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.   

Calling innovative graduates

NESTA and BT are kicking off a new collaborative innovation programme aimed at the corporate graduate intake.  Graduates in Partnership was inspired by a small group of enthusiastic BT graduates who had the idea that good things could happen if high-potential young professionals from different companies were given the opportunity to network with their peers on other graduate schemes.  Here is the programme plan:

Event 1 - 13th August 09
Shared Agenda: Discuss the key business issues affecting economic grow

Event 2 - 22nd September 09
Shared Innovation: Develop, in collaboration with a diverse range of skills and perspectives, cutting edge innovative solutions to the agreed business issue.

Event 3 - Date TBC

Shared Solutions: Present the business propositions to influential figures in industry, and pitch for sponsorship for delivery.

Graduates in Partnership builds on other NESTA Connect programmes (see Corporate Connections or Open Alchemy) which have experimented with putting together unlikely partnerships bewteen corporates in different fields of business. 

It will be up to the graduates to represent their companies and come up with shared opportunities and problems and then make things happen back at the ranch.  Our aim is for real new products and services to arise from these collaborations - this is definitely NOT just a training exercise. 

If you're a grad or run a scheme there are still one or two place left for the first event on the 13th August.  Just book a place here to join the likes of BT, IBM, News International, Barclays, Accenture, Nissan and Pfizer. 

“This programme is a really exciting new take on collaborative innovation.

It will foster our talent at the same time as creating links across

business that will continue to provide benefits in years to come.”

Paul Excell, Chief Customer Innovation Officer

The future of innovation is ... together

Excellent new collaborative book about the Future of Innovation where hundred of authors give their views.   Here's the link.  The plan is for this to grow into a kind of innowikki so why not submit your own thoughts?  To save you hunting high and low, here are mine!  

The future of innovation is ... together

Let’s ignore the difficulties and problems of collaboration for now. There are many factors driving businesses large and small towards corporate open innovation (COI) at the dawn of the 21st century: Innovation is expensive and outsourcing promises lower overheads; Innovation is now global and even the largest multinational corporations (MNCs) realise that their knowledge has limits; Innovation is slow and often incremental and MNCs are attracted by the possibilities of quickly side-stepping disruptive competition or colonising new markets in a kind of corporate lateral thinking; Innovation is a group endeavour and some businesses have been quick to recognise the potential of the new web based networks as humanity wires itself together.

It is fair to say that most writing on COI is from the MNC standpoint. Most small companies are not familiar with COI as a concept and don’t know where to start or how to engage with MNC’s even if they do. From the perspective of SMEs or start ups the motivations are quite different. NESTA’s P&G Open Innovation Challenge has shown us that what many small businesses need above all is a customer. And if that customer is also a business or development partner rather than a pushy venture capitalist who insists on owning a large chunk of the business, so much the better.

Trust in the future

So what about those difficulties and problems? The solutions to the problems of intellectual property are almost as numerous as the business partnerships themselves. One solution NESTA noted in its Corporate Connections programme was to ‘keep the lawyers out of the room’ for as long as possible. This approach resulted in a profitable and unlikely partnership between McLaren and NATS and contrasts with the ‘sign first, ask questions later’ approach of most MNCs. For more unequal ‘David and Goliath’ partnerships, more creative approaches to intermediation can be beneficial as can the plethora of web based idea matching services that is now emerging. The one common element here is that establishing trust among actors in the innovation process will become a much more deliberate part of innovation strategy. A side-effect of this will be the necessity for more empathy between very disparate organisations. Partnerships will only succeed if everybody can answer the question ‘why bother innovating?’ on behalf of their external partners.

Extreme collaboration

Just as the extreme sports such as wingsuit flying or BMX racing are more exciting and rewarding than their more conventional counterparts, extreme collaboration can get you further, faster. NESTA and Virgin Atlantic’s current experiment in user-led innovation in which we are encouraging users to take a stake in the outcome is in stark contrast to the usual situation in which companies get away with paying nothing for ideas. Initial indications are that this approach is paying off and that treating customers as potential business partners can work. Of course with conventional companies this sort of innovation is tough. A recent paper from Cambridge’s Institute for Manufacturing notes that implementing an open innovation strategy presents many challenges for management. Many MNC’s have a decent strategy but are struggling with attaining the more operation capabilities to match. Some large companies will also have to be culturally reprogrammed in order to enable openness and cooperation rather than encourage secretiveness and competition. They will have to look hard at how they achieve the high levels of personal commitment to a project that open innovation requires.

