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 Open 100

 

We’re often asked ‘Who is making money from open innovation?’ or ‘Which organisations are successfully implementing open innovation?’. The fact that people keep asking these questions must mean it isn’t clear enough yet.

 

Therefore we’ve started a list called The Open 100 which aims to find the 100 top open innovation organisations globally? It is in alphabetical order from, Amazon to Zopa, with a very short desription of their open innovation initiative of example. This list has been compile including input from, amongst others, Henry Chesbrough which I'm really delighted about.

 

The Open 100

 

1.  Amazon  -  Amazon marketplace
2.  Apache  -  Open Source Webservers
3.  Apple  -  iphone app store
4.  Basecamp  -  Collaborative Project Management
5.  BBC  -  Backstage/Labs
6.  Berkeley Innovation Forum  -  Share Innovation Management Practices
7.  BT Plc  -  21CN
8.  Cancer Research UK  -  Open Ventures Challenge
9.  Creative Commons  -  Creative Commons
10. Dell  -  Ideas Storm
11. Distance Lab  -  Mutsogato
12. eBay  -  Online marketplace
13. Ebbsfleet Utd  -  Myfootballclub.com
14. Facebook  -  Connect
15. Flickr  -  Photosharing
16. Google  -  Google Wave
17. Guardian  -  Guardian API
18. IBM  -  Global Innovation Jam
19. IDEO  -  Human Centred Design Toolkits
20. Imperial College  -  Design London
21. Innocentive  -  Crowdsourced problem solving
22. Innoget  -  Open innovation marketplace
23. Innovation Exchange  -  Trusted Intermediary Membership Network
24. iStockPhoto  -  User Generated Photos
25. John Lewis  -  Cooperative Retail Chain
26. Kluster  -  Namethis.com
27. Last.FM  -  Internet Radio
28. Lego  -  Mindstorms
29. Livework  -  Streetcar
30. McLaren F1  -  Applied Technologies
31. MIT  -  OpenCourseWare
32. Mozilla  -  Firefox
33. Ocean Tomo  -  IP Auction Marketplace
34. Open University  -  Open University
35. Oracle  -  Open Alchemy
36. Orange  -  Open Innovation Labs
37. OsCar  -  Open source car
38. P&G  -  Connect and Develop
39. PLOS   -  Public Library of Science Open Access Journals
40. Properllerhead  -  Music Software
41. RCA  -  Design London
42. RedHat  -  Linux
43. River Simple  -  Open car design process
44. Science Commons  -  Science Commons
45. Sense Worldwide  -  Global creative R&D network
46. SSIPEX  -  Shanghai Silicon brokerage for semiconductor IP
47. Spotify  -  Music access
48. Star Tides  -  Military / Humanitarian collaboration
49. Technology Strategy Board  -  Connect and Catalyse
50. Tesco  -  T-Jam
51. The Co-op  -  Bank Cooperative Banking
52. The Hub  -  Business Incubation
53. Thinkpublic / NHSi  -  Experienced based co-designed health services
54. Threadless  -  T-Shirts
55. TSMC   -  Open Innovation Platform for semiconductor design & IP
56. Twitter  -  Microblogging
57. Ubuntu  -  Open Source Operating System
58. Unipart  -  Green shoots
59. Virgin Atlantic  -  V-JAM
60. Wikipedia  -  Online Encyclopedia
61. Yet2.com  -  IP transaction space
62. YouTube  -  Video Sharing
63. Zopa  -  P2P Finance

 

Please do add to or edit this list, debate and discuss, and add any useful links where possible. Else, if you’d like to be more involved, please edit the wiki here or share with us any other similar resources that you know are out there. Thanks.

 

We’re not exactly sure what we are going do with The Open 100 just yet, but let us know how you think it could and should be developed. I’m looking forward to the point when we get to 100 and then need to start debating who makes the list and who doesn’t, and crucially the reasons why. Anyway, we’d be grateful as ever for your contributions or comments.

 

Photo credit: gmanII 

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.

Corporate Innovation Group

We hosted a corporate get-together last week together with Oracle.  In a way this was a follow up to our work together on Open Alchemy but this time not a formal programme.  The big idea was to convene a group of like-minded corporate open innovators and see what we could achieve together rather than separately.   The evening was a resounding success and it appears that there are lots of opportunities for joined-up working.  It is somewhat ironic that the ‘open’ in corporate open innovation does not include corporate peers as a matter of course.  The sorts of benefits that were discussed were to SMEs (give them a market to pitch for) , Corporates (better identification of needs and potential partners) and Government (being more in touch with the needs of industry).  From having run the P&G Open Innovation Challenge NESTA is aware how difficult it is for SMEs with good ideas to find the right door to open in any given corporate and we are also aware of the logistical difficulties of finding the right ideas and people from the corporate perspective.   Maybe some sort of Corporate Innovation Group is one of the answers?  I would be really interested to hear you views on this.

