Organizations that want to stay ahead of their market, can’t just rely on own internal knowledge and resources.

Collaboration across the boundaries of their organization is an important driver for innovation.

In recent years we have seen a wide range of “Open Innovation” tactics emerging. There is no single solution to innovation. Large companies are more and more open to opt for a diversified Open Innovation policy that is built around different instruments to stimulate bringing the outside-in:

  • Cooperation with start-ups is particularly interesting for companies that are looking for accelerating their digital transformation. Organizing start-up challenges or pitching sessions allows them to find start-ups that are relevant for their own business. Collaborating with start-ups allows corporates to gain fast access to know-how about new IT technologies and to the rapid implementation of innovations through start-ups.
  • Collaboration with incubators and accelerators provides corporates the ability to outsource their open innovation activities. Corporate outsourced acceleration programs create the optimal conditions for moving closer to innovation while leveraging external resources for scouting of and co-creating with start-ups.
  • Organizing hackathons is a great booster of creativity. It allows corporates to experience the power of cross-disciplinary collaboration. Hackathons are limited in time, facilitating in parallel several diverse teams to work intensively on innovation with the goal to create a prototype. The most viable ideas will be selected to elaborate further after the hackathon.
  • If companies don’t want to bring startups in-house, they can go out into the world. Corporate leaders organize innovation excursions to meet startups and businesses that they think are leading the way in a particular market or technology. The team will find inspiration to take back and share with their colleagues
  • Disruptive innovation doesn’t necessarily happen around corporate headquarters. Corporations, therefore, establish “antennas” for (open) innovation in regions where things are happening, such as in Silicon Valley, Tel-Aviv or Asia. These antenna offices allow corporates to emerge into the local ecosystem, to host events and interact with local partners and startups, linking back to the internal accelerator program. The aim is to be a pioneer in the field of innovation.
  • Corporate venturing allows corporates to fully understand innovation by having a stake in companies doing what they are interested in. Investing in startups help companies understand the space startups are in, stay updated and eventually guide the development of a technology, product, or service.

What is Open Innovation?

In 2006, Chesbrough defined open innovation as a “paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as they look to advance their technology”.  More recently, it is defined as “a distributed innovation process based on purposively managed knowledge flows across organizational boundaries”.

If corporates want to innovate products, services, business models or processes effectively, they can’t just rely on internal knowledge, sources and resources. A separate and isolated R&D department is no longer sufficient. On the contrary, the boundaries of knowledge and creativity must be pushed.

Open innovation embraces the outside-in approach, opening the innovation process to external stakeholders in order to get access to market information, new ideas, innovative solutions, emerging technologies and creative individuals. The combination of internal R&D with open innovation provides a pathway to sustainable innovation resulting in tangible business results.

Organizations should not hesitate to leverage the added value of people from outside to accelerate their innovation activities. Openness and collaboration have always been a necessity for small companies to stay agile and move fast. Nowadays large multinationals actively invest in building their innovation ecosystem, a network of diverse players eager to collaborate and share knowledge.

What are the benefits of Open Innovation?

The benefits of open innovation are hard to deny. Collaboration usually leads to the discovery of totally new concepts, ideas, and technologies. Partnerships allow experimenting by using existing technology of other organizations. By calling on partners with additional expertise companies can drastically shorten development time. Moreover, they share costs if they collaborate with other companies. If not, they fail fast and they fail cheap.

Contributing to an innovation community and having connections with various external actors (such as suppliers, customers, universities and startups,…) results in the following benefits:

  • Access to a wider pool of talent
  • Higher accuracy in market research and trend analysis
  • Opportunity to work with exciting startups to speed up digital transformation
  • Collaborations with like-minded organizations, researchers and technology providers to achieve innovation that they can never handle alone
  • Cross-innovation with individuals and organizations outside the industry or sector can lead to entirely innovative ideas
  • Eeduced cost of conducting Research and Development
  • Faster go to market

 

How to Ensure and Measure Impact of Open Innovation

Opening up a company that is used to conducting innovation in-house to third parties, requires resources, tools, and processes.

The open innovation process needs to be carefully planned, well managed and properly executed, in order to make sense of all the opportunities, partnerships, ideas gathered during conferences, excursions, and hackathons. Open innovation is a complex endeavor with many moving parts. It is important to be open to rethink current ways of working in order to be able to apply open innovation successfully.

Ecosystem Intelligence platforms, such as DataScouts, facilitate the different aspects of managing open innovation. They:

  • Manage all contacts and organisations that are relevant to the innovation ecosystem
  • Automate tech scouting and innovation watching by systematically scanning for relevant innovators
  • Build a knowledge base, tapping into the collective intelligence of the innovation ecosystem
  • Streamline the match making process with exciting startups and partners from screening, to understanding and finally collaborating
  • Benchmark performance of startups with relevant portfolios of similar tech companies
  • Capture trends, early signals, emerging technologies, (hidden) relationship in time

It is important to know whether open innovation efforts are working or not. With that in mind, companies develop dashboards with the top metrics they assess performance by.

