NESTA Connect

Counter-Intuitive Innovation

  “The only thing harder than starting something new, is stopping something old.” Dr. Russell Ackoff

There is a small but persistent minority of people I talk to about open innovation that quickly dismisses it as obvious, usually very politely, and claim it's just what organisations have been doing for years. However the more I think about it the more I firmly believe that open innovation is highly counter-intuitive which is why it remains somewhat marginal.  To illustrate the point here are  some traits of open innovation  which often pass people by so I feel compelled to capture them in this post.

1.  Start At The End.  

Without a clear vision for the sort of relationships you're aiming for, you can forget about asking potential collaborators for their skills, ideas or resources.  You need to show that you are serious about collaboration and that means being clear about the time, money and appetite you have to see a potential partnership though to the end. We would always recommend starting at the end, with a win-win business model.

2.  Buy From Your Customers

How many of your customers are inventors too?  Organisations tend to think of customers as primarily recipients of products and services however they are often amazingly knowledgeable about your brand and sometimes it makes clear business sense to buy from them as well as sell to them. This two-way flow of value is too often overlooked.

3.  Show Not Tell

Many large organisations are trying to become open innovators by first trying to change their culture. Whilst this is rational, it rarely seems to work.  Companies will often change their ways of doing things more happily and spontaneously if they see first-hand evidence of colleagues adopting a new approach and it working.  Success sells. 

4.  You Will Never Spot a Winner.

Ok you might sometimes, but lateral leaps only become obvious with the benefit of hindsight. Some of the best collaborations we've been involved with now seem perfectly natural but I cannot stress enough the challenge it was in getting there.  Great new ideas don't actually have to make complete sense at the start.  If there's something there that's conceptually exciting there are plenty of rational process you can apply later.  Killing a good idea and new relationship off too early is a dangerously easy trap to fall into - who will ever know it would have made millions?

5.  It’s Not Who You Know, It’s Who Knows You

There is a lot of discussion about networked effects and  it's valuable to have a large, diverse and engaged network. However the real key is for people to approach you first with an opportunity before they go to your competitor. Their incentive will be financial but much more important that that is the ease with which they can find you, understand what it is you want and understand that you really would value doing business with them.   

Open for Business Conference

 

Many thanks to everybody who responded to a previous post asking 'Who are the best open innovation speakers globally?'. We have taken on board your feedback and I'm pleased to announce that on the 8th of April, NESTA is hosting the Open for Business conference in London that will explore new open business models and seek to answer the issues that lie at the heart of the open innovation process.

The interactive day will feature Open Innovation experts, experienced practitioners and a host of real-life NESTA case studies including Procter and Gamble, Discovery Channel, Virgin Atlantic, Oracle, Orange, Cancer Research UK, Littlewoods, McLaren and Tesco, and international speakers such as Helmut Traitler, Vice President, Innovation Partnerships, Nestle; Steve Shapiro, VP of InnoCentive; Karim Lakhani, Assistant professor, Technology and Operations Management Unit, Harvard Business School; Joachim Von Heimburg, former Innovation Director at P&G and Sir John Chisholm, Chairman, QinetiQ.

Much as we'd like it to be entirely open to all, due to capacity constraints at the venue this event is invite only and targeted specifically at senior decision makers from FTSE500 companies and other similar large organisation with a specific interest and/or responsibility for open innovation or open business models. For those unable to attend in person we will livestream and webcast all of the main sessions and make them available online.

If you are intrerested in attending and to register your interest in the event, please email the Nesta events team as soon as possible.

A Quantum Theory of Networks

 

This week I've had a tremendous series of conversations based around the power and pitfall of innovation networks. Everyone I spoke to recognise their importance but few people - myself included - understand them or know how to harness them. Let me tell three quick, and mostly personal stories, to illustrate what I mean.

Story 1 - Square Pegs/Round Holes

The first story comes from my first job out of University, where I worked for a medium sized research and development company with an impressive history of innovation. It had (and still has) about 300 very smart people scattered across lots of small labs and offices in 6 separate buildings on a large industrial site. People generally had little idea what research was happening elsewhere in the company to any significant degree. This was in the mid-90s so the web was a mere baby compared to what it enables now.

