Breeding Environments for Open Innovation Ilkka Kakko1, Tatiana Glotova2

1Joensuu Science Park, Länsikatu 15, 80110, Joensuu, Finland, ilkka.kakko@carelian.fi

2 Joensuu Science Park, Länsikatu 15, 80110, Joensuu, Finland, tatiana.glotova@carelian.fi

Abstract Authors present wider definition of Open Innovation paradigm that was introduced by Chesbrough. Some relevant theories and models are discussed in order to give an introduction to the backgrounds of netWork Oasis project, which is the first real attempt to create a breeding environment that supports wider Open Innovation paradigm in great extent. Though the application of Scharmer’s U-theory was not a goal during the design and implementation of Oasis-concept, it appeared to perfectly fit in this case, especially in situations where the focus is on totally new intersectional innovations. Similarities of Oasis Journey and U-theory are described and needs in further research are formulated.

Keywords Co-creation, Co-Innovation, Open Innovation, Collaborative Working Environments, Breeding Environments, Serendipity Management

1 Introduction

Science and technology parks are the vital part of Finnish innovation system. They are responsible of various development programs and business incubation services. Normally they are also engaged in real estate business and offering office spaces to let, running several added services to tenants. Joensuu Science Park in Eastern Finland is widely known as a forerunner in creating new business models for so called 3rd generation of science parks. netWork Oasis is a development project run by Joensuu Science Park. The basic objective is to create an environment which is especially designed for the new open innovation knowledge landscape and networked, global business activities. This unique collaborative working, learning and development environment was opened for pilot use in December 2006. In this paper we describe the challenges in designing and implementing this new model, some theoretical background behind it, practical methods used and lessons learned. netWork Oasis itself will function as a breeding environment for open innovation but we will also use the whole Oasis project as a case example of successful initiative where some of the open innovation approaches and methods were used. We will also open up the discussion of widening the scope of so called “open innovation” from Henry Chesbrough’s initial definition to public-private partnerships, to “users as developers” and to “open mind, open heart, open will” – approach originally presented by Otto Scharmer from MIT Sloan School of Management.

2 Wider definition to Open Innovation

Chesbrough defines Open Innovation as a process, when valuable ideas may come from inside and outside the company and can go to market in the same manner (Figure 1).

“Figure depicts the knowledge landscape that results from the flow of internal and external ideas into and out of firms A and B. Ideas abound in this environment, not only within each firm, but also outside the firms.” (Chesbrough 2003, p.43)

However Chesbrough is very much concentrating on American big corporations’ approach and IPR related issues, missing more typical to Europe SMEs’ and even professional individuals’ networks. To widen his definition of Open Innovation we would like to include “users as developers” approach, which we followed in netWork Oasis from the very beginning. This means that valuable ideas may come not only from other companies or researchers and research groups, but from the end users as well (Von Hippel 2005).

Figure 1: Open Innovation Paradigm. Source: Chesbrough, H., 2003.

If for the big corporations it is a hard task to be able to hear and implement single end users’ ideas into life, then for the innovation intermediaries it is a challenge and good opportunity to be able to listen, collect and propose those ideas to a particular company for further development. If we will go further: users themselves may evaluate, choose and implement some of the ideas. Therefore today’s business environment is increasingly looking like an ecosystem. Another missing aspect of Open Innovation paradigm by Chesbrough is Scharmer’s idea about Open Mind, Open Heart and Open Will. These three kinds of openness allow a person or a company to answer to the questions “Who is my Self” and “What is my Work”? Recently Open Innovation paradigm is too much focused on the actual ideas exchange without answering the question what is the inner source of those ideas which appear. Open Mind is a must in Open Innovation knowledge paradigm, while the importance of Open Heart and Open Will is not that obvious and might be neglected. In this paper we shall concentrate on the breeding environments that support individuals in the process of Open Innovation, taking into account our experience in netWork Oasis including “users as developers” principle, Scharmer’s U-Curve and Oasis Journey. Co-sensing, co-presencing and co-creating are the vital parts of Otto Scharmer’s U-theory. Experiences from netWork Oasis will clearly show that this theory works assuming that within the implementation process you are able to use appropriate tools and methods. We will describe some concrete methods which were created and tested in our project.

