Executing an Open Innovation Model.
- 1. Jose A. Briones, Ph.D. Twitter: @Brioneja R&D Innovation Strategies & Process Excellence Summit Berlin, Germany November 11, 2016
- 2. www.Brioneja.com Twitter: @Brioneja Agenda Background Open Innovation Services and Software Case Studies: FVA Group of German engineering companies in the automotive industry – Dr. Frank Piller Smarty Ears Use of Open Innovation for Development of iPad Apps P&G Yesterday vs. Today www.Brioneja.com Twitter: @Brioneja
- 3. Acknowledgments www.Brioneja.com Twitter: @Brioneja Frank T. Piller RWTH Technology & Innovation Management Group, RWTH Aachen, Germany Barbara L. Fernandes CEO – Smarty Ears LLC
- 4. Objective Weigh the pros and cons of turning to a technology provider to help solve your OI needs Understand the landscape of open innovation intermediaries and platforms Make the most of your investment in an OI platform www.Brioneja.com Twitter: @Brioneja
- 5. Objective But which is the right method for open innovation? Which are the criteria to plan an open innovation project? Which intermediary or service provider has specific knowledge and expertise in, e.g., crowdsourcing, the lead user method, Netnography, idea contests, technology scouting, or broadcast search? www.Brioneja.com Twitter: @Brioneja
- 6. •“There’s a better way for management teams to grow their companies. But they will need the courage to challenge some of the paradigms of financial analysis and the willingness to develop alternative methodologies” Clayton M. Christensen www.Brioneja.com Twitter: @Brioneja
- 8. The Open Innovation Paradigm www.Brioneja.com Twitter: @Brioneja
- 9. Open Innovation Management What are the options to implement an Open Innovation program? Go at it alone: ○ Website and social media Engage an Open Innovation platform ○ Open innovation software ○ Open innovation services www.Brioneja.com Twitter: @Brioneja
- 10. Open Innovation Services vs. Software Open Innovation Services offer a communities of experts in a variety of fields. Problems are posted for a fee to get feedback from the community Open Innovation Software/Platforms relies in the company’s customer base and a broader reach www.Brioneja.com Twitter: @Brioneja
- 11. Open Innovation Services Source: Frank T. Pillerwww.Brioneja.com Twitter: @Brioneja
- 12. www.Brioneja.com Twitter: @Brioneja Case Study: Piloting open innovation (co-creation with technical experts) in the German industry Group of German engineering companies in the automotive industry: Suppliers and users of driving systems (gear boxes, power train , etc.), organized in industry association (called "FVA") Many of them are world market leaders in their sector Very engineering driven, successful, very "German" engineers. Typical example of "local search" ! Problem: For some technical problems, they did not find sufficient solution Project with our group: Pilot co-creation for technical problem solving ==> “We took some problems they could not solve before and "crowd-sourced" these problems to external problem solvers via an intermediary (broker)” Frank T. Piller RWTH Technology & Innovation Management Group, RWTH Aachen, Germany
- 13. www.Brioneja.com Twitter: @Brioneja Source: David Feitler 2010 In the project, we selected five problems from companies and the FVA research consortium to be "broadcasted" by NineSigma. Frank T. Piller RWTH Technology & Innovation Management Group, RWTH Aachen, Germany
- 15. www.Brioneja.com Twitter: @Brioneja The solutions in general were both from sources new to the companies and did contain a new technological solution Evaluation of solution proposals by project steering committees RFP Institution Solution Technology new known new known ? 66198 23 3 16 6 4 66204 10 0 3 7 0 66207 7 0 6 0 1 66201 33 2 22 8 5 Frank T. Piller RWTH Technology & Innovation Management Group, RWTH Aachen, Germany
- 16. www.Brioneja.com Twitter: @Brioneja Return on open innovation Data from VDMA project in textile machinery industry Direct cost of OI project € 18 000 ,- + approx. 2 person months Estimated value of realized solution € 375 000,- ROI : approx. 2000% Quality of solution: Fit to requirement: 89% in average of suited solutions Frank T. Piller RWTH Technology & Innovation Management Group, RWTH Aachen, Germany
- 17. Open Innovation Software Spigit SpigitEngage for Facebook, organizations can engage their customers in social co-creation by tapping customer insights through idea generation, free thought, campaigns, contests, and game dynamics. Ryma Ideascope integrates customer feedback with other systems like Help Desk, Customer Relationship Management (CRM), Demand Management www.Brioneja.com Twitter: @Brioneja
- 18. Open Innovation Software Imaginatik Innovation Central collaboration platform allows organizations to include or exclude whichever groups or individuals are most appropriate for the topic Nosco Idea management software Publish, rate and collaborate on ideas www.Brioneja.com Twitter: @Brioneja
- 19. www.Brioneja.com Twitter: @Brioneja Smarty Ears’ Open Innovation Program Smarty Ears is the largest app publishing company in the segment of speech and language development. Over 40 total Apps Most for iPhone and iPad but some for Android. Promotion is via Social Media and Website www.Brioneja.com Twitter: @Brioneja
- 20. www.Brioneja.com Twitter: @Brioneja How The Program Works Just like in traditional publishing, there are authors to books/therapy materials and there are publishers. Smarty Ears is the App publisher and the submitter is the author Submitters continue to own the idea and materials they provide, and therefore they get paid royalties for it. The final application, coding, and any art work developed belongs to Smarty Ears. Typical contract is 5 to 10 yearswww.Brioneja.com Twitter: @Brioneja
