If there was a way to generate time savings of 30 percent or grow 5 to 20 percent in a year, you would probably want to do it. But many leaders hesitate to do so even though there is a way.
It’s called open innovation.
“Open innovation is really about companies going outside their four walls to seek knowledge, technologies, and innovations from around the world,” says Andy Zynga, CEO of NineSigma Inc., a company that provides open innovation services to businesses.
The benefits of going to outside resources can be huge. Open innovation helps to eliminate waste and avoid reinventing the wheel.
“It helps to reduce risk because when companies have a portfolio of different development projects, they can really see what’s going on in the world and put it into a larger context,” he says. “There are a number of really good reasons that make it important for them, but probably the most important one is it accelerates growth for companies.
“You can cut development time by 30 percent, which means you’re on market 30 percent faster, so if you have a product that you say, ‘Within three years, I want to get it to $30 million,’ that means you’ve just captured another $5 million or so in the first year because you’re going to market faster.”
So you’re interested, but how does the process actually work? First, look inside your company.
“Look at the existing product development funnel to say, ‘What are the different things that I feel very passionately about being possible candidates generating major revenues for me in, say, the next three to five years,’” Zynga says. “Within that, say, ‘What of those projects could benefit from an accelerated development cycle where external help would be very helpful?’”
From there, you can go to an organization that specializes in open innovation to talk about probabilities of success with different projects. Once you and the experts agree that a project would be beneficial by using open innovation, then you would write a two-page brief that explains what you’re looking for in a vague and generic manner.
For example, P&G wanted a solution to avoid shirts coming out of the dryer wrinkled. They knew there had to be some element of a polymer that had to relax the cotton fibers.
“We wrote this in a way that brings it down to the most basic science: ‘Our client is looking for a material that will relax the surface tension of an organic material while using polymers,’” Zynga says.
Then that request is put out to the network of experts. If someone needs more information, they can request it, but if they think they have a solution, they write a solution proposal for you, also in a vague and generic manner. In the example with P&G, they found a professor at a university in Indiana who was able to create a solution.
“Answers come from industries that you would never have expected to have an answer for the particular client,” Zynga says.
This is a huge advantage of open innovation and one you may not get by trying to find a solution provider yourself because you’d likely limit yourself to Google and use search terms for your industry.
“It rules out the unobvious connections,” Zynga says.
Typically the whole process from pitching to completion of the product can take three or four months, and the cost varies based on what you’re looking for and how complicated it is. One thing that doesn’t vary is that by taking this approach, it will also help your organization internally.
“Once you start going outside your own four walls, it’s a catalyst to collaborate more internally because they learn how to do that,” he says. “They learn how to engage with outsiders, to trust, to have relationships, to understand their technology position, and it helps to collaborate much better internally.”
How to reach: NineSigma Inc., (216) 295-4800 or www.ninesigma.com
Changing innovation expectations
Andy Zynga recognizes the need in business for open innovation. His business, NineSigma Inc. specializes in matching clients with solutions and he sees how the demand is growing as more companies realize how critical the concept is to growth.
“We think that open innovation will become more and more imbedded in more companies, including mid-size ones,” he says. “Right now it’s a discipline within innovation, but we think it will become a discipline that goes without saying in all companies.”
He compares the open innovation movement to that of the quality control movement.
“Everyone used to do quality control, and then Six Sigma came in, and there’s total quality management, and for a while it was quite novel,” he says. “Then it became more and more weaved into the whole company setup. Innovation is not something that rests in one area of the company. It comes from many areas inside the company and outside the company. It’s going to become an embedded part of companies.”
He also says that open innovation is for everyone — not just the hyper-creative organizations of the world.
“There really is no industry that shouldn’t do open innovation — it’s quite suitable for everyone,” he says.