3 Underlying models and theories

In this chapter we will discuss some theories and models that are used in netWork Oasis project. We will also come up with several challenges raised with Open Innovation paradigm, which will require further research and development. One of the central ideas that we would like to add to the Open Innovation paradigm is nicely described by Tom Kelly in his book “The Art of Innovation”, where he points out very strongly that there is a critical element that every team or company should expect: the unexpected. This is based on the thousands of projects and historical fact, that innovation does not come about by central planning. Change offers insights you did not anticipate. It is a well-accepted truth that inventions and discoveries often result from random accidents or experiments that went awry. According to Kelly, to capitalize on this phenomenon, you can start by expecting the unexpected, being open to surprises from sources within and outside your organization. Further on he explains:

“Try approaching projects with humility and the knowledge that answers may come from places you least suspect. We call this “looking cross-eyed” and “cross-pollination”. It’s quite liberating and powerful. If you expect to find answers from unusual places, it’s far more likely to happen. In nature, we know that cross-pollination leads to superior strains of plants. It’s the same with products and services. Launch a project with the assumption that cross-pollination may help you to innovate, and you’re more likely to be ready to take the leaps of creativity necessary for innovation”. (Kelley & Littman 2001, p.149)

As accidents happen and no one is able to be aware of them beforehand, Kelley points that serendipity (Roberts, 1989) plays a critical role in innovation. Serendipity Management as a new paradigm (see later table 1 in chapter 4) is something that Chesbrough’s concept of Innovation Intermediaries is missing. A big challenge is to provide a ground for the Openness explained by Chesbrough and Kelley. This is a question of the approach how to work in a particular company, but it is also a question of the surrounding business environment. If the existing business climate is welcoming ideas’ sharing and is favouring serendipity, then we can say that it supports Open Innovations. Another concept closely related to effective open innovations was presented in 2004 by Frans Johansson (2004) in his book “The Medici Effect”. He describes two types of innovations – intersectional and directional. Generating directional innovations is “business as usual”; leading organizations have well designed processes and environments to support these types of innovations. Although directional innovations are the norm, according to Johansson the potential for future breakthrough innovations is much greater in the field of intersectional innovations. There has not been much research or development on methodologies and tools in the area of intersectional innovations. It is evident that there is a business area emerging in this field. Though open innovation knowledge landscape does not necessarily assume intersectional collaboration, it might be very beneficial to aim at the diversity of participants of open innovation process. There are many challenges in trying to co-innovate with partners of completely different specialisation, but the results may exceed all the expectations. Open Innovation concept is implicitly present in the idea of Breeding Environments (BE).

“Virtual Organization BE represents an association or pool of organizations and their related supporting institutions that have both the potential and the will to cooperate with each other through establishment of a “base” long-term cooperation agreement.” (Camarinha-Matos, 2004)

To explain it briefly we shall share the vision of ECOLEAD, the leading EU project in the field of collaborative working environments (CWE):

“In ten years, in response to fast changing market conditions, most enterprises and specially the SMEs will be part of some sustainable collaborative networks that will act as breeding environments for the formation of dynamic virtual organizations.” (ECOLEAD 2004 - 2008)

Joensuu Science Park is a demonstration and research partner in ECOLEAD. Despite the parallel and independent development of both, ECOLEAD and netWork Oasis, projects, we came up with similar ideas about the BE, which provide a platform for fast and trustful collaboration. IPR issues are supported within the BE as well. In case of Open Innovation paradigm IPR questions are rising much stronger then in traditional closed innovation landscape. Ken Arrow noted first the problem called Arrow Information Paradox, when the customer is willing to know what the technology is and what it can do before buying it. But once he is introduced to the technology, the seller has transferred the technology to the customer without any compensation (Chesbrough, 2006). Innovation Intermediaries, definition introduced by Chesbrough, are one of the possible solutions to the problem of managing IPR and providing safety support for both parties. In case of the BEs acting as Intermediaries the environment provider should also take care of the challenges of Arrow Information Paradox.

Figure 2: U-theory. Source: Scharmer, C. O., Jaworski, J. Kahane, A., 2004.

Theories presented above clearly show that a lot of changes in social structures are emerging. Otto Scharmer has created together with Peter Senge, Betty Sue Flowers and Joseph Jaworski a theory called “U-theory” (Scharmer et al. 2004). On the Figure 2 some of the relevant elements of this theory are presented.

“The crisis of our time isn’t just a crisis of a single leader, organization, country, or conflict. The crisis of our time reveals the dying of an old social structure and way of thinking, an old way of institutionalizing and enacting collective social forms.” (Scharmer, 2006)

To enable the shift to Open Innovation society leaders need to take into account the five movements that follow the path of U-curve.

“Co-initiating: listen to what life calls you to do, connect with people and contexts related to that call, and convene constellations of core players that co-inspire common intention.

Co-sensing: form a core team and take deep-dive learning journeys that bring you to the places of most potential; observe, and listen with your mind, heart, and will wide open.

