Open Innovation Summit – Day One

by Braden Kelley

Open Innovation Summit Workshop
by Braden Kelley

Earlier this month I led a workshop at the Open Innovation Summit on identifying and removing barriers to innovation with special guests: Greg Fox (Cisco Systems), Helene F. Rutledge (GSK Consumer Healthcare), and Hutch Carpenter (Spigit).

The first edition of the conference was held in Orlando, Florida at the Crowne Plaza Orlando Universal. The second annual Open Innovation Summit will be held August 11-13, 2010 in Chicago, IL.

After the workshop I covered the rest of the Open Innovation Summit on Twitter as @innovate – check out the #OIS09 transcript courtesy of @renee_innosight.

“Press has done a good job of turning innovation into the buzzword of the decade.” – Philip McKinney (HP)

The conference kicked off with Phil McKinney of HP, and he was followed by innovation leaders from companies such as CSC, Shell, P&G, Whirlpool, Clorox, Xerox, and more. I don’t think there was a single company speaking at the conference with an open innovation effort that didn’t also have an internal innovation effort as well. Personally, I believe that it is imperative to launch an internal innovation effort first in order to work the kinks out and build up your capabilities internally before opening yourself up to the outside.

Some of the key things that came out of Phil McKinney’s talk included the idea that companies and countries will have to choose whether they will be focused on creating ideas or on implementing ideas. Also, as knowledge becomes a commodity and work is off-shored and verified on-shore, creativity is becoming the key to creating value. At the same time, there is often an innovation gap as many ideas submitted are not well thought-out, but at the same time the stupid ideas are often the only ones radical enough to generate big returns.

Never forget that creativity is not a gift, it is a skill that can be developed and strengthened. Ask “killer questions” to force people to look beyond the obvious, and try to prevent people from stopping after they hear the first reasonable solution. Companies do a variety of things with the people who submit selected ideas, HP plucks teams that submit successful ideas out of the business and puts them into innovation project teams focused on creating a successful launch. Change is hard for middle managers. Don’t tell them what you are going to do, tell them what you did. Final point – ideas are becoming the oil, the gold – the highly valued – So, does this mean that ideas are becoming a commodity then?

“Ideas without execution are a hobby” – Philip McKinney (HP)

“Innovation results from the creative application of intellectual capital in a disciplined manner to a problem.” – Lem Lasher (CSC)

Other conference highlights:

Lem Lasher (CSC) – How do you define innovation when employees have different first languages? – Answer: Use lots of visuals

Lem Lasher (CSC) – Innovation is difficult because most innovations will fail. But obstacles are put up because our mindset is to ‘not fail’. “We kill innovation by trying to eliminate risk.”

Lem Lasher (CSC) – “While management is focused on the seeds of innovation, they get rid of the water, they get rid of the sunlight, the oxygen, etc.” – Great management understands innovation tension and focus on improving the quality of the supporting ecosystem. Great innovation leaders create an innovation agenda that is just provocative enough to enable change without stimulating corporate antibodies. CSC focuses on incremental and adjacent innovations, consciously avoiding breakthrough or radical innovation.

Lem Lasher (CSC) – Revolutionaries hate change so much that they seek to create their change with violent efficiency (so they don’t have to change). Who is putting their career on the line for improving innovation process and culture in your organization?

“None of us went to school to learn how to fail. The more we try to succeed by innovating, the more we are destined to fail.” – Lem Lasher (CSC)

Raj Aggarwal (Rockwell Collins) – Open Innovation for Rockwell Collins is the augmentation of internal R&D efforts with innovation from outside the company. “Internal R&D is a development process, while open innovation is a discovery process.” Open Innovation is critical but requires changes in processes – companies that try to force Open Innovation into existing processes will fail.

“75% of firms expect 40% of innovation to come from external sources by 2012.” – Raj Aggarwal (Rockwell Collins)

Russ Conser (Shell) – Shell talks about revolutionary versus evolutionary innovation. Revolutionary innovation looks less attractive in the beginning. Innovations follow an S-curve – don’t look good early, but in hindsight their value is clear. GameChanger works to try and use different people, process, criteria, etc. to get different outcomes than core business. It’s not about the idea, it’s about the people and helping them make their idea real.

Russ Conser (Shell) – Shell invests not all at once, but in tranches, and evaluates submissions against six criteria – Potential Value? Could it work? Novelty? Why Shell? Sustainability? Doable Plan? The crazy ideas more likely to get funding. At the same time, your innovation program should be both transparent and below-the-radar. Too much attention, and the corporate antibodies come out.