One guy - let's call him Tony - was in his mid to late 50's and spent the majority of his time walking between the different buildings and labs chatting to people, having a coffee, enquiring about their research, and inevitably giving some useful suggestions as to what they might try next and who else within the company they should talk to. Now Tony had quite an impact on me personally and I was in no doubt whatsoever that he added tremendous value to the business in linking up disparate bits of research or science happening within the same organisation.

Now at the same time the new incoming senior management in the organisation were trying to move to a more consultancy based business model where our time was allocated to specific projects and therefore your utilisation became a key metric. Now Tony's 'utilisation' was low, partly, I suspect because he wouldn’t 'play the game' and was partially contrary by nature. Anyway I'm sorry to say that Tony was 'removed' from the organisation fairly rapidly as he couldn't immediately demonstrate his immediate value to the organisation. There may well have been other factors at play that I wasn’t aware of but I felt strongly then, as I do now, that this was a short-sighted decision made by measuring the wrong thing.

Story 2 - The Buzz of Brokerage

Secondly, I learned this week about two new innovations that are coming to market that we in the Connect team at Nesta had a direct hand in creating as we hosted the initial programmes where the collaborators got together and developed the initial proposition. One is a major collaboration between two multinational companies, and the other is a small licensing deal between an inventor and a bigger company. We got a tremendous buzz from hearing about both of these collaborations knowing that we had helped to make them happen.

Now the (literally) million dollar question is, what is the mechanism by which we could find efficient way take 0.1% of the value created? Interestingly - and I'm not that surprised or too bitter about this - in both cases the people involved had either partially or entirely forgotten that we had brought them together in the first place, and therefore securing that 0.1% from them is unlikely ever to work.

Anyway, like a pub landlord, I get a real kick out of knowing that people have made a connection in ‘our establishment’ and I think most 'brokers' do too because they are almost hard wired to make (often lateral) connections. A friend of mine who is a great broker can't help bring people together and doesn't particularly stick around or care what happens. I think he has, at an unconscious level a heightened perspective of influence, knowledge and power and how it flows.

Story 3 - Cash-mobs and Collective Action

My final story comes from Rory Sutherland, VP at Ogilvy who wrote a great blog post about collective action. In speaking to him about it afterwards he told me about the train station at Haywards Heath where the car park is right next to the train platform, but on the other side of the tracks. Instead of it being a short hop over to the platform from the car park, one has to walk a quarter of a mile to a bridge to get over to the station.

Now Rory’s solution was as follows. What if some or all of the 500 or so people who park regularly in Haywards Heath station each contributed a small amount of money, say £10 a year, so you could quite rapidly get the (say) £50,000 it would cost to put a bridge between the car park and the station, thereby saving commuters lots of valuable sleep and work time.

This makes almost too much sense to me but there is limited way for people to coordinate themselves to get such an initiative underway. He goes on to argue that brands may play a coordinating and underwriting role in getting such ‘public goods’ commissioned. I’m not sure about the role brands can play here but surely the tools exist right now for these ‘cashmobs’ (as opposed to flash mobs’) to come together.

A Quantum Theory of Networks?

Finally some of my Research and Policy colleagues at Nesta have recently done some, as yet, unpublished research into innovation networks and have developed a really useful framework for understanding them, which I’m convinced will be extremely useful.

However I’m also reminded of my quantum physics classes at University that taught me that particles exist in a sort of ‘wave of potential positions’ until observed at which point the wave collapses into a specific location. I think business or innovation networks work in a similar way. There are multiple potential collaborations, connections, marriages, divorces that exist at any one time, but they don’t stand up to too much scrutiny or measurement either. Most organisational or government attempts to support or develop networks fall flat in my experience as they are almost certainly too formal.

In a similar way pubs and clubs are places that spawn numerous relationships but you don’t measure their success based on the number of marriages, or divorces, they have initiated. Nor would the landlord expect to be invited to the big day. Rather we have a handy proxy namely income from behind the bar minus costs, which is all you really need to know about how successful the establishment is. Therefore I think we need a much more simple and/or subtle way to support, measure and understand networks.