Co-presencing: go to the place of individual and collective stillness, open up to the source of creativity and presence, and link to the future that wants to emerge through you.

Co-creating: build landing strips of the future by prototyping living microcosms in order to explore the future by doing.

An Example of the U-Process of Leading Profound Innovation: One Process, Seven Elements

1. Co-inspire a core group

with common intent: clarify purpose, players

2. Foundation Workshop: Shared

understanding of purpose, process, roles & responsibilities

3. Deep Dive Learning Journeys:

Total immersion in relevant contexts 4. Retreat:

Synthesize learning journeys Create scenarios of emerging futures

Uncover common intention and commitment Crystallize vision and prototyping initiatives

5. Present and generate

commitment for prototyping initiatives

6. Prototype

strategic microcosms to learn by doing

7. Present results from

living microcosm prototypes

Co-sensing Co-presencing Co-creating

Co-evolving: co-develop a larger innovation ecosystem that connects people and their actions across boundaries through seeing and acting from the whole.” (Scharmer, 2006)

In the next chapter we shall describe in more details how the U-curve was experienced in building netWork Oasis BE in order to support Open Innovation in a wider meaning presented above, and how we shall go further with it.

4 Findings: netWork Oasis case

netWork Oasis in Joensuu Science Park, Finland, is an unique collaborative work, learning and development environment, where people from different organisations are working and interacting together in the same physical and virtual space. It was opened for pilot use in December 2006. The project has taken more than four years and from the beginning one of the leading principles has been “users as developers”. In conceptual planning the potential future users of Oasis had a key role and during the design and implementation phases open innovation principles were used widely. In this chapter we will present several findings while explaining “Oasis Journey”. There are a lot of similarities with an example of the U-process of Leading Profound Innovation described earlier in figure 2.

Figure 3. U-Curve: netWork Oasis adaptation – Oasis Journey

4.1 Co-sensing

The foundations for the whole netWork Oasis project were built in an Oasis Cottage Network project where the core team was formulated and the preliminary visions for further development created. At that point the ambition level and also the resources available were low but despite of that this first step was vital and it had to be taken, otherwise the whole journey would not have started at all. The starting point of the collaborative and multidisciplinary work on the netWork Oasis conceptual planning was the Kick-Off Meeting and Training Camp in February 2004. The message about planned Training Camp was given to those core tribe members found in Oasis Cottage Network project and their task was to introduce this idea to potentially interested persons in their personal networks. Expectations for 15 persons to participate were totally exceeded and the number of participants had to be restricted to 50 persons because of practical matters. Some of the

Oasis Seven Steps: “Oasis Journey”

1. Oasis Cottage Network

project

2. Training Camp and monthly

workshops during the first year

3. Valamo, Oasis Cottage Network

environments, outdoor activities, Oasis Tribe of diverse

professionals 4. Oasis Scenarios,

Oasis Vision, Concept creation,

Implementation plan

5. Business Day and FlexLab

opening

6. FlexLab pilot and Oasis

planning and design, updating the Oasis

Vision

7. netWork Oasis implementation

Co-sensing Co-presencing Co-creating

participants were three ‘handshakes’ away from the first circle. Persons from different backgrounds in the areas of science, art and business were present. The aim to get high degree of diversity was also perfectly achieved while the age diversity was from 20 to 70 years, geographical and cultural diversity – from Finland to New Zealand – and professional diversity – from entrepreneurs to students and from professors to corporate artists (Kakko & Lavikainen & Glotova, 2006). The goal for the Training Camp was to create a multidisciplinary planning group with abilities to work together towards the given vision. The goal was achieved by using personal networks in inviting people, forgetting the previous achievements of each participant (no CV’s), focusing on personal motivation, abilities to work in different groups and understanding the given vision. In all these areas this Training Camp approach turned out to be a great solution. The following workshops were organized soon after the Training Camp. In the first two ones the main aim was to create a shared understanding about the actions needed. A professional facilitator was used but some of the methods were developed while working. One very useful method was named as “Walk and Talk” where the beautiful surroundings of Joensuu Science Park were used for 15-20 minutes walks in pairs or threesomes. During the walk on lake and river shores some task was discussed and the results were then reported after the walk in the workshop premises. Some key values of Oasis tribe – like respect the serendipity and create co-discovery – were found and they were followed throughout the project, or as later noticed “journey”. The first cornerstones for Serendipity Management paradigm were also developed. This phase was also characterized not only by workshops but also by several social events, outdoor activities and visits to Valamo monastery. The later served as a preparation step for co-presensing.

