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How to design an Open Innovation roll-out project: 4 scenarios

In 2011, we saw an increasing Open Innovation maturity. Most have passed the threshold of conceptual discussions. Many have gone beyond testing some new approaches, such as e.g. using an Open Innovation intermediary.

The “Early Adopters”, if we borrow this term from the theory of technology diffusion, see Open Innovation NOT as a one-size-fits-all strategy; rather they see it as a careful thought process that deploys openness in a sophisticated and nuanced manner.

In 2011, innovation-3 ran a couple of large-scale Open Innovation roll-out projects and is in discussions about several more for 2012. We recently met in our network for a one-day workshop in order to consolidate Best Practices and to sharpen our “Open organization” services. One key insight we generated was that the design for an Open Innovation roll-out program depends largely on the basic assumptions about the starting point and the route that the firm wants to take with the Open Innovation roll-out.

Judging by case evidence we see that there are four scenarios.

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“Global roll-out projects” are in our understanding cross-divisional / cross-Business Unit projects that are initiated and managed by corporate functions like the Office of the CTO. In our (most likely not completely representative) client experience we encountered four distinct scenarios:

Scenario 1: The “Shared infrastructure” scenario. In this scenario, the firm says: “Our divisions and Business Units are driving OI in their own interest and on their own initiative. From a corporate view we need to have shared platforms from a process/technical point of view (such as a proprietary innovation network) and shared platforms from a know-how view that capture Best Practices (such as how to manage Intellectual Property and how to collaborate in virtual innovation clusters).”

Scenario 2: The “Change in mindset” scenario: “Our divisions and Business Units have a clear idea about where they need to go with OI but are struggling with the necessary change in the innovation culture. From a corporate view we should work out Change Management tool-sets that can be used in all divisions and all regions.”

Scenario 3: The “Enhance innovation” scenario: “Divisions and Business Units do not care so much about „open“ per se – they want hands-on improvement for their actual innovation work at the “Point Of Innovation”. From a corporate view we should design the roll-out project so that we build up an Open Innovation Center Of Excellence which provides Open Innovation consulting for divisions and Business Units and delivers Open Innovation support on demand.”

Scenario 4: The “Organizational embedding” scenario: “Our divisions and Business Units are doing fine with their respective innovation work but our search for cross-divisional game changers should be intensified. From a corporate view we should make some structural changes so that the search for game changers and new innovators is coordinated and the interplay between a central Open Innovation “hub” and divisional / Business Unit “spokes” is well-orchestrated.”

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Each of these four scenarios can be justified and debated. Probably the “best” scenario depends on the specific situation of the firm.

The point is: Depending on the scenario, a specific design of the roll-out project is required for success in the roll-out project. This is because in each of the four scenarios, the Key Success Factors are different.

To illustrate the point, let’s take scenario 2 as an illustration. After some thinking, one will conclude that there are some 10 Key Success Factors. Among them are, for instance:

  • Project team set-up: It should have respected change agents from the Business Units, Organizational Development functions and Corporate Communications in key spots of the project organization
  • Thorough definition of the Open Innovation terminology: When the focus is on culture change one does not want to have the focus on content discussions such as “How does Open Innovation fit into Stage Gate process or into our regulatory affairs regime?” – These questions need to be clarified before the start of the roll-out project
  • Solid analysis of existing behavior, attitudes and mindsets: Before the actual change program starts one should have a clear idea on the strength and cause of potential resistance, broken down by business line and by hierarchy level. Doing so makes it much easier to focus the discussions and the change activities right on the spot
  • Effective Orchestration of formal and informal levers for change: In practice, a host of formal levers (such as KPIs, HR development programs or personal performance evaluation schemes) and informal levers (such as messages from the Top Management, “pride builders” or change agents) will be orchestrated to support a change in attitudes and mindset.

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Now, if one looks at the other three scenarios, the mix of the Key Success Factors – and hence the design of the roll-out project – is different. So, for instance in scenario 1, one would not put the analysis of the mindset on the list of Key Success Factors – but one would definitely need to care for

  • a solid analysis of existing internal OI approaches
  • an in-depth benchmarking with Open innovation strategies and approaches from other firms (from the same and from other industries)
  • a thorough search for Best Practices and White Spaces.