Innovation is the new marcomms

To conclude, I feel excited about this new phase in innovation. As open innovation moves from the margins to the mainstream it has the potential to reinvigorate all R&D and NPD activity in companies. If you’re old enough to remember how marketing became essential in the boardroom in the 1980s then perhaps like me you’ll predict a similar resurgence as innovation gets a pace a top table.

Full RSA Networks video material now available

Anyone who has experience of working with a traditional organisation keen to move into a more dynamic and networked operating model will know that this is a big challenge - something in my more facetious moments I call Dinosaur 2.0.  In his recent response to Digital Britain, Charlie Leadbeater's much more elegant metaphor of boulders and pebbles rightly identifies hybrid organisations as one of the key innovation drivers that will make up our digital future:

...hybrids -  boulders that find ways to work with the pebbles or pebbles that grow to be boulders. Barack Obama made it to the White House thanks to a campaign which took organizing the pebbles to new heights. Obama’s web based campaign rewrote the rules on how to reach voters, raise money, organise supporters, manage the media and wage political attacks. Obama is now a boulder that speaks pebble. There are huge opportunities to create more hybrids like this, as large institutions seek to engage with their communities in new ways and selforganising communities go in the other direction, acquiring scale.

Our 2008 project with the RSA was one such opportunity and while the project execution was challenging, the learning work led by Sophia Park and Eleanor Ford that resulted was very rich indeed.

So if you want to learn some cutting edge insights into how organisations can support more networked forms of innovation, we recommend you peruse the report and the extensive video library that sits alongside it.

Donate your brain to cancer research

Well not literally.  I was reading this newsletter about Generation G (for generosity) having just come back from a meeting with Cancer Reasearch UK our partner in the Open Ventures Challenge in which we're trying to start new businesses on line. It seems that we're on trend in asking people to give their time and expertise rather than hard cash.  The next phase of this project is taking some of the 70+ ideas that you can see here   to market and for that we need professionals in all walks of life to help with business planning, marketing, web development,  the law etc. I am happy to report that big business is already engaged in this with GSK, Oracle and Microsoft holding innovation days for this initiative.  I hope we'll be able to appeal to small business too. 

Disconnecting...

I generally don't talk about personal stuff on this blog but I'd like to briefly share an observation based on watching my two and half year old son piece together a jigsaw puzzle last night (not the one in the picture by the way).

I noticed that, regardless of which 2 pieces he picked up, he assumed they connected. He hasn't clicked yet that just because 2 pieces could fit together, doesn't necessarily mean they should, and so finds puzzles a little frustrating at the mo. I know he'll figure it out soon enough, but it made me think secretly pleased that he was simply trying to connect stuff which seems to be an innate part of learning at that age.

Alas we all tend to unlearn that connecting ability pretty quickly, and he will soon too by necessity I guess, but I'd like to suggest we go too far and ought to redress the balance. In fact, look at the following chart (from the book Creative Education with thanks to Tessy Britton for the top tip) of divergent tests on 1600 kids by age which essentially test the ability to think laterally, which I think is so crucially lacking.

I guess for me this highlights the whole premise behind what we do at Nesta Connect, namely that it is possible to make more connections between disparate fields or activities than currently exists in and across hierarchical and silo'd organisations. Not only that, but these can lead to the most productive and most innovative connections as they force you to look at things differently and can lead to bigger leaps forward.

Therefore I think there is considerable value in setting up cross-cutting networks or spaces where people from difference organisations, disciplines or sectors can come together, make connections, nurture unusual collaborations and develop them to create significant commercial or social value.We do this through a number of different ways and it often isn’t easy, but when it works, the payback can be huge, which justifies the effort. And I think we can really start to prove the case for that with some powerful examples, but more on that early in the new year.

As many organisations shrink their what they do in 2009 to the core given the economic climate, a big challenge will be to maintain the space for new, unexpected or extreme connection and collaboration to happen.

Anyway, having tried to make the case repeatedly for more opportunities for connecting on this blog, I'm actually really looking forward to disconnecting for a couple of weeks from next week. Happy holidays.

People First

So it's 0403 on November 5th and Barack Obama has just been called as the next President of the United States.

A lot has been spoken of the role of technology and social media in his extraordinary campaign and the election as a whole. And of course I have to wholeheartedly agree that it has been utterly ground-breaking and certainly could be considered truly disruptive in its context. 

