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LEAD Innovation Blog

Read our latest articles on innovation management and innovation in a wide range of industries.

Date: 04-Oct-2018
Posted by: Angela HENGSBERGER
Category: innovation process

Best Practice Open Innovation - this is how the best are doing it

 

Open Innovation is the opening-up of innovation processes in order to allow ideas, new technologies or feedback from external partners to flow into the company. There are a variety of ways to achieve this, whereby the individual possibilities and requirements of a company are always to be considered. The following selection provides an overview of best practices on Open Innovation from Crowdsourcing, through the research network to the start-up challenge.


Open innovation and benefits

Open Innovation is the targeted opening of the innovation process to the outside. External partners such as customers, universities, research institutes, suppliers or start-ups are involved in the process of developing ideas and new products and services.

Paper Innovation process
On the other hand, if companies were only to innovate with the internal experts, they would have a smaller, restricted solution horizon. The advantages of Open Innovation are therefore access to

  • More and more innovative ideas, for example through the different perspectives and expertise.
  • Knowledge, for example about customer needs and markets.
  • New technologies and expertise on solutions.

But not only access alone is an advantage. In addition to increasing the quality of innovation, for example:

  • Faster development times, as the expertise is already available and does not have to be built up.
  • Lower development risks, since they are e.g. Through joint ventures or through work with experienced know-how bearers.
  • Potential for public funding through cooperation in R & D consortia.

 

Types of Open Innovation

In principle, there is a classification according to the direction:

  • Inside-Out Open Innovation: Internal knowledge and inventions are utilized to external partners, e.g. Own patents are granted to partners against licenses.
  • Outside-In Open Innovation: Ideas and inventions are integrated externally into the company and the innovation process.

Outside-In Open Innovation is the opening of the innovation process for external stakeholders in order to get market information, ideas, solutions, technologies or feedback. The goals embrace

  • Search for ideas and impulses for new products and services through, for example, crowdsourcing, ideas contests or lead-user workshops.
  • Joint development of new technologies and innovations, such as research cooperations or co-creation with customers.
  • Feedback on new innovations is gained by the opening up of the innovation processes as early as possible, especially by customers through concept and prototype tests.

 

Open innovation - so make it the best

There are many best practices, but there will be no best practices that can be successfully applied to any business. For Open Innovation, each company has individual requirements that are dependent on, for example

  • Technology or market drives,
  • B2B or B2C,
  • Fast - paced industry, or
  • Complexity of applied technologies and competences.


The possibilities are also different, especially regarding the available resources. A billion-dollar group like BASF has other options than a medium-sized company.

But what all have in common is the necessary foundation of open innovation strategy and culture.
Open innovation culture and strategy as a foundation

To be among the best, it requires a clear strategy on open innovation and a culture that allows and promotes the opening of the innovation process.

An Open Innovation Strategy defines the objectives and the orientation of Open Innovation activities. The following questions must be clearly answered:

  • What do you want to achieve with Open Innovation?
  • Which corporate goals does Open Innovation support?
  • How to operate Open Innovation, e.g. Inside-Out and / or Outside-In?
  • What opportunities would you use like and why?


In order to successfully operate Open Innovation, it is also necessary to have a suitable innovation culture. Employees and innovation managers must be open to new developments from the outside. The not-invented-here syndrome, where knowledge and ideas are ignored or rejected from the outside, must have no place.

Open Innovation is also a setting where you can keep your eyes open and open to discover potential for new innovations outside the company, whether at conferences or surfing the Internet.

Examples and Best Practices on Open Innovation

Crowdsourcing

Through the development of the Internet to the Web 2.0, crowdsourcing experienced its boom and many new opportunities arose. Through Internet platforms, it was simply possible to involve a large number of customers, users, inventors and innovative people around the world in the innovation process.

The type of integration ranged from "just" submission of ideas, to the evaluation of ideas by the community on the platform, to the further development of ideas by the community.

There are three types of platforms for crowdsourcing:

  • A company operates its own platform, as does the Austrian railway company ÖBB.
  • Then there are platforms that connects companies and innovative people. Enterprises are challenging and everyone can contribute their ideas. There are platforms like innocentive.com, which are very focused on technical solutions and like atizo.com, which is more specialized in consumer products. The difference here is the composition of the community regarding their expertise.
  • There are also independent platforms such as quirky.com. There anyone can submit ideas that are further developed by a physically striking community and are marketed by the platform itself.

All initiatives can be temporarily limited, a challenge to a specific questionnaire, or be permanently open.

 

Open innovation initiatives

Crowdsourcing initiatives are usually temporarily limited and encompass a challenge where a solution is sought for a specific question.

However, companies also operate permanent open innovation platforms, such as Procter & Gamble (P & G), which call on their website to submit patents that can satisfy a current customer requirement. P & G is pursuing its Connect & Develop strategy instead of Research & Develop, where new technologies are integrated from external research.

BASF also stands out for open innovation processes and is looking specifically for partners via its website under "Open Innovation". Anyone who can contribute to one of their given topics can register for a partnership.


Innovation with customers

Customers and users are the most important source of innovation, because their experiences and wishes are important impulses for new products. It is not simply a question of market research where their needs are questioned, but their specific integration into the ideas development process.

With the LEAD User Method, very innovative users and experts are integrated into the innovation process through workshops. Not only will users and customers be integrated from their own market, but also lead users from analogous industries that have to deal with similar challenges or technologies. The solution horizon is thus opened very wide and is the basis for an innovative solution. Companies such as Wacker Chemie, Gardena, Liebherr and Phillips apply the method successfully.

Design Thinking is the innovative method that currently affects many people. The method is characterized by the extreme user orientation and the very early integration of users in the testing of ideal concepts. It is thus also a method of open innovation and we successfully applied by start-ups and successful young companies like Uber or Google.


Feedback on innovation concepts and prototypes

Test stores and future prospects are used to test new concepts and early prototypes in practice or in theory with potential customers and to gain feedback.

This gives information on new innovations to the outside at an early stage and also arouses the competition. Many companies are afraid to be copied or blocked. But in the end, the value of the early customer feedback is overwhelming, you simply have to act quickly enough.

Deutsche Telekom operates the future forum T-Gallery, where use cases of the future are developed and presented in order to receive feedback from customers and partners.

In the auto industry, car clinics are popular. There you can test new cars in prototype status. An independent market research institute then captures feedback on image, quality or design.

Until 2012, the Metro Group maintained the real,- Future Store, where new technologies and concepts were tested for the retail trade.

Research and technology networks

Many companies in the high-tech sector such as electronics or chemistry have established research networks. Innovations do not arise in the cooperation with a single partner, but in the interaction in a network of partners. In particular, new technologies are also being researched. The paper producer Mondi is strongly active in research networks in its innovation activities.


Start-up cooperations

Finally, the most popular trend in Open Innovation. Cooperation with start-ups is particularly important for companies that have high potential through digital transformation. Starting start-up challenges, such as A1, the Verbund or Raiffeisen launched, are looking for start-ups that have relevance for their own business. This results in many advantages, such as

  • Fast access to know-how about new IT technologies,
  • Access to creative minds and thus new possibilities, and
  • Rapid implementation of innovations through start-ups.

Conclusion - Best Practice Open Innovation

Open Innovation offers a variety of opportunities for any type of business and innovation projects. Open innovation is not something that is reserved for the big corporations with million budgets for innovation. The important thing is that there is a clear open innovation strategy and that company's innovation culture is ticking open.

7 methods for idea generation

Angela HENGSBERGER

Born and raised in Vienna. For more than 6 years she has been in charge of Business Development at LEAD Innovation with the functions marketing, sales and communication.

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