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.

Connecting Dots and Valuing Networks

“More people, sharing more resources, in new ways, is the history of civilisation.”

The above quote comes from Howard Rheingold's 2002 book Smart Mobs and its sets a suitably grand tone for this post that I‘ve been chewing over for a while. I’ve always been interested in new way of connecting & networking & relationship building and recently have been spurred on to write this post by 3 unrelated events, described briefly below:

1. Amplified08 – A ‘network of networks’ event that brought together 250 people and 40+ creative and technology led networks from across the UK. A self organised conference that is anticipated to be the first of many, that sparked lots of commentary and excitement. See here for various blogs and here for the huge volume of comments on twitter.
2. V-Jam – A Virgin Atlantic innovation workshop to explore the future of air travel and in particular the role that social media can play. The event brought together a diverse group including lots of their customers, suppliers, partners, and various other interested parties. Again, this sparked much commentary on blogs here and on twitter here.
3. Learning Dreams – A small gathering hosted by Tessy Britton to hear about a successful scheme that has been running in Minnesota for over a decade, led by Dr Jerry Stein, which has been successful in building a more joined up education system in the state.

In each case many people were very excited by the events themselves (myself included) and the opportunities that the events and networks presented. However in each case there was also a significant minority asking the valid question ‘well what was the point of that?’. To be more precise, what I think they meant by this was ‘what real transactions occurred on the day?’ or ‘what commercial/social value was created?’. However I think this is possibly the right question at the wrong time, and misses the immediate value of networking.

Conversations first, then relationships, then transactions

There is a sequence of activities that occur in networks that can seldom be bypassed. Namely you start with lots of conversations, some of which will lead to a smaller number of some kind of relationships. Eventually, and almost certainly long after the first time people met, some transactions may follow that create value, be it commercial or social.

Therefore to judge an event by the number of transactions on the day misses the point. I think you can only observe the conversations and relationships that were created. Over the longer term you may be able to analyse the transactions that followed but this is still very hard.

• In the case of Amplified08, the number of conversations sparked before, during and after the event, leads me to conclude that a host of new relationships were formed and transactions will follow. On that point alone I judge it a huge success. Whether Amplified exists as a network in 12 months time is not the point and whether it could have been managed a bit better is undoubtedly true but not what’s important.

• Regarding V-Jam, I think the event represented a big shift in the way Virgin engage with their customers, suppliers, and various other partners and interested parties. It also sparked a host of conversations and should be perceived as a success. I am fairly confident that this will lead to an array of new projects and transactions but it’s too early to specify what these will be.

• In the case of Learning Dreams, Jerry Stein (the lead protagonist) almost innately felt compelled to connect up all the disparate education organisations and services. But it started with him going door to door to chat to excluded students and their parents, and the value/transactions followed later. He has been very successful and it is a model that is being copied elsewhere including in Britain. 

Our Big Hairy Audacious Goal for Britain

I kick started proceedings at Amplified (see qik video here - apologies for the terrible audio) setting the following big hairy audacious goal:

"to make Britain the most connected country on the planet"

Now I know how difficult that is and had my doubts about saying it out loud (it’s not very British to be so bold is it but then again I’m not very British - I’m happy to explain my gene pool separately to anyone who is interested). However I am certain of the value that it would create for Britain. If we could achieve this goal, or even get anywhere close. I actually think that Britain is already something of a hub in the global economy culturally, economically, geographically and financially, and so it is realistic.

However, the value of networks is, by definition, highly distributed, and therefore it is seldom in any one person or organisations interest to support them. This is where public institutions like Nesta may have a role to play in connecting the dots, people and networks for the wider societal and economic good.

Connecting the Dots - a mathematical interlude

The theme at Davos this year, I'm reliably informed, is ‘Connecting the dots’ which is interesting but who know what those clever and influential people will talk about. But allow me to start with some simple maths that might help. Here are 47 dots connected in 3 different ways.

There are lots of different ways in which they could be connected but there appear to be 3 main different ways as follows:

a) hub and spoke - to me looks like the Britain's motorway or high speed rail network

b) multi hub - to looks like the global energy network (oil and gas)

c) distributed - looks like the network upon which the internet is based

In fact, this chart comes from this classic paper, that was very influential in determining how the internet infrastructure should be distributed to maximise safety.

Anyway, looking at these 3 different ways of connecting, and thinking much more widely than just internet technology, I think we've got too much a) and b) and not enough c). The problem is, c) has lots of supposedly random links that are often considered redundant and costly.