4.2 Co-presensing

In the following events, workshops and intensive interaction in our Oasis Garden, interactive virtual environment, the focus was in crystallizing our vision and keeping the co-inspiration supported. Some serendipitous interactions happened also in this phase although the Training Camp was the real serendipity supporter. The journey was in these stages empowered with a lot of motivation and also very diverse ambitions. The big challenge here was how to manage the diversity and how to keep the shared understanding alive. One of the hardest tasks was how to get the focus towards the actual design and implementation and how to get some results as quickly as possible. The “brainstorming mode” was still on and it was a challenging task to change it via learning journey to piloting activities. The outcome was satisfactory but could have been better. The importance of getting something visible and something concrete created was immense. In our case it took too long to change from this co-presensing into the co-creating. Serendipity Management paradigm was further developed and documented. Especially the vital elements, like trust building and network incubation in order to create new combinations of competences, were tested. The decision to build a test environment, the FlexLab, was taken and it helped a lot in moving towards the next phase: prototyping and piloting. In our case we felt that although Scharmer et al are describing this U-Curve and the critical moments when getting connected to your higher potential in theory, the tools and usable working methods are not easily available. The facilitation with meditation and other unconventional business methods caused some anxiety and even disturbance in some personal interactions and that should have taken into account much more closely. Due to the financial reasons and tight schedule we were not able to use four-five day “solo

experiences” which referring to Scharmer have proved to be very fruitful in this phase. This deepest moment of the U-curve needs to be closer researched in order to find new tools and methods for business usage as well. For us the visits to monastery and various outdoor activities turned out to be the only ways to try to get connected to the highest potential.

4.3 Co-creating

Rapid prototyping and piloting the new methods in FlexLab testing environment enabled totally new ways of thinking. While working everyday in “Oasis-like”- environment with some real customers also involved the development group was able to get the feel and touch of the real world. This also turned out to be important for the designing of the actual Oasis. Some of the early layout plans were re-designed and the investment budget also re-structured. The result was a cheaper and also better functioning environment where the needs of everyday user are fulfilled. Although this co-creation phase is still on in the real Oasis environment now we have already started a new round of this U-curve process while ending up with the new vision of netWork Oasis. The vision for netWork Oasis now is:

“Joensuu region and netWork Oasis will be known in the year 2010 as one of the leading actors in designing and implementing productive Collaborative Working Environments (CWE) for open innovation. The research and development activities in this field have created a centre of competence which is connected to a network of Open Innovation Centres globally.”

So what actually happens is that this U-processes form a kind of a spiral with new co-sensing, co-presensing and co-creating phases. After four years of designing and planning activities and after the successful implementation of the first netWork Oasis environment in Joensuu Finland we are also able to summarise some of the differences between original Project Management and Serendipity Management which we have formulated and used throughout the Oasis journey (Table 1).

Characteristic Project Management Serendipity Management

Approach Project Journey, exploration

Type of innovation Directional Intersectional

Type of human resources

Homo faber Homo faber, Homo ludens, Homo aestheticus-informaticus, Homo Creativus

Organisation Fixed in the beginning Flexible during the process

Focus Effective process Best possible result in the end

Structure Closed innovation Open innovation

Mission Goal decided in the beginning Vision decided in the beginning

Competence search While defining the project Training camp approach

Resources, time schedule Fixed Flexible

Management style Command and control Connectivity and collaboration

Table 1: Project Management vs. Serendipity Management. A comparison of two management paradigms. (Kakko, Inkinen 2007)

5 Conclusions

Open Innovation paradigm should be widened to “Users as developers” principle and even towards Scharmer’s U-theory, where open mind, open heart and open will are the key elements in creating profound innovations. netWork Oasis in Joensuu Science Park is the first real attempt to create an environment which supports this wider open innovation paradigm in great extent. It is now open for real usage of everyday customers and will also serve as a perfect test-bed for open innovation related research in the future. During the design and implementation of Oasis-concept we found out that Scharmer’s U-Process of Leading Profound Innovation fits very well to our case, especially in situations where the focus is on totally new intersectional innovations. Further research and development is needed especially concerning the deepest moment of U-curve where you get connected to your highest potential. The tools and working methods should be also further evaluated and developed. While following our Oasis journey we were able to create the basic cornerstones of a new management paradigm: Serendipity Management. Some new tools and methods were designed and introduced namely Training Camp, “Walk and Talk”, various creativity supporting outdoor activities and also the “mind-shift” procedures between monastery, office environment and Oasis Cottage Network in wilderness.

Acknowledgement This work has been partly funded by the European Commission through ECOLEAD Project. The authors wish to acknowledge the Commission for the support. We would like to thank also the whole Oasis Tribe in inspiring us to make things to happen.

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