Last summer I wrote about an interesting report exploring the extent of open innovation around Europe. The study, conducted by the European Academic Network for Open Innovation, showed the growth in open innovation, with the majority of organizations practising it in some form or other. This was helping companies to bring new, more novel products to market faster and more successfully.
This report has been followed by the recent publication of a report by innovation firm Luminary Labs, who surveyed around 100 leaders who work in open innovation to try and provide cross-sector insights and benchmarks. The sample is not as exhaustive as the EU report, but the findings are nonetheless interesting.
A way of being
One of the more interesting themes to emerge from the report is the cultural aspects of open innovation. Building a culture of innovation is one of those issues that crops up repeatedly, and having an environment where people feel emboldened to experiment, to try new things, to go against the grain is crucial if innovation is to thrive. That certainly came out in the report, as whilst some executives see open innovation purely in profit and loss terms, the most successful see it as something that has fundamentally changed how their organizations think and behave.
A key stage of open innovation for large companies is running proof-of-concepts to test and evaluate external technologies, and identify the best solution for their specific needs.
Toby Olshanetsky, Co-founder and CEO of prooV, the only end-to-end solution for running proof-of-concepts, says that enterprises they work with have an entrepreneurial culture.
“To stay ahead of the innovation curve, companies need to consistently be on the lookout for gaps to fill, problems to solve and processes to improve,” Olshanetsky said. “Seizing these opportunities by collaborating with external vendors is what keeps companies moving forward and ahead of their competition.”
As with the previous paper, the Luminary data also highlights the sheer breadth of work being done under the umbrella of open innovation. From crowdsourcing to challenge competitions, proof-of-concepts to citizen science, organizations are dabbling in a range of open innovation methodologies to see what works and generate an evidence base for scaling their projects up.
Both studies nonetheless remind us that despite the growth in open innovation, it’s probably a leap too far to say that the approach is embedded into how organizations approach innovation, much less how they approach business in general. Whilst most organizations are doing some form of open innovation today, the efforts are often still at the experimental stage.
A need for skills
Both reports have also highlighted the challenges involved in getting the kind of skills required to scale up open innovation. For instance, nearly half of the companies surveyed in the European study revealed that they offer staff no training or support in specific open innovation skills, despite the strong emphasis placed on open innovation across the board.
These skills cover a wide range of areas, including the ability to think and act entrepreneurially, engage well with external collaborators, understand the vagaries of intellectual property and work effectively across virtual platforms.
Open innovation, and proof-of-concepts in particular, bring together a vast array of stakeholders with differing specialities and interests.
“Proof-of-concepts are a necessary technological stop on the way to achieving strategic business goals,” Olshanetsky said. “To run an effective proof-of-concept, someone needs to be able to build a bridge between technological and business-minded people, between their company and the vendors they are testing, between an innovation goal and practical implementation. And they need one centralized place to organize and carry out the whole process.”
The Luminary Labs report suggests that lessons can be learned from digital transformation, as open innovation offers both an opportunity and a disruption of traditional ways of working. Many of the strategies used by early adopters have been similar to those used by companies that have achieved other forms of transformation.
Just as digital transformation requires a shift in mindset, however, so too does open innovation. If we can rethink how organizations work, and build the competencies to support this, then the evidence from early adopters suggests that we can start achieving real, tangible successes via innovation.