But through our projects, we here at NESTA Connect continue to learn over and over again, that while process and technology are so important...to truly guarantee success, we have to recognise that it's ultimately all about people.

Collaborative Models in the Film Industry

I love film festivals, and the London Film Festival is one of my favourites.

This year, NESTA is sponsoring a London Film Festival Fringe event, called Power to the Pixel. Director Liz Rosenthal describes the event as looking “ahead to where the power of the internet and digital platforms can offer new opportunities for those creators and companies that can no longer effectively function within the old film business model”.

Of course, there are plenty of traditional film businesses trying to understand these opportunities also.

Showcased at Power to the Pixel were some of the most innovative creative and business tools from around the world. Here are some of them:

PlaceVine – brings content creators and brand owners together to create sponsored content. Check out Shane Meadows Somers Town for an example. Would you guess that his short film was fully funded by Eurostar?

M dot Strange – talked about how to make a $70 million (style) feature film in your bedroom, and then show the world how to do it for yourself via YouTube. He uses his social network of admirers as zombie extras who then virally market the movie. And then they subtitled it into 17 languages. For free.

Wreck a Movie – gives film-makers a platform to crowd-source their own production using social networks. Timo Vuorensola explained how he and some friends went from space cadets in Star Wreck: In the Pirkinning to selling war bonds to fund animated feature that satirises Moon-based Nazis in Iron Sky.

All of the talks will be up on the Power to the Pixel website soon.

Video and final stab at social networks and cities

Readers of this blog or attendees at Nesta's recent events will have heard me, or others talk about the theme of 'social networks as the new cities'.

I don't intend restart this discussion again in detail but for anybody who is interested, find here a video of a talk I gave earlier in the summer at the NLab conference in Leicester, on this topic.

It's something of a stream of consciousness exploration of the subject but hopefully gives a flavour of my point of view. Namely that cities arn't just simply analogous to social networks, but rather some of the functions that cities provide (proximity, economies of scale, random interaction etc) are now increasingly being provided by social networks.

And most importantly, we are only just beginning to see the impact on our cities and places which will be profoundly impacted by the web, just as they have been historically by other disruptive technologies.

Anyway, enough on that, but as always I'd be interested in any thoughts and feedback as ever.

PS. Thanks again to Sue Thomas for curating the event and inviting me to attend.

Dealing in more than one currency

I remember after a relatively lazy lunch some years ago, asking a friend of mine who worked at the Bank of England what this thing money really was.  After the initial look of alarm in his eyes, normal service resumed and, being a solid economist, a solid economist's answer is what I got.  Somewhat unsatisfied, I then perused the rather fun Bank museum but to no avail for my question remained: what currency truly motivates our actions?

While the term online transaction may conjure up images of frozen Paypal screens and shoes which looked good on screen but give you blisters on the street, let me use it to refer to the motivation behind interacting in online communities, be that the blogosphere, social networks or whatever.  The intention behind this transaction is rarely clearcut but there appears to be two main contributions.  One is the wish to share and connect.  The other is the desire to be seen.

Together these two factors constitute whuffie, the currency introduced in Cory Doctorow's cult hit Down and Out in the Magic Kingdom. 

Tara Hart in an excellent recent post on this topic clarifies whuffie when she says that:

Whuffie has replaced money, providing a motivation for people to do useful and creative things. A person’s Whuffie is a general measurement of his or her overall reputation, and Whuffie is lost and gained according to a person’s favorable or unfavorable actions. The question is, who determines which actions are favorable or unfavorable? In Down and Out, the answer is public opinion. Rudely pushing past someone on the sidewalk will definitely lose you points from them (and possibly bystanders who saw you), while composing a much-loved symphony will earn you Whuffie from everyone who enjoyed it.

But does working in this kudos or gift economy get you fed?  Tara says oh yes it does, and is confident that as the value of online communities continue to grow and evolve this can only be more and more the case.  In fact, she is so confident that November will see the publication of her new book on this very topic. 

In the next few years, I believe the ability to deal in multiple currencies in a consistent and integral way will become an increasingly key skill for fruitful 21st century living.  Money, time, carbon, whuffie and attention all have their value and their place, but to over-emphasise one to the exclusion of the others can limit our view and therefore our capacity for innovation.

PS Guess how much it costs to visit the Bank of England's museum?