I challenged my research colleagues asking them ‘What’s their big idea?’ (which I recognise is quite possibly not terribly helpful). All I can offer is that, when it comes to innovation I think we are looking and spending money in the wrong places. Rather than mostly investing in ideas or individuals which always distort markets, we should be investing intelligently in connecting people which create new markets. Invest in challenges not ideas and processes not events as Steve Shapiro has recently written here. The people with the power, money, or ideas, aren’t the same, so if we can spot the gaps and the connections between them then we are definitely on to something big.

So What?

I offer these stories as a starting point for a conversation and I don’t claim to have any tangible conclusions – sorry about that. In many ways I've become rather like Tony (from Story 1) myself through my work at Nesta, where we bring diverse groups of people and organisations together to see what they might create together. And ironically, I've worked with and for, lots of organisations who try to deliberately create the role of 'Network Manager/Director' with often dismal results.

I am convinced that networks are increasing in importance. Our competition or our next big opportunity can increasingly come from anywhere, so as I’ve said before we need to get much better as individuals and as organisations at building our big ideas networks as Linda Gratton from LBS calls them, and spotting what’s popping up in our peripheral vision. And, whilst the web is a tremendous tool, I still think there is no substitute for face-to-face interactions. In open innovation it’s about your perception as partner of choice and this is simply about being straight forward, decent and pleasant to work with.

Anyway, as ever I would value any feedback, conversations or suggestions. Thanks for reading to the end!

The internal challenge of open innovation

I tweeted the other day that "ironically the biggest challenge of open innovation seems to be internal". This tweet was prompted by several conversations with people within large organisations with a responsibility for open innovation.

In talking to them it was clear that they spend most of their time trying to persuade, cajole, tempt or force their colleagues/managers to partner with external people or organisations, despite it being part of the organisational strategy there remain powerful structures or forces, both formal and informal, to prevent this happening.

My colleague David Simoes-Brown likes to say that open innovation professionals are on the 'fringe of the fringe' of their organisations. By this he means that innovation teams, if they exist, tend to be fringe departments as they are about disrupting or evolving the status quo, and open innovators are on the fringe of the innovation departments. And this is not necessarily a bad thing, but cements the challenge of building credibility within, before or in parallel with building credibility outside.

The open innovation professionals whom i've worked with who are most successful work just as hard, if not even harder, to network within their organisations to find the right people to be able to make a deal happen once they've sourced one externally. And tools like twitter are, in part, so exciting to me because they form a wonderful shortcut into organisations bypassing existing channels or opening up entirely new channels of communication that didn't exist previously.

As ever i'd be interested in other peoples experiences or views of the internal barriers to open innovation.

Who are the best open innovation speakers globally?

We are planning an international open innovation conference in March called Open for Business. We asked our network who they would you recommend as a great speaker or who they would really like to hear from? We also asked them to think big! We were overwhelmed with an amazing response and thanks to everybody who contributed so far. I thought I'd share the list below as it is diverse as it is interesting:

