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A roadmap for implementing R&D-driven Open Innovation

Almost in any client discussion I have about implementation of R&D-driven Open Innovation we discuss questions like „How long does it take to implement it? When is the appropriate time to start with organizational change? When should we install metrics to measure success in Open Innovation?”

My typical first reply is, usually presented with a smile “It takes longer”. From my observation of leading German companies I assume that a 4-5 year horizon should be envisioned until R&D-driven Open Innovation is fully implemented. “Fully” meaning that if you visit this company again after this time has passed you will notice without extensive observation and consulting skills that R&D Top and Middle managers think differently and have a changed, more open mindset.

It makes sense however to actively shape the change process. I usually suggest to divide it into three major steps, each of them lasting 1-1.5 years.

Why is this so and what are these steps?

[slideshare id=5171548&doc=roadmapforimplementationofrd-drivenoi-100910050944-phpapp01]

Let’s first start to look at which approaches companies are pursuing in implementing R&D-driven Open Innovation.

No company these days is completely closed anymore. All of them have implemented one or more approaches that are organizationally centered with varying degrees of consequence. The most prominent of these are:

  • Technology Scouts – People that spend a significant proportion of their time actively looking for new technologies and technology partners
  • Open Innovation intermediaries – Using InnoCentive, NineSigma or comparable platforms to post technical or scientific challenges to a world-wide community of solvers
  • Ideas and innovation contests – Annual contests and awards for the best external innovators
  • Multi-science Scientific Advisory Board – Signing up the best scientists to advise R&D Top Management on the most important trends and opportunities
  • Trade fairs, Events – Systematic evaluation of trade fairs in the own and in relevant industries on trends and potential partners
  • Innovation workshops (with suppliers and / or universities) – Scheduled workshops with suppliers and academia to generate and evaluate potential innovation ideas
  • Supplier-in-residence – Inviting key suppliers to work on site in a joint lab with own lab managers on technical or scientific challenges

Some companies also install proprietary platforms to co-innovate with their innovation community. These come usually in two typical flavors:

  • Hub-and-spoke model – The company being the hub and the co-innovation partners being the spokes, i.e. a 1-to-n network structure. A frequently cited example of this model is P&G’s Connect+Develop platform (although P&G’s approach has some severe inefficiencies in my view)
  • Collaborative platforms – The company being one co-innovation partner primus inter pares with others. An example for this is SAP’s Sapiens approach.

Fully implementing R&D-driven Open Innovation means that companies choose their specific mix of all of these approaches and ramp up on depth and scope (e.g. number of supplier workshops or numbers of co-innovators signed up on the platform). This would go along with discussions and decisions on strategy (e.g. “Where do want to be open?”), processes and IT, organization (e.g. “Do we need a separate Open Innovation department?” and activities centered around training, coaching and communication to change the mindset.

I suggest to divide the implementation process in three steps, each of them taking 1-1.5 years.

  1. Launch phase – Start with a project (clear scope and objectives), run some pilots and install learning cycles. See what set-up regarding new roles and new processes would work and start the Change Management program targeted at changing the mindset and the behavior.
  2. Consolidation phase – Gradually transfer what is already working well to routine and secure Best Practices. By then it becomes clear what metrics should be used and how the incentive system (e.g. bonus) should be tweaked so that is fully supports Open Innovation. In this phase it becomes clear which organizational changes should be implemented and how the R&D strategy should be interlinked with Open Innovation.
  3. Embed phase – By now the process management should be established and metrics and dashboards at work. The incentive system should be adapted to the Open Innovation model and organizational changes implemented. Furthermore, in the formal R&D strategy process there is an ongoing critical review of own capabilities and in joint R&D projects you will find external resource integrated into the core team on a regular basis.