Cisco Chairman and CEO John Chambers made a startling prediction at his company’s recent customer conference in San Diego. He projected that 40 percent of the businesses in the room would not exist in a meaningful way in 10 years. Chambers said the survivors will need to transform themselves with speed and become masters of fast and continuous innovation.
Innovation is a watchword for everyone in business today. A recent Harris Poll surveyed more than 300 U.S. executives at midsize and large companies ($1 billion and up) for NineSigma. Eighty percent of these leaders expect their organizations to increase their innovation budgets this year. Their companies are using strategies like open innovation, which involves tapping into the “brain trust” of a global network of experts.
Adopted by companies such as GE, BASF and Kraft, OI is used by businesses that want to launch groundbreaking products more quickly. They actively seek pre-existing technology solutions and partners who can help them apply those solutions in new ways to shorten product development cycles.
How can other businesses follow their example and integrate OI into their innovation programs?
- Define your company’s core competencies. Where do you outpace your industry and where do you lag? This will help pinpoint where you can benefit most from external innovation, which serves to “de-risk” the process. An aerospace company, for instance, may look for more efficient air humidifier technologies for aircraft from the outside. While these solutions may be essential for their growth, they may fall outside their core expertise.
- Broadcast your need to solution providers outside your own technology domain. Get to the root of your challenge with a more “generic” need statement to attract a broad range of potential partners. For example, a global food manufacturer sought solutions for “the formulation and delivery of nanoparticle sized halide salts.” Their real plan was to develop a great tasting, low-sodium potato chip. A promising solution emerged in an unrelated industry — from osteoporosis drug research.
- Rethink your intellectual property strategy. Modify your standard policies to facilitate open discussions and collaboration. These policies must describe upfront clearly who owns what. Specifically, perhaps you don’t need to own IP from a more ancillary technology domain outside your core product range.
- Remember that being open isn’t a one-size-fits-all proposition. For some companies, keeping their vision, plans and name under wraps not only protects trade secrets, it helps to attract solutions from other industries.
On the flip side, many businesses are choosing to be more transparent about their needs. GE, for example, has been using highly public innovation contests to improve everything from water filtration components to 3-D printing technologies. By being specific about their objectives, they’re attracting experts who are confident that the playing field is level for everyone.
Proven OI processes provide a recipe for innovating fearlessly and repeatedly. Businesses who commit to it can join the ranks of the innovative companies leading today’s global marketplace.
Andy Zynga is CEO of NineSigma. Headquartered in Cleveland, NineSigma is a global innovation company that helped pioneer the practice of open innovation. Contact him at [email protected]