Ed Harrington and Adam Hansen (Ideas to Go) – Everyone can be trained to be creative, but find the ones who are better at it and train those people instead. Accelerate ideation by bringing in metaphorical thinkers. Insightful people are generally self-revealing. They are happy to share their ideas. Innovators are not always the ones who come up with ideas, but they have a talent for knowing what’s valuable.

Ed Harrington and Adam Hansen (Ideas to Go) – With Open Innovation, some people submit, some people have trouble expressing idea, others have no ideas but want to participate. Open Innovation is not a perpetual motion machine… We advocate an episodic approach as opposed to an always open approach when it comes to Open Innovation. Duplicate submissions are one of the key problems to solve for when you go to wide-open innovation. When it comes to duplicates in open innovation submissions – “Let the best expression win.”

“I as a business person want to know what my competitors want to own.” – Jackie Hutter (Hutter Group)

Jackie Hutter (Hutter Group) – If you are not communicating to General Counsel and IP lawyers what you expect from your IP portfolio, then you’re leaving money on table. Some companies prevent people in business from doing patent searches, they fear that somehow it will taint things (create risk). You should be tracking competitive patents because they tell you where competitors are making technology investments. When it comes to patent searching you must frame the question properly so that it yields a narrow & relevant result set. Patent searching can
help you identify ideas that are ‘half-baked’ (in a good way) that you can acquire and finish off.

Carrington Smith (Air Products) – Keep in mind that by the time it shows up in a patent search tool, host organization has been working on technology for a while. I’m surprised that more companies don’t integrate the out-licensing of IP and insourcing of IP and Open Innovation into one team. Many organizations don’t look sufficiently at what value their patent portfolio actually has.

Pramod Reddy (P&G) – P&G has 9,000+ people in R&D but there are 2,000,000 researchers working in science areas of interest to P&G. Anything outside the inner circle of project teams is considered part of P&G’s Connect + Develop program. The second deal with the same partner takes half as long and is worth twice as much as the first. The speed of review is very important to Open Innovation success, as is communicating to people “no thank you” instead of no response. P&G has done joint ventures with competitors. Why are others so afraid to do the same?

Pramod Reddy (P&G) – P&G is now undertaking proactive approach to Open Innovation through developed networks of potential providers. P&G is now trying to make it so that Connect + Develop (C+D) is the way we work, not a separate program with success stories. Team of 70+ technology scouts around world and must have broad technology understanding and good social skills for networking.

Moises Norena (Whirlpool) – Check out this article for presentation details

“Innovation is all about Enablement” – Robert Zivin (J&J)

“Innovation is Polytheistic” – Robert Zivin (J&J)

Robert Zivin (J&J) – When choosing to pursue innovation, you are choosing internal disruption – we have to be in the business of disrupting ourselves. We have to manage the disruption of ourselves. We have pharma, medical devices, and over the counter stuff too. The more it costs to manufacture a product, the easier it is to do Open Innovation. Capital costs are a hurdle to IP theft. We train a co-operative of people to help respond to the external Open Innovation submissions and help triage. We have a 30-day SLA on our Open Innovation web site – We’ve got to get back to people (even with a “no”) rather than say nothing. The John Hopkins/J&J/Entrepreneur/Philanthropy partnership they’ve created, could serve as an alternative to the typical University tech transfer process

“In early stage innovation, relationship trumps ownership” – Youseph Yazdi (Johns Hopkins)

Helene Rutledge (GSK) – GSK looked at Samsung, Apple, Roche, P&G, and others in building their approach to Open Innovation. The GSK Open Innovation Model is Want -> Find -> Get -> Manage. The GSK Consumer Innovation Team workspace – The Hub – has people sit in different desks every day in an open plan flexible workspace. GSK’s Open Innovation Model requires idea to have scientific proof, solid business case, be unique & have competitive advantage.

Helene Rutledge (GSK) – Aquafresh Isoactive was an Open Innovation example that involved partnering with four different external partners, and idea came from adjacent industry (shaving gel). ‘What’s In It For Me?’ applies to open innovation as well. Hiring for open innovation at GSK involves finding people with a balance of technical licensing and product development experience.

Cheryl Perkins (InnovationEdge) – The soft things are often the hardest when it comes to innovation culture change. Iceberg of Organizational Culture – below water you have norms, unwritten rules, shared assumptions, values, and shared beliefs.

“The future of innovation strategy is all about optimizing relationships.” – Cheryl Perkins (InnovationEdge)

Overall it was a great conference, and it reinforced how important senior leadership support is to successful innovation, along with other things like good processes, cross-silo communications. I look forward to the August Open Innovation Summit in Chicago.

Check out the Open Innovation Summit – Day Two wrapup here.

Braden KelleyBraden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

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