intended benefit. It started with consumers noting that a fair amount of toothpaste gets wasted when you brush and ends up in the sink where it needs to be cleaned up.
An internal GSK colleague with aerosol product experience proposed a gel-to-foam technology solution that already existed on the market for shaving foams. Using his networks and other GSK suppliers, potential partners were located to provide the solutions that were outside GSK’s core competencies. Ultimately, GSK worked collaboratively with 4 separate partners to develop the product. Serendipity came in when the product was clinically tested; the foaming action allows more penetration between the teeth, increasing the ability of the product to clean and prevent cavities over standard toothpaste.
This is a classic example of Open Innovation where technology was borrowed from an adjacent category where there is deep expertise, the product was developed using externally sourced experts, and the final product was successful beyond original expectations.
Large corporations like Nestle, Kraft, Siemens, General Mills, and Clorox all participate in open innovation practices. Here is a case study of the open innovation process at Proctor & Gamble, one of the most respected consumer product companies in the world. P&G introduced their Connect Develop program on their website. The site is a place where the general public can submit their innovations, read about successful business partnerships, and even scavenge current IP needs of the company. By Robert F. Brands via a. Kosuke Scoop.it
“Open Innovation appears to be powerful and successful. 48% of respondents engaging in OI report that it has already yielded major changes to internal processes, and 34% report major changes to their external offerings. In both cases, the corresponding figures are higher for minor offerings.”
