OID2012 Rick Wielens
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Rick Wielens CEO– NineSigma Europe
Open Innovation 2.0 Stockholm March 2012
2011 © NineSigma, Inc.
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Pop quiz
Biggest patent applicant in the world in 2010?
A. Philips B. Panasonic C. Huawei D. ZTE Corpora@on E. Apple
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Pop quiz
Where does innova@on happen most? (R&D spending, Patents) a. Companies with more then 25,000 employees b. Companies with less then 25,000 employees
But: Would your company have hired him?
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Innovation is shifting
outside the large entreprise
Company size in # employees
Source: Henry Chesbrough
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Page Page
Trends in Patent Registrations Top 7 global consumer-packaged-goods (CPG) companies
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In challenging companies on how they innovate and grow
We believe
R&D Ownership Avoid Risk Idea driven Assets
S&D /Collaborate & Integrate Access
Fail often Need driven Ecosystem
Enable and engage organizations to use open innovation and develop the right capabilities
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It is not about ownership it is about Access
The future is new business models e.g. Car share (not rental!) ZipCar: a fleet of 1,000 cars in 2 years for rental WhipCar: no fleet but within 6 months over 1,000 cars available to rent
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Organizations are not designed for innovation
….but for ongoing operations… • Resistance to innovation • Frustrating the money press
machine! • Predictable vs Uncertainty
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Open Innovation Toolbox
RAPID PRODUCT PROTOTYPING
TECHNOLOGY MONITORING
LINKED INNOVATION / CROWDSOURCING
OI SKILLS ASSESSMENT & DEVELOPMENT
QUICK -‐ SCAN OPPORTUNITIES
TARGETED PARTNER SEARCH
TARGETED TECHNOLOGY SEARCH
SOLUTION SEARCH Solu=o
ns
Skills
Exper=se
Knowledge
OPEN INTELLIGENCE / LANDSCAPING
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·∙ ·∙
Professor Frank Piller (MIT smart customiza=on & RWTH Aachen):
Open Innova@on is the formal discipline and prac1ce of leveraging the discoveries of unobvious others as input for the innova1on process through formal and informal rela1onships
What is Open Innova@on?
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Examples of Collabora=ve Innova=on Outcomes
Where do these ideas and technologies come from?
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Trusted networks
Suppliers
Consultants
Universi=es
Re=rees
Others
Other BU’s
Research center
Business Development
Other
Universi=es
Large companies
Small entrepreneurial companies
Private Laboratories
University Technology Transfer Offices
Individuals
NineSigma Affiliates
Na=onal Labs
Global Innova=on Community
Business Unit
Company
New solutions and ideas come from internal and external networks
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...working backwards from customers needs often demands that we acquire new competencies and exercise new muscles, never mind how uncomfortable and awkward-feeling those first steps might be.... Jeffrey P. Bezos Founder and CEO Amazon April 2009, Letter to Shareholders
Need driven innovation
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If I had an hour to solve a problem I'd spend 55 minutes thinking about the problem and 5 minutes thinking about solutions Albert Einstein
Need driven innovation
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Ideas or Needs
Idea Driven Edisons way: 700 experiments Serial / itera@ve Pay for failures and success All costs for experiments internal Serial failures & experiments Pay for @me invested
Need Driven Einsteins way: 1 challenge Parallel: Expert Crowds Pay for success only Only costs for integra@on Parallel failures & experiments Pay for value received
The Innova@on and R&D Paradigm: You have to Fail oWen internally to Learn
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THIS WILL NEVER WORK IN OUR INDUSTRY
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VDMA FVA study (federa@on)
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RFP: ID and topic*
Ins=tu=on Solu=on Technology
new known new known more info required
66198: Durable, non-‐lubricated gear materials
23 3 16 6 4
66204: Extraordinary fine par@cle removal from lubricated mechanisms
10 0 3 7 0
66207: Transla@onal research in bio-‐similar par@cle capture
7 0 6 0 1
66201: Low-‐fric@on hard surfaces 33 2 n.A. n.A. n.A.
VDMA Study / FVA (drivetrain / machine building federa@on Germany)
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Need or challenge driven Innovation request:Tacit knowledge Expert crowd sourced: 10,000+ people whom we suspect that might have a solution Non Confidential: enables IP transfer and partnership 60% Industry: Business AND Academics 40% Surprise proposals people we did not contact
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Open Innova@on Readiness: Absorp@ve capacity
Strategy
Culture
Organiza@onal structure
Systems / Methods
• Agenda segng: Innova@on and external knowledge
• Management commitment / support • Collabora@on and communica@on orienta@on • Innova@on orienta@on
• Structures and processes facilita@ng collabora@on and knowledge transfer
• Formaliza@on of Open Innova@on ini@a@ves (Open Innova@on process)
• Incen@ves-‐ and reward systems • Collabora@on and communica@on methods
Source: Prof.Frank Piller MIT/ RWTH Aachen
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Open Innova@on Readiness: Absorp@ve capacity
What are the obstacles in your organiza@on that may prevent you from benefi@ng from an open innova@on ini@a@ve? Which micro mo@ves are driving this resistance? Which measures do you have in place to prevent intra-‐organiza@onal NIH? Can you transfer some of these measures to open innova@on? How do your present incen@ve structures support NIH, how could you promote PFI (Proudly Found Elsewhere)?
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Engage th
e Inno
va=o
n Ecosystem
Enable Internal Teams to be Successful
New Technology, Partners, innova@on
People, Process Technology
Fully Leveraged Innova@on Ecosystem
Round up the usual Suspects
Enabling Open Innova@on focused across two primary dimensions
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Open Innovation Road Map Prepare before you jump
Session A
Tools Workshop
Program Development
Execute OI projects
Innova@on Audit
Learnings and Roll out
Session B
Interviews and data collec@on
First Projects
Define scope and objec@ves
Training workshop, OI tool box
On-‐going program review & support
OI GOALS: • Solu@ons • Opportuni@es • Improvements • Breakthroughs • Value
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Quirky in Numbers $200,000: Minimum upfront cost of building a conventional startup around a single product >200/ week ideators submit concept ideas online. Ideas must retail for less then $150 and should not require integrated software. Community of 65,000 members (growing 20%/month) influencers votes on ideas and develop them further
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What is a good idea? The ultimate experimentation platform
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30% payoff for ideators 2011 revenue: $6-10 million.Quirky has raised 12.6 million in funding. Staff: Today 40 planned 80
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What makes Quirky best in open innova@on? 5. Demonstra@ng speed of innova@on -‐ despite the involvement of so many par@cipants and par@es. 4. LiWing the crowdsourcing model to another level -‐-‐ and developing the idea further than "just" ideas: plalorm for experimen@ng.... 3. Providing a plalorm for products origina@ng from deep user insights and offering anyone the plalorm of turning their necessity into real products. 2. Excellent example of agility and ACCESS over OWNERSHIP and value crea@on between openness and closeness. 1. Being one of the first companies that really(!) takes external contributors serious. Source: Frank Piller