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Open Innovation conquers the whole value chain

Last week I had two very interesting discussions with two global companies that are far advanced in implementing Open Innovation. One of these companies is the lighting division (let’s call it ‘Lighting corp’ for the sake of confidentiality) of a world-leading electro-technical MNC, the other one a globally leading FMCG company (let’s call it ‘FMCG corp’).

These discussions took place in preparation of the upcoming flagship conference on Open Innovation in Germany (see here) that I prepared.

I found one important theme in these discussions: Leading companies are extending their Open Innovation approaches far beyond the core research and development and / or involving consumers into co-creating new products or services. Or, to put in other words, leading companies are openly innovating their whole value chain.

This is very much in line with what I analyzed at InnovationLab, a cross-industry / cross-science innovation hub jointly owned by five MNCs and two universities where co-innovation extends along the whole value chain (a 16-page case study can be downloaded free of charge here).

Take the case of Lighting corp. The background of Lighting corp’s Open Innovation approach is that it sees four megatrends in its business:

  • Energy efficiency
  • Disruptive innovation from “classic” technologies to LEDs and Organic LEDs
  • Changing customer requirements: From components to solutions
  • Sustainability and ‘Quality of light’

To cope with these megatrends, Lighting corp has deliberately opened up its whole value chain. Depending on the position in the value chain, Open Innovation has different focal points:

Or take the example of FMCG corp. To embed Open Innovation in its organization, FMCG corp has a team of seasoned experts advising and coaching the active open innovators. The tasks of this team are:

  • Develop external network
  • Support sites and coach
  • Meet needs of business (Defines process for disseminating insights globally)
  • Be part of long-term innovations and Community Of Practice
  • Remove internal barriers to Open Innovation

According to FMCG corp, already some 30% of Open Innovation activities are done outside R&D. A rough model on how FMCG corp’s Open Innovation activities along the whole value chain looks like this: