In order to compete and win in today’s global marketplace,
innovation-driven companies have to find ways to create and develop
products and services faster than ever before. Going outside their own
four walls to source ideas and solutions in order to expedite the
time-to-market cycle — commonly known as open innovation (OI) — has
become a widely accepted and applied strategy for companies ranging from
global chemical producers and automotive giants, to bioengineering and
pharmaceutical companies, sports equipment, consumer and packaged goods
makers – even state governments and the National Football League.
In the past, many organizations used open innovation as a “fix” when
their R&D bench hit a roadblock or ran out of time. Or there may
have been a lone ranger in the department that went outside to source
solutions - but only for his or her particular product line. These
situations required a modicum of transparency. The seeking organization
had to share enough detail about the desired solution to generate
high-quality submissions from outside engineers, technologists,
inventors, and research laboratories.
Increasingly, though, significant players in their industries such as
General Electric, Mondelēz International, Johnson Controls and Siemens
have incorporated OI as a core process – not just for discrete
situations. Instead of cracking the doors to R&D just enough to
allow the rest of the world to peek in, they’ve flung them wide open.
As a result, innovation flows through their organizations and powers
them forward on a daily basis. How did they get comfortable with being
so transparent? What did they realize that many of their competitors do
not?
They realized this: a significant portion of their R&D strategies
weren’t such a big secret. It’s common knowledge within their
industries what everyone is looking for and what the current solution
needs are. Candy companies are trying to develop packaging that can
prevent chocolate from melting during shipment in the hot months.
Automotive suppliers need smart textiles, and pharmaceutical companies
need energy efficient alternatives to distillation to produce pure,
sterile water. Instead of carefully guarding their R&D initiatives
through the development cycle, managers are openly sharing them. They
know they can be transparent with the global innovation community about
much of what they are trying to achieve without compromising their
competitive position.
Moreover, the increased transparency makes companies more competitive.
It allows R&D departments to build ongoing relationships with
external providers that come to know their strategies and even
anticipate their needs. Instead of waiting for a specific request,
these external providers can take the initiative to push ideas and
present solutions; sparking further innovation with approaches that the
company’s R&D departments have not previously considered. These
ideas can seed the way for the disruptive innovations that keep
companies ahead of their industries. PARC, a Xerox company, is a great
example of this practice in action. The company positions itself as in
“the business of breakthroughs” and demonstrates this commitment through
publicly visible open innovation collaborations that are sparked
through a variety of connections, for instance online OI communities
like NineSights.
Institutionalizing transparency compels R&D managers to be open by
default, not exception. As a core practice, it requires them to
evaluate their portfolio of initiatives using open innovation as a
filter to help determine which products to focus internal resources on,
and which to advance in partnership with external solution providers. A
company can have many great ideas and plans across its divisions, but
these ideas can lose visibility in the absence of a methodology for
understanding and prioritizing their viability and development cycles.
By the time they are surfaced as priorities again, another organization
may have a similar product ready to go to market.
At this level, there is truly no such thing as just a little
transparency. To successfully transform the innovation process, an open
paradigm must be embraced and supported company-wide as standard
operating procedure. Not only will this energize innovation across all
divisions, it will deliver additional benefits including economies of
scale, greater cross-divisional collaboration and solution sharing, and a
unified R&D approach that demonstrates to the world that the
company is truly innovation-driven.
Of course, changing something so fundamental to a company’s culture is
not an easy goal to achieve. Normalizing transparency as part of
procurement and R&D means managers have to become comfortable with
sharing information early in the product development process. For many
companies, online open innovation platforms have proven to be an
effective way to wean procurement and R&D managers off their
traditional process. These platforms feature managed innovation
galleries that are sponsored by the seeking companies, who post their
solution needs the way HR managers post job positions on a recruitment
site. As a result, sponsors immediately reach a new worldwide network of
experts across scientific and technical disciplines.
Practically speaking, innovation galleries present a relatively easy way
for companies to shift to a more open process. Providing R&D
managers with a managed online gallery as a tool for sourcing innovation
allows them to wade in and get comfortable with the transparency. It
will also become clear as connections with solution providers are made
and relationships established, that the gallery enables the company as a
whole to grow its own worldwide network of potential collaboration
partners across scientific and technical disciplines.
Michael J. Thomas, former manager of technology scouting within the
Automotive Experience division of Johnson Controls, crystallized the
benefit of shifting solution sourcing to an online innovation gallery:
“By using OI, we have realized a larger portfolio of high-quality
technological innovation opportunities. For Johnson Controls, OI is not
just about finding partners to help us bring our ideas to reality. It’s
increasingly about partners finding us, bringing their ideas and new
technologies to us.” The Johnson Controls innovation gallery on
NineSights.com features several technology searches for solutions
including one for smart fibers for automotive seats and another for
alternatives to chrome and zinc coatings. These are diverse technology
needs and should surface submissions from a range of potential providers
that will help grow Johnson Controls’ open innovation community.
As transparency becomes a more accepted and adopted R&D practice, it
has the power to significantly impact a company’s success in leveraging
innovation. While this initial adoption of transparency contributes to
innovation as a core strategic focus, it can also transform the very
culture of the organization into one that is more open, collaborative
and innovation-driven.