- 21. Royalties Authors receive a royalty of 5% to 15% on all sales for their app. The amount of royalty is decided based on Level of expertise Amount of material provided by you to us on the creation of the app Complexity of the application. Apps have name, bio, photo of author www.Brioneja.com Twitter: @Brioneja
- 22. Program Growth In the past Smarty Ears’ open innovation program was limited Apps that Smarty Ears could not do on its own because of lack of expertise. Today the program has expanded to include apps that Smarty Ears could do Looking for submitters that can devote the time to Co- development and not just submit ideas. Higher probability of success www.Brioneja.com Twitter: @Brioneja
- 23. Benefits of Co-Development Submitters are passionate about their idea They want it to be perfect Test with their heart Become the most effective salespersons www.Brioneja.com Twitter: @Brioneja
- 24. App Creation Flow Create mockup Create content Questions Select images Create flow of product Coding Bug testing iTunes description www.Brioneja.com Twitter: @Brioneja
- 25. www.Brioneja.com Twitter: @Brioneja Open Innovation Program Results ~10 ideas for new apps/month 1 out of 10 becomes an app. 10 new apps are a result of this process More apps to market - faster Recent app release from Open Innovation program “Fun and Functional” is currently on top 50 educational app list on iTuneswww.Brioneja.com Twitter: @Brioneja
- 26. Program Lessons Win-Win Scenario Not a one-time payment Both the company and the submitter benefit from the success of the product % Revenue sharing goes down if author does not participate in updates with content. Does not include bug fixing www.Brioneja.com Twitter: @Brioneja
- 27. www.Brioneja.com Twitter: @Brioneja P&G Connect and Develop – Model for Open Innovation Launched in 2000 P&G needs are posted on website in classified categories, and then anyone can propose their ideas and get assessed by a specialized team. By 2006, 35% of all P&G products had an external component vs. 15% in 2000 R&D productivity increased 60% www.Brioneja.com Twitter: @Brioneja
- 28. P&G Update – P&G CEO Lafley decentralized R&D, making business-unit heads responsible for developing new items. R&D chief Brown says that inadvertently slowed innovation by more closely tying research spending to immediate profit concerns. Between 2003 and 2008, the sales of new product rollouts shrank by half. www.Brioneja.com Twitter: @Brioneja
- 29. Keys to Success OI is a way to speed up time to market and increase probability of success OI includes sourcing for products, technology, intellectual property and ideas. OI is NOT outsourcing. OI requires constant interactions between companies and inventors. It requires huge partnering capabilities on both sides. OI will not decrease a company’s costs – it will only move it among line items. R&D budget may be less over time, but Legal and Business Development budgets will increase immediately. Source: Open Innovation – Paradigm Shift or Program? September 21, 2009 by Suzanne Harrison www.Brioneja.com Twitter: @Brioneja
- 30. Lessons Learned Using the right approach to open innovation is critical for success Depends on the type of problem/industry Open Innovation is NOT a substitute for R&D and a long-term innovation program Must use a non-linear management approach designed for radical or disruptive innovation, e.g. Spiral Approach www.Brioneja.com Twitter: @Brioneja Resources Resources TimeTime Level 1 2 3 VOC Idea Generation Technology Assessment Prototype Development Customer Testing Business CaseValue in Use Analysis Regulatory IP Strategy Supply Chain Analysis Roadmap/Timeline Risk Analysis The SpyroTek™ Method for Innovation Management Launch Quadrant I Quadrant IIQuadrant III Quadrant IV Twitter: @Brioneja www.Brioneja.com
- 31. Questions for the Panel/Audience Q1. What is the "customer job" (Clay Christensen sense) that needs to be filled by innovation management software? Q2. Which employees are "right" for participating in the innovation process? Q3. How do you find high potential ideas from a high volumes of them? Q4. What are some models for engaging employees in a process that falls outside their "day jobs"? Q5. Isn't this a popularity contest for ideas, and what company would operate that way? www.Brioneja.com Twitter: @Brioneja
- 32. Questions for the Panel/Audience Q6. What does it mean to "evaluate" an idea? Q7. How to say 'no' to an idea, and not discourage future participation? Q8. What are some best practices for running an employee innovation program? Q9. What about expanding beyond employees, and bringing customers directly into the innovation process? Q10. Where does a crowdsourced innovation management platform fit within the enterprise software ecosystem? www.Brioneja.com Twitter: @Brioneja
- 33. Resources Making Open Innovation Work. Author: Stefan Lindegaard Open Services Innovation. Henry Chesbrough A Guide to Open Innovation and Crowdsourcing. Paul Sloane The Open Innovation Marketplace. A. Bingham and D. Spradlin Open Innovation – Paradigm Shift or Program? September 21, 2009 by Suzanne Harrison Innovation Killers, 2008 - HBR http://hbr.org/product/innovation-killers-how-financial- tools-destroy-you/an/R0801F-PDF-ENG?Ntt=innoation%2520killers The Market for Open Innovation – Frank T. Piller, K. Diener The Spiral Approach to Disruptive Innovation Management. Jose A. Briones. www.Brioneja.com Twitter: @Brioneja
- 34. Acknowledgements Thanks to Smarty Ears, LLC for allowing me to be part of this exciting new field of product development www.smartyearsapps.com www.Brioneja.com Twitter: @Brioneja
- 35. Contact Information Jose A. Briones, Ph.D. Brioneja@SpyroTek.com Twitter: @Brioneja www.Brioneja.com www.Brioneja.com Twitter: @Brioneja