Embed Size (px)
Citation preview
Open Innovation: A Case Study within the Chemical Industry
Rob MunroOpening Innovation: Succeeding within an Established Technology Company, 2012
[email protected] +44 7896 128 878
ContentsWhat? Key Open Innovation IdeasWhy? Benefits, Risks and Success FactorsHow? Design of an Open Innovation SystemImplementation of The OI SystemHigh Innovation Performance: The “X Factor”Summary and Conclusions
Preconceptions?
1) What do you understand Open Innovation to be?
2) What would you like to know/understand about OI?
Many Examples
Key Ideas: The Origins of Open Innovation
Key OI Ideas: Origins
Open Innovation, Henry Chesbrough (2003)
Distributed Innovation, Georges Haour (2004)
5th Generation Models, Amidon-Rogers (1996)
Old Wine in New Bottles, Trott & Hartman (2009)
Abraham Darby, Ironbridge, Shropshire 1779
Key OI Ideas: DefinitionsThe knowledge-based view… “Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation and expand the markets for external use of innovation respectively.” Vanhaverbeke, West, & Chesbrough, (2006)
The knowledge management angle… “Systematically exploring knowledge exploration, retention and exploitation inside and outside an organizations boundary throughout the innovation process.” U. Lichtenthaler, (2011)
Capabilities focus… “…systematically encouraging and exploring a wide range of internal and external sources for innovation opportunities, consciously integrating that within the firm’s capabilities…” West & Gallagher, (2004)
Key OI Ideas: Closed v Open
The Era of Open Innovation, (Chesbrough, 2003b)
Innovation as a Continuum?
VerticalIntegration
Go to Market
EquityAlliance
SpecificationsContracts
Relation-BasedAlliance
Key OI Ideas: Porous Boundaries
Representation of OI, (Herzog 2011:23)
Outside-In
Inside-Out“Coupled”
Why Open Innovation? DriversUbiquity of Information – porosity and availability.Mobility of Skilled Employees.New sources of investment capital - e.g. VCGlobalization of Innovation – Locations, Cost, Quality.Trend to R&D outsourcing – Cost, Quality.Integration of users and suppliers into the innovation
process. To access resources, knowledge, facilities, market access.To dominate an industry product standard.
Key ideas: Benefits, Risks and Success Factors
Why Open Innovation? Benefits Innovation Performance:
To increase product, process and service innovation performance. To discover combinations of products features that would be hard to envision
under vertical integration. Innovate faster and to self-disrupt.
Financial Performance: Determined Open innovators outperform all others. Out-licencing – revenue from latent IPR.
Establishing New Ventures away from the heartland markets.Strategic Fitness: Flexibility and responsiveness to market pressures.Societal Benefits: Ultimately, better performing firms benefit society at
large through improved wealth creation. Risk Management: OI projects share the risks and costs of uncertainty.
Why Open Innovation? RisksIP: Loss of the “crown jewels”.Losing Revenue: Judging a fair shares of future revenues.Management Ability: New management challenge.Higher Costs: Transaction costs in managing contracts
and opportunistic behaviours.
Why Open Innovation? SuccessFirm Context: Size, Sector, Strategies, StaffInnovation Management: In-house R&D ProcessesCapability: Readiness to Embark (CMM)Leadership and GovernanceWhen to do OI
To access skills, knowledge, resources, marketsWhen firms can appropriate their fair shareParticularly for modular systems
Key idea: The Open Innovation Ecosystem
The OI Ecosystem: Key Ideas
Systems Thinking, (Peter Senge, 1990)Elements and Activities
Foresight workshops, Executive Forums, Customer integration, Endowed chairs, Consortia projects, Internet platforms, Joint development, Strategic alliances, Spin-outs, Test Market, Corporate Venturing…
“…working cooperatively and competitively with other businesses in order to co-evolve capabilities, to support new products, satisfy customer needs and incorporate a new round of innovations, the company builds a business ecosystem.” (Moore cited in Rohrbeck et al. (2009).
Ref: Methodologies for OI Management, (Rohrbeck et al., 2009)
Case Study: An OI Eco-system
The OI Eco-SystemGovernance Systems• Organizational and Project• Technology Council, Office of OI
Tools, Techniques and Processes• Strategic Mapping, Project Management, Portfolio Selection etc• New Decision-making Routines
Skills, Behaviours and Incentives• Managerial Visibility, Networking, OI Contract Management• Rewards to Connect, as well as invent. Appropriate Risk Taking
Open Innovation Roles• Communities of Practice, Technology Entrepreneurs, Knowledge Leaders• Change Initiators and Agents
Implementing Open Innovation: Change Management
Implementing OI: The IssuesOrganizational InertiaAbsence of Burning PlatformsCultural ResistancePerception of OI as a FadNot Invented Here SyndromeEstablishing new RoutinesNot destroying the Good, with the BadInvestment of resources
Implementing OI: Good PracticeTop-Level CommitmentLeadership and GovernanceManage the ChangeIntegrating Innovation PracticesWorking within the CultureVisible, “Quick Wins”
Implementing OI: Approach
Ref: Summary of OI Implementation, (Chiaroni et al., 2010)
Key IDEAS: OI is Necessary but not Sufficient?
High Innovation Performance
Ref: Components of a High Performance Innovation System, (Sommerlatte 2010:83)
More-than-the-sum-of-the-parts…
Summary and Conclusions
Summary and ConclusionsOI has become a widespread management paradigmOpen innovation is not always superior to closed -
contingent on firm-specific factorsOI is necessary, but not sufficientA Systemic approach is requiredChange Management is essential - New role for R&D
Open Innovation: A Case Study within the Chemical Industry
Rob MunroOpening Innovation: Succeeding within an Established Technology Company, 2012
[email protected] +44 7896 128 878