Increased revenue generated by new products and services is not surprisingly a top key performance indicator. Nevertheless, it takes time to turn a new idea into a revenue generating product and even more to scale a corporate startup. Basing program success on ROI too early, rather than dedicated innovation KPIs, will not yield an accurate representation of progress. Therefore, it is important to measure progress in terms of:

    • operational efficiency of (open) innovation management
    • speed of screening opportunities and closing partnerships
    • strategic fit of projects in the innovation pipeline
    • time to market for new products, services, business models, processes

Models for Successful Open Innovation

Collaborative product design and development

“Most innovations fail, and companies that don’t innovate, die”

Companies are continuously looking for ways to improve their organization, optimize cost and realize growth. Corporates applying open innovation are better equipped than the competition to meet the many challenges that digital transformation presents. One of the benefits of collaborating in an open innovation setting is that they get access to innovative products and solutions that might fit specific needs given some adaptions.This approach enables co-developing a use-case specific product by inviting contributors to access and exploit the initially available solution. The goal is for the contributors to extend the product’s functionality while increasing the overall value of the product for everyone involved.

ING Innovation and DataScouts entered such a collaborative design and development process. The end product allowed ING to gather meaningful account insights when building their open innovation ecosystem and approaching the tech sector with a new service offering. Innovation Expert Stéphane Leliaert explains: ”To detect potential opportunities. DataScouts puts all relevant actors on a map and helps to gain new insights on the ecosystem. That’s how we discovered areas − that weren’t on our radar before − where it would be interesting to look for new partnerships”.

Sector oriented Innovation networks

Contributing to open innovation networks allows organizations to get in touch with customers, suppliers, technology providers, experts, soul mates, and many others. The innovation network taps into the collective intelligence of its members. It allows to conduct more accurate market research, get access to early signals, trends and emerging technologies. Enthusiastic members of the community are always willing to devote time and ideas to help. These relationships are crucial to build a strong community.

Forward Fooding is such a global network of entrepreneurs. They are on a mission to foster food innovation in order to redesign our food system. To build a better food system within the next few decades, both startups and corporates must get involved. The power of collaboration begins with teamwork, partnership, and cooperation. They developed the FoodTech Data Navigator to their collective intelligence tool. It helps to navigate within the Agri-FoodTech ecosystem. To conduct research, to uncover trends, to develop forward-looking insights. To discover the latest companies and investors entering and exiting this dynamic new landscape. It captures the latest startup companies, investors, accelerators and incubators. It tracks and delivers insight-rich data. They believe that the “contamination” between ‘foodies’ and ‘techies’ can inspire entrepreneurs to build truly digital brands. They help them to create thriving businesses.

Building a strong internal innovation community

It is imperative to make innovation a legitimate part of how a company does business. Innovation is about running an entire business instead of being a side-game. Therefore Innovation Managers need to find internal allies and building their internal innovation community. By doing so, they create a space for innovation in strategy, in budgets, in the org chart and in operations.

Roche Diabetes Care analyzes and monitors the innovators in the diabetes scene around the world. Their central open innovation platform allows business developers across the globe to score potential innovations, share their insights and feedback. The platform lists all known diabetes solutions, captures publications, articles and social media posts. The open innovation funnel is visualizing their operational efficiency in screening new opportunities. Finally, Roche Diabetes Care can easily analyze how startups and scaleups in the ecosystem evolve.

Government driven cross-disciplinary collaboration

In an age of rapidly changing technology, fashion – like almost every other industry – is re-inventing itself. An EU-funded consortium, WEAR, has been playing its part, bringing together the high-tech and fashion industries to address ethical and environmental concerns.

WEAR Sustain engaged creative professionals, designers and artists across Europe, sharing knowledge to co-create and market the next generation of wearables. The initiative has brought together 46 teams of designers and scientists to develop fully functional prototypes of wearables. All projects, says senior researcher and WEAR project coordinator Dr Heritiana Ranaivoson, were chiefly selected on how they respond to challenges related to ethics and sustainability. The outcome of their experiments, best practices and relevant resources are shared in the online knowledge platform, WEAR Sustain, leading the way in ethical and sustainable wearable technology innovation. WEAR Sustain provides access to a strategy toolkit helping set guidelines and best practices for design, materials circularity and product life-cycle development.

Consortium partners, as well as industry players, continue to bring a deep motivation and passion to influence and change industry practices.

Conclusion

Open innovation is not a new idea. It has become a popular aspect of the innovation value chain, where more and more organizations learn to innovate in an authentic way. Open Innovation, the outside-in approach and the management of a growing network of internal and external partners has become mainstream.

With the right resources, tools and processes, the resulting products and services not only make it to market faster but often satisfy unmet or unrealized needs better than would the products of internal-only innovation.


About DataScouts

We Connect Data (WCD) is a Data-Driven Business Development company. Our mission is to help clients develop their businesses and grow market share in today’s fast-changing and thus less predictable business world using relevant, timely insights based on actual data.

DataScouts© is a cloud platform developed and commercialized by WCD, providing an AI-enabled workflow to collect, aggregate and update market and company information

With Roche Diabetes Care, ING, ClearChannel, EIT Health, Port of Antwerp, EY, City of Lisbon and City of Ghent as customers, We Connect Data (WCD) has built profound expertise in providing live data streams and AI-enabled workflows for

  • Stakeholder Mapping, Competitive Analysis and Ecosystem Intelligence
  • Account-Based Marketing & Sales Enablement
  • Innovation Watching & Tech Scouting

Contact
Ingrid Willems
E: Ingrid.willems (at) datascouts.eu
URL: www.datascouts.eu