Innovation Management-Open Innovation management Culture

1
MOOI Theme 5How to create a corporate culture
where OI can thrive
Prof. Henry Chesbrough, University of
California, Berkeley ESADE Prof. Wim
Vanhaverbeke, Hasselt University, ESADE
National University of Singapore Dr. Nadine
Roijakkers, Hasselt University April 1, 2014
2
Rome, , wasn't built in a day. Likewise, open
innovation is not something you can achieve
overnight. It is not a single event, but a
process and a culture that must grow over
time. Rome did not build itself, either, and
similarly, open innovation won't just happen. It
takes work, commitment and patience to cultivate
an effective program. It is a major initiative
requiring focus, investment and time. Kevin
Stark, director, technology solutions,
NineSigma Industry Week, October 12 2011
2
3
What is an open innovation corporate culture? Do
we have the same understanding ?
1
4
Open innovation culture

• What is corporate culture?
• Corporate culture can be defined as the values,
  norms, attitudes and behavior patterns, that are
  shared within an organization Herzog, 2011.
  Corporate culture can be seen as the personality
  of a company that influences people's behavior
  within the organization, regardless of size and
  field of action
• OI and corporate culture?
• Herzog (2011) cultural issues sparked by open
  innovation fit into three layers of firms
  culture.
• Practices these are the easiest to change and
  in the open innovation context include issues
  such as management support, freedom to express
  doubts, organizational risk-taking, and
  technological opportunism.
• Organization's norms not-invented-here and the
  not-sold-here syndromes (Chesbrough 2003,
  2006). Harder to change.
• Shared basic values in the organization which are
  the most difficult to change.

4
5
Open innovation culture

• Implications when moving from closed to open
  innovation?
• Culture for closed innovation is not appropriate
  for OI
• Starting OI entails a cultural shift, whereby
  working with other companies becomes accepted and
  endorsed throughout the organisation.
• Resistance will lead to (cultural) barriers
• How to overcome these barriers? What are the
  mechanisms and management tools to be successful?
• Cultural changes usually take time adapting to
  an OI culture may be one of the most difficult
  hurdles to take
• An OI culture implies that OI is embedded in
  values and norms, practices and behaviors OI
  culture is emerging at mature levels of OI
  implementation.
• Implementation of OI culture is (thus) a slow,
  stepwise process how do corporate crises help
  in speeding up this process?

5
6
Interactive poll 1

• What are the three most important items in
  establishing an OI culture in a company
• Commitment of and communication by top-management
• Using informal networks to communicate the change
  to OI
• Align individual rewards with OI requirements
• Train managers and employees
• Go for quick successes with OI
• Focus on tearing down cultural barriers against
  OI
• Provide processes and tools to implement OI
• How the organization responds to failure

6
7
Culture as an enabler and an obstacle when
implementing Open Innovation
2
8
Benefits and Enablers of having Open Innovation
Enablers
SOURCE Mortara, L, Napp, J., Sladk, I. And
Minshall, T (2009), How to implement opn
innovation, IfM, University of Cambridge.
9
Barriers to Open Innovation
Barriers
SOURCE Mortara, L, Napp, J., Sladk, I. And
Minshall, T (2009), How to implement opn
innovation, IfM, University of Cambridge.
10
In the beginning. the really good IP was being
held back by the PG businesses. This is when
the 3/5 program was created. 3 years after the
product is shipping into the market, or 5 years
after the patent is issued, the patent would be
made available to others. Nothing was
untouchable. Martha Depenbrock, PG, quoted in
Chesbrough, Open Business Models 2006
The move from Closed Innovation to Open
Innovation needs to be accompanied by a change in
the underlying innovation culture. A different
way of thinking and a different way of dealing
with ideas and technologies is required to fully
exploit the potential of Open Innovation  - Gali,
2011, p. 206
the biggest challenge was changing the culture,
shifting the mindset from only invented in PG
to proudly found elsewhere. Chris Thoen
(2009), PG
10
11
SOURCE Mortara, L, Napp, J., Sladk, I. And
Minshall, T (2009), How to implement opn
innovation, IfM, University of Cambridge.
11
12
Culture as an obstacle when implementing OI
SOURCE Mortara, L, Napp, J., Sladk, I. And
Minshall, T (2009), How to implement opn
innovation, IfM, University of Cambridge.
13
Culture as an obstacle when implementing OI
SOURCE Mortara, L, Napp, J., Sladk, I. And
Minshall, T (2009), How to implement opn
innovation, IfM, University of Cambridge.
14
Culture as an obstacle when implementing OI
SOURCE Mortara, L, Napp, J., Sladk, I. And
Minshall, T (2009), How to implement opn
innovation, IfM, University of Cambridge.
15
Culture as an obstacle when implementing OI
SOURCE Mortara, L, Napp, J., Sladk, I. And
Minshall, T (2009), How to implement opn
innovation, IfM, University of Cambridge.
16
Interactive poll 2

• What are the two most important barriers in
  establishing an OI culture in a company
• The know-it-all, control-freak managers
• Rigid top-down approach
• Lack of incentives to innovate
• Traditional channels of communication
• When failure is a sign of weakness

16
17
NIH and NSH
3
it is about losing what you are and have now
for building for the future
18
Overcoming NIH / NSH syndromesChesbrough
(2003,2006)
NIH-syndrome

• - Threat of being fired
• - Loss of capabilities
• Best practices are established by the best
  companies. How will we become industry leaders if
  we adopt others best practices?

WHAT CAN WE DO ABOUT IT?

• Rotate and cross-pollinate team members on a
  project basis
• Engage outsiders to ensure fresh perspectives and
  new thinking
• Encourage team members to regularly interact with
  the wider community (e.g., conferences).
• Formalize regular competitor reviews and
  environmental scanning to stay abreast of them
• Consider open innovation models, competitions
  (e.g., Netflix Prize), and outside collaