A recent survey report, “Managing OI in Large Firms” by UC-Berkeley and the Fraunhofer Institute, published in May 2013, sought to clarify facts and dispel any flawed myths surrounding the use of Open Innovation strategies across companies in North America and Europe.
Specifically, the study authors wanted to address the current popular notion that Open Innovation is a “fad” that may be waning, but several other ideas and facts are surfaced. One surprise to us is that the very popular and talked about “crowdsourcing” techniques are rated among the lowest in importance. Despite its ‘mindshare,’ it’s operations are maybe not as practical as other techniques and supports the theory of crowdsourcing being more of a marketing tool than a source of profitable innovation.
Key findings of this report include (from page 4-5 of the report summary):
- 78 % of firms in our sample report practicing open innovation (3.1).
- No firms in our sample report abandoning their practice of open innovation (3.2).
- 71 % report that top management support for open innovation is increasing in their firm (3.2).
- 82 % report that, compared to three years ago, open innovation is practiced more intensively today (3.2).
- Inbound open innovation practices are more commonly practiced than outbound practices. The share of projects with an inbound component is 35 % on average. Only about 8 % of projects result in outbound activities (4.2).
- Customer co-creation, informal networking, and university grants are the three leading inbound practices in 2011. Crowdsourcing and open innovation intermediary services are rated lowest in importance (4.3).
- Joint ventures, selling market-ready products and standardization are the three leading outbound practices. Donations to commons and spin-offs play a minor role (4.3).
- Customers, universities and suppliers are the three leading open innovation partners reported by survey respondents (4.3).
- Firms are much more likely to receive “freely revealed” information than they are to provide such information (4.4).
- Establishing new partnerships, exploring new technological trends and identifying new business opportunities are the leading strategic reasons to engage in open innovation (4.5).
- Corporate R&D and product & process development units report more autonomy in budgeting for innovation activities (5.1).
- The typical large firm in our sample spends US$ 2 million annually on open innovation, and employees 20 full time equivalent people to do the work (5.2).
- Open innovation is not much formalized yet, and cultural norms are as important for open innovation as formal practices (5.3).
- The biggest challenges in managing open innovation are within the firm. The change process from closed to open innovation is rated as the most difficult task (5.4).
- Firms are not satisfied with their current open innovation metrics (6.1), though they are more satisfied with their overall open innovation performance to date (6.2).
The study authors admittedly point out two potential key biases of their survey response group: 1) respondents more heavily represented high tech manufacturing than other industries; and 2) survey population was slightly skewed more towards European companies.
To request a copy of the survey summary report, just fill out the form below to be sent a copy via email:
History is filled with examples of sworn enemies who put aside their differences in the face of a common threat. Feudal Japan was filled with warring states that put aside differences when threatened by external invasion. President Reagan once famously pondered in a speech what would happen to bickering countries if the earth were threatened by extra terrestrial hostility. More recently, 15 competitors in the finance and banking industry had to do the same when faced with the ongoing challenge of an increasingly paperless society and the disruption of e-commerce.
We’ve heard before about competitors collaborating to change the industry, but this time the scope is a little larger and the circumstances more pressing. At an upcoming free webinar on 7/25/13, we’ll hear from Martie Woods, former Chief Experience Officer at Deluxe Corporation, who will explain how they used ethnographic research and co-creation techniques to lead this effort of bringing leaders from competing organizations of different sizes and service models together to solve their common challenges.
If you’d like to hear these inside insights on how she got these groups together to trust one another and co-develop innovative solutions, sign up for the webinar at the link below.
“When 15 Competitors Collaborate: Changing an Industry
through Primary Insights and Open Innovation”
Thursday, July 25, 2013 from 1:00-2:00pm ET
Do your technology scouting practices amount to digging in the dirt?
In today’s ultra-competitive and fast-changing business environment, innovation distinguishes the winners from the also-rans. But few companies have the time, resources and/or expertise to continually develop breakthroughs on their own. The days of internal labs conducting pure R&D are long gone. Instead companies have embraced Open Innovation (OI) – going beyond their own four walls for ideas and technologies with game-changing potential.
Technology scouting represents an organized approach for identifying needs, gaps and opportunities, and then finding solutions outside the borders of the enterprise. It is a business development and growth-oriented activity that goes hand in hand with Open Innovation. There are many forms (partnerships, licenses, acquisitions, crowdsourcing, contests, etc.) — often with multiple players – and the reach is increasingly global.
Management Roundtable’s White Paper, Technology Scouting: Practices of Industry Leaders, outlines the specific ins and outs from organizations that have successfully formalized the process for seeking external solutions and partnerships necessary for market success.
In this paper, you’ll read brief examples from expert Jay Paap as well as companies such as Procter & Gamble, Unilever, Corning, GlaxoSmithKlein, Kraft and others on issues such as:
- the role of a technology scout
- the qualities of a high performing scout
- how to focus searches and where to start looking
- basic screening and partner selection criteria
- corporate examples and best practices
To request a FREE COPY of the white paper, Technology Scouting: Practices of Industry Leaders, just fill out the form below to be sent a copy via email:
Very few companies can legitimately claim that innovation is embedded in their DNA. With actions that back up the talk, 3M is one of these few. Frequently named as one of the top 3 most innovative companies in the world (behind Apple and Google), 3M demonstrates this commitment with both investment and effort, including:
- Mandating employees use 15% of their time on innovation and customer focused activities
- Declaring technical staff “dual citizens” and making knowledge sharing and cross-pollination a big part of the employee culture
- Creating over 30 customer technical centers that bring consumers directly into the NPD process
3M has also just opened up their “3M Innovation Center,” where they invite industry professionals to see, touch, hear, and experience many new technologies that make up our modern world. If you just happen to be in the Dubai Internet City where the facility is located, you can register for a visit and tour – click here to learn how.
As part of the CoDev2014 Free Webinar Series, 3M’s Peter Fritz will be sharing his experiences with 3M’s Open Innovation strategy with their supplier partners. Here are the webinar details and how to register for free: