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Editor's Note: The following post comes to us from Kevin McFarthing, an open innovation expert. McFarthing discusses the challenges of implementing open innovation strategies and the role that an open innovation integrator can play to mitigate some of those problems. The post originally appeared on the site Innovation Excellence, and we are reposting it here with the author's permission.
Open Innovation seeks to expand a company’s innovation possibilities by accessing ideas, technologies, products and even routes to market using external partners. Along with the opportunities come plenty of challenges; for example Intellectual Property (IP); the degree to which both partners profit from the alliance; “NIH”; and many others all need to be overcome.
Often, two partners will find their cultures and ways of working are incompatible. This can happen when one partner is a large company and the other is a small-to-medium sized enterprise (SME). The SME is used to making relatively quick decisions, working with limited resources and reacting rapidly to changing situations. The large company may have a greater need for consultation before decisions are taken; even though they may have much more resource, it is usually spread across many categories; and they take longer to react.
Larger companies usually have more standardization around operating procedures; the US company Danaher even has its own system that meticulously documents every process, the Danaher Business System. This kind of approach can be seen as over the top by SMEs, if for no other reason than they don’t have the time to document any but the most essential processes.
Even if there aren’t major cultural mismatches, communication issues can arise. These may just be simple misunderstandings over terminology. If left unresolved, they can become issues that threaten the success of the venture.
Of course the company who is taking the product or service to market should have the predominant say in how the project proceeds and the innovation is developed. They are the ones who are customer-facing and who will take the flak if something isn’t right. They will usually be investing the majority of money in getting to market, and probably taking most of the returns. In most cases, this will be the large company. This does not mean that they should post the process book to the SME with a covering note saying “please follow”.
These areas of potential failure in projects and relationships are where the role of the Open Innovation Integrator in the large company can be very useful.
The Integrator is the person who understands how their own company works; how the SME’s offering fits with the large company’s “wants”; what elements of the project are flexible and which aren’t. They are the ones who should get to know the SME the most, to understand their business and especially their culture. They integrate the partner into the project and their company. The degree of integration will primarily depend on the role the partner plays in the project and the number of areas of the large company with whom they interact.
Another way to look at the role of the Open Innovation Integrator is that they are the two-way ambassador; first for the partner to their home company; and second for their home company to the partner. They are there to represent the partner’s interests to ensure that true “win-win” relationships are developed.
Last but certainly not least, the Open Innovation Integrator should be the “go to” contact for the SME in situations where anything is unclear. They are often the primary contact within their own company when issues arise, ensuring that things go well.
Choosing people as Open Innovation Integrators needs careful thought. They are often people with a classic “T” profile – a broad experience and knowledge allied to a depth of expertise in a small number of fields. They are excellent networkers, and possess the social skills and empathy to understand the human side of relationships. Quite often Technology Scouts are the best people to be the Open Innovation Integrators as they usually have a similar profile.
From the perspective of both companies, if a partner is passed from one department to another as a project progresses, time and effort will be wasted. Instead, companies should ensure the Open Innovation Integrator is always available to help smooth the way. Once the project is finished, the knowledge gained about each other will help the next project happen more easily. But don’t become complacent; make sure the Open Innovation Integrator is still available.
- Kevin McFarthing runs the Innovation Fixer consultancy, helping companies to improve the output and efficiency of their innovation, and to implement Open Innovation. He spent 17 years with Reckitt Benckiser in innovation leadership positions, and also has experience in life sciences.