Towards a Distributed Innovation Ecosystem

For innovation to flourish in a country or a place, requires the contribution of many actors, from universities, to corporates, to small companies, to public sector institutions etc. However looking at the supposed innovation ecosystem in most countries, there is a at best a multihub network where universities, governments and corporates have undue power.

I would argue that good ideas come from anywhere and we need a much more distributed (along the lines of picture c above) economic and social landscape to allow these to flourish. This has numerous implications for intellectual property regimes and other structures which are more than enough for another blog post so I won’ t go into that here.

Our mindset needs to change from ‘what’ to ‘who’

We have seen the cost and speed of accessing information plummet over recent years, decades, centuries. I believe that in the not to distant future we can essentially assume that access to all information will be freely available to all (who have internet access - I‘m well aware of the 5bn who don‘t). And I do mean all.

Now much of this information will be classed as misinformation and much of it will infringe all kinds of peoples intellectual property so I’m not suggesting this is a universally good thing. However I think that if this happens, then it will require a major shift in the way individuals and organisations perceive themselves and create value.

Currently we identify ourselves (as individuals or members of organisations and institutions) based on our knowledge. It’s just what we do. However if access to all information is freely available then it is never more so a question of ’who you know, not what you know’. And by this I really don’t mean some kind of closed old boy network. In fact is quite the opposite. It’s very much an open and global network.

In future we will create value not on the basis of our knowledge, but on the basis of how we can leverage our relationships or social networks to capitalise on the information that we all have access to. This will not be easy but I would argue that those unable to make the shift will be left behind.

What’s Next? – Network Value

To try to assess the value of networks or events such as Amplified, V-Jam or Learning Dreams based on the transactions that occurred on a particular day is to miss the point and value of networking. There are a variety of ways we can connect the dot, people and networks and I would argue that we must strive to maintain diversity and distribution in the networks we create, and foster, so as not to further entrench existing silos.

I’ve heard somebody say recently, and I can’t remember who I’m afraid, that 20 years ago companies couldn’t quantify the value of their brand, which they now can through a variety of methods. It’s called ‘Brand Value’ and it tends to be the biggest number on the balance sheet for companies like Coke. What needs to happen now is a similar shift from knowing that networks are important, to being able to quantify the value of our networks – our ‘Network Value’. There have been fledgling attempts at this over the years e.g. the net promoter score but I’m aware of some of the concerns with this and needless to say our understanding of how to calculate ‘Network Value’ this needs to get much more sophisticated.

And Finally…

I’m not sure quite how to summarise all of the above but needless to say it’s important to me, and the work we do at Nesta Connect. As always I’d be really interested in the thoughts or feedback of others.

Needless to say I think networks are increasingly crucial and we should set ourselves as big hairy audacious goal to make the UK the most connected place on the planet (whilst being aware and welcoming that other countries will have, or may already have, the same objective).

So as connectivity continues to grow exponentially, it up to us to understand what this means socially, economically and politically; to continue to build networked organisational models that better share risk and reward, and to share what we are learning.

What we are learning about open innovation

I recently stumbled across the openinnovators blog and was impressed with the information and resources on there. They were looking for guest bloggers to submit articles so I took the opportunity to summarise what we have been learning about open innovation through our experience in the past couple of years. The article, called 'the art and science of open innovation', is available to read here.

I believe that, whilst awareness in open innovation is increasing, the focus is still primarly around hard factors such as intellectual property and investment models. Whilst we have learned a lot about these hard factors, and have a definite point of view about them, this article focusses mainly on the cultural factors/barriers to open innovation which I believe often get overlooked.

Anyway, as always, I'd be interested in any comments or feedback.

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.

Engineering serendipity

I met an interesting company yesterday called CellCentric, a cambridge based company that has developed a network of specialist academics (in the field of epigenetics). In essence what they do is find links between the work done by the academics generally working in very narrow specialist silo. They then can more objectively assess the ideas and also spot opportunities to develop the intellectual property and sell on the IP to big pharma companies. This type of collaboration would usually only happen by chance very rarely.

With more distributed organisations and specialised knowledge, the need for these type of organisations is increasing, who can organise integrate knowledge and organise innovation between organsisations. And it's organisations like Innocentive, Kluster, Innovaro, The Disrupters, Innovation Arts, WhatIf and CellCentric that all create value by aggregating knowledge and brokering relationships. I’m going to coin a term and acronymn and describe them as an engineering serendipity businesses (ESB), which I also think is the business NESTA Connect is in too.

Other organisations like the IPGroup do something similar to Cellcentric with the academic research base, but on a much broader disciplinary scale. Can their success in unlocking the potential of epigenetics be transferrable it is to other disciplines, or sub-discipilnes, or sectors?

I'm always keen to collect examples of interesting ESBs so please do send me details of other good examples.