• AJ Lafley - P&G
• Alex Osterwalder - Business Model Generation
  
• Ana Maria Llopis – CEO Ideas4All
• Andy Gibson – School of Everything
• Ben Dupont - Yet2.com
• Bettina Von Stamm
• Biz Stone - Twitter
• Cecilia Weckström/Helene Venge – Lego
• Charlene Li/Josh Bernoff - Groundswell
• Cheryl Perkins – Innovationedge and former CIO of Kimberly Clark
• Chris Meyer
• CK Prahalad - Harvard Business School
• David Willetts MP
• Doc Searls – Harvard
• Doritos – VP Marketing/CEO
• Elizabeth Gilbert
• Eric Von Hipple – MIT
• Ernie Richardson – MTI
• Esther Dyson – Journalist and Investor
• Founder of Mumsnet
• Frank Piller - Aachen University
• Gary Hamel
• Geke van Dijk, STBY
• Geoffrey Moore
• Gerard Kleisterlee – Philips CEO
• Helmut Traitler – Nestle
• Henry Chesbrough – Berkley
• Infosys CEO
• James Andrew & Harold Sirkin - Payback
• John Bessant – Exeter University
• Joi Ito – CEO at Creative Commons
• Jon Moulton – Alchemy
• JP Ranganswami – BT Plc
• Karim Lakhani – Harvard
• Kate Andrews – Cola life
• Large Hadron Collider CEO
• Larry Huston - former VP at P&G
• Larry Keeley at Doblin
• Lemuel Lasher - CIO of CSC
• Lux CEO
• Lynda Gratton – London Business School
• Marissa Mayer – Google
• Mark Little - GE head of research
• Mark Zuckerberg - Facebook
• Michael Dell – Dell Ideastorm
• Mike Lynch – Autonomy
• My Starbucks Idea Founder
• Nike on co-creation
• Obama - POTUS
• Paul Sloane
• Peter Cochrane ex BT CTO
• Peter Diamandis – X-Prize
• Peter Mandleson
• Phil McKinney - CTO for HP's Personal Systems Group
• Premel Shah – Kiva
• Prof Roy Sandbach - P&G
• Roland Harwood
• Sahar Hashemi
• Sam Palmisano IBM CEO
• Sir Ken Robinson
• Stan Gryskiewicz
• Stefan Lindegaard
• Stefan Liske – PCH
• Steve Jobs – Apple
• Steve Shapiro - VP of InnoCentive
• Tata CEO
• Tim Jones/Vodaphone
• Tim Minshall - Cambridge University
• Tim Smit – Eden Project
• Tom Kelly – IDEO
• Vinay Gupta
• VJ Govindarajan – Tuck School of Business
• Wayne Hemingway – Red or Dead
• Wipro CEO
• ...and last but not least a Myrmecologist (which is the scientific study of ants, a branch of entomology)

I don't know them all but was intruiged and fascinated by the list. The brief for the event is a showcase of for practical/tried and tested, tools and techniques for implementing open innovation encompassing process, strategy, culture, tools/technology, legal arrangements, skills, leadership etc.We intend it to be a very interactive day, chock full of practical case studies and hopefully live open innovation (or at least lots of connecting) happening on the day, topped and tailed with some big names (probably but not necessarily from business rather than academia/other) who can speak honestly from the open innovation coal face and have the battlescars to prove it.

Thanks again for all contributions.

Extreme Collaboration & Reebok Pumps

I was recently speaking to Continuum, who are now a big US industrial design and innovation company but back in the early 80's they were essentially a medical devices company who picked up an unusual commission from Reebok. This led to them developing the Reebok pump which embedded an aortic (bloodvessel) clearing device into a standard pair of trainers. It was a very lateral leap but hugely successful and made Reebok bigger than Nike (at the time) and was the best selling trainer for several years. Extreme collaboration in action...

Human Scale Organisations

I don't really do New Year’s resolutions and I certainly don't do predictions for the forthcoming decade. The best I can offer is my hope for the way things are moving, namely to create more human scale organisations. By this I mean those organisations with a common sense approach to me as a consumer, citizen, employee, partner or competitor.

We are at an interesting junction where we simultaneously distrust huge organisations but at the same time are enthralled by them. We all now we need to adapt to the realities of a connected world and the multiple scales upon which it operates.

Human Scale organisations are fundamentally different in that they:

1. Tend towards sharing first and inventing second, to create mutual value;
2. Are honest about the mistakes they’ve made and seek to rectify them quickly;
3. Know their strengths and weaknesses and so actively seek complementary partners;
4. Prioritise long term relationships over short term outcomes;
5. Systematically focus on the macro and the micro.

This is just a starter for ten but that’s what I'll be working on for the new few years and I’d love to work with others to make this happen. As always I’d be interested in your views and any examples of those organisations that combine global and human scales effectively.

California Partnering Conference - 50% off

There is a new mantra we are repeating for open innovation programmes:  'Start at the end'.

Many enterprises and most SMEs enter into an open innovation programme with their eyes closed, leaving the business aspects of their innovation to last.  This is one reason why many potential relationships falter. We have found it helpful to sketch out the likely business models and relationships that we're aiming for in advance. We've done this most recently with OSCR, our Orange project and also with Faber and Faber.  Orange are now specifically looking for licensing or joint venture opportunities whereas Faber and Faber are aiming to share the delivery of and profits from a new service. What this does is manage expectations, make proposals more relevant and doable and makes sure that the right people are judging the innovations.

