Look at your internal innovators - Ch5 Implementing Open Innovation

Much literature has reported that Open Innovation[1] is not limited to the sole R&D or innovation department but should also involve all employees with different functions which may contribute to Open Innovation’s benefit by improving their own performances (Martin Duval, Bluenove, 2014). Another research showed that that different company functions displayed quite distinct attitudes towards Open Innovation (Mortara, Jakob Napp, Slacik, & Minshall, 2009) as represented in below chart.

Company functions and their attitudes toward Open Innovation ( (Mortara, Jakob Napp, Slacik, & Minshall, 2009)

Some functions are designed to be open because they support OI activities with people recruited specifically to promote and foster interaction with external partners. These functions are therefore intrinsically open. Examples include formalized technology intelligence and scouting activities for monitoring technological developments; corporate venture capital functions to identify and support new businesses with technologies of potential future relevance; infrastructure designed to nurture a fertile ‘ecosystem’ (e.g. science parks). Functions intrinsically open are the Blue sky research which only exists in some companies. People within such functions assert that they have always been open (e.g. they work with partners in universities and other research centers) and therefore have not needed to change their way of working to comply with an Open Innovation approach. Functions that find it difficult to be open are other following departments which are experiencing the most important change with an Open Innovation approach.

R&D and Product development

Since the innovation is opening, the R&D, innovation, product development departments should be mostly involved in this Open Innovation implementation. They can benefit from many opportunities by collaborating with others such as developing faster, concentrating on their core research and asking those to do what they are good at, improving innovation culture, learning to find solutions elsewhere, comparing ideas, technics, technologies in order to complete and validate internal research. These departments face many challenges such as the Not-Invented-Here syndrome or the fear that others steal their ideas and technologies or to lose their status of expert.

Human Resources

Open Innovation activities such as ideas competitions among students can bring great opportunities for detecting and recruiting new talents. Internal Open Innovation activities allow to identify employees with unexploited capabilities, to valorize them and to provid an excellent occasion to reallocate resources. HR department has a key role in implementing Open Innovation. They have to foster internal collaboration dynamics, collective intelligence and individual creativity. They must participate, animate innovation communities while protecting and rewarding entrepreneurs.

IT department

New technologies are important to enable many online OI activities inside and outside the company. The IT department should be involved with innovation, HR and communication teams in order to ensure the level of activity of innovation communities. They must facilitate the opening of APIs and Open Data, the creation of Enterprise Social Networks, and moderating the pressure of data security.

Legal department

The Legal department is involved in all aspects of the Intellectual Property management which is essential for Open Innovation. The highest challenge for lawyers is to learn to think in terms of business opportunities although they are used to think primarily in terms of legal risks (Lindegaard). As example of good support to Open Innovation, the legal department should communicate the risk to managers, letting them decide in fine and manage the risk with them rather than killing the risk together with the project. 

Procurement

As part of the move towards greater openness, the role of the procurement department had significantly shifted, from providing raw materials in response to R&D directives, to taking a more active part in the innovation process. In the opposite of following a trend of reducing the portfolio of suppliers, procurement department could support the technology scouting team in charge of detecting new partners. By being involved early in the process, they can adapt and moderate the call for tender rules and the risk and financial assessment of potential partners such as startups.

Marketing

Marketing and sales teams are the interface of good ideas and suggestions coming from customers and users of the product and services of the company. Indeed platforms of customers beta testing or ideation are a new and complementary tool in a portfolio already rich at the disposal of the marketing department. These new tools will allow making financial savings compared to traditional methods such as the focus groups. In addition, this new approach of collecting “need and context-of-use information” and co-creating with lead-users (Von Hippel, Democratizing innovation, 2005) provide valuable benefits in the marketing strategy.

Communication

The communication department will be involved in the majority of the Open Innovation activities. A good communication plan is a key success factor for all Open Innovation actions either inside the company to help spreading the Open Innovation implementation (intranet, newsletters, display, meetings…) or also outside the company like for ideas competitions or corporate platforms like Connect & Develop from P&G. In addition, all these communication towards customers participate to the brand value.

Finance

In a broader level of innovation management, the finance department helps the company in its quest of the assessment of the “Innovation ROI[2]”. Concerning the Open Innovation, its role is essential in the right balance of the use of Business Plans and in corporate venture funds. However the innovation ROI is not an easy issue.

According to a recent survey conducted by the MEDEF (see below chart), companies involve in their Open Innovation activities firstly their employees, then universities/research centers and their customers before the technology suppliers and startups.

Internal/external contributors involved in Open Innovation 
(MEDEF, November 2014)

End.

Extract from ? Implementation of Open Innovation: understanding and managing its objectives, enablers, and obstacles. ?, Pascal Bitterly, March 2015

[1] Open Innovation describes the phenomenon of companies introducing ideas and technologies coming from outside into their own business and letting unused internal ideas and technologies go outside for others to use in their business (Chesbrough & Bogers, Explicating Open Innovation: clarifying an Emerging Paradigm for Understanding Innovation, 2014)

[2] Return On Investment.