Having said all that, partnering is tricky.  Here's a conference run by an organisation which we're members of - H-I Network.  Sadly the public coffers don't stretch to the West Coast, but I won't hold it against you if you decide to go...

The annual IBF ‘Corporate Venturing and Innovation Partnering’ conference in California (http://www.ibfconferences.com/Corporate-Venturing.html) each year attracts senior executives from leading global organisations. The conference runs from 23 – 25 Feb in Newport Beach with key speakers from CitiGroup, Philips and Procter & Gamble with panel members from many more leading organisations running funds and open innovation. The conference is being supported with a panel discussion and audience participation programme by the H-I Network.

H-I is able to offer a 50% discount ($695) for participants registering with Christina Riboldi [christina@ibfconferences.com] and quoting (H-I Network).

If you would like further details or discuss the value of the conference and contact please feel free to contact Andrew Gaule (andrew.gaule@h-i.com)

Everything's an Offer

I'm currently reading the excellent book Everything's an Offer by Rob Poynton, which explains how improvisational theatre can help enterprises can engage with and respond to the complexities and uncertainties of leading organisations into an era when creativity and change are of paramount importance. By 'offer' he essentially means 'opportunities to engage with others' which is also what many organisations are trying to achieve through open innovation.

One section in the book really stood out for me where he talks about three difference kinds of offers, namely 'vague', 'open', and 'closed'. An example of each type is as follows:

• Vague offer - 'Help!'

• Open offer - 'I need help with my car, it won't start.'

• Closed offer - 'I need help with my car, it won't start, so bring yours up alongside and we'll get the jumper cables connected'

He shows how in improvisational theatre, as well as other walks of life, open offers are the most helpful and constructive as they allow the most directed and creative response. A vague offer might just result in a slightly bemused 'eh?' whereas a closed offer will result in simply a 'yes' or a 'no'. The open offer on the other hand opens up a number of options such as 'jump in and we'll try and jump start it' or 'do you want a lift'. The trick in improv is to keep offers open to allow others to engage and build upon each offer.

Relating this back to open innovation, too often we see invitations to collaborate are either too vague or too closed. For examples many open innovation programmes simply ask for 'ideas'. This is much too vague and will result in the experience such as one very large company I spoke to recently who secured a grand total of 2 ideas in 2 years. On the other hand, there are often calls for extremely specific innovations. Whilst on occasion it is helpful to be very specific about what you are looking for, it can too often stifle the potential solutions by being too detailed in your request.

In my experience the best open innovation programmes focus on the intersection of couple of unrelated themes (e.g. one sector and one technology) that create a nice creative space for innovations to spark. The best example from our practical experience would be from our VJam project we were looking at innovations that combined the rise of social media with the future of air travel. Either of these trends on their own would have been much too vague, but when taken together led to a very productive open innovation programme.

It's worth saying that any productive relationship needs to ultimately end in a closed offer, however to paraphrase Rob as he says in his book 'sharing responsibility can make your innovation easier'. So I guess what I'm saying is if you focus on the intersections and the collaborations will look after themselves.

We are currently working on a needs network where we are trying to pull together the innovation needs from people in our networks and the trick is to ask the right questions. So I'd love to hear from anyone with any specific practical examples of open innovation briefs that were too vague or too specific, or of course ones that really worked.

Geography vs Mobility

I recently became aware of two very different british organisations doing interesting things with open innovation. One is The Ordnance Survey and their GeoVation project, and the other is the Symbian Foundation with their Ideas portal.

 
GeoVation is all about doing interesting, exciting and worthwhile things with geography. There is a £21,000 development fund, you need to take your idea to the next level by creating a venture and enter them to the GeoVation Awards Programme.

 
Symbian Ideas, from the Symbian Foundation on the other hand is all about ideas for new mobile devices and applications, or for the Foundation itself.

Both are relatively new and I'll be keen to see how these initiatives integrate with their respective wider organisational innovation strategies. The crux will be whether they can turn great ideas into investable propositions.

And perhaps it would be intresting to encourage a mash up between the ideas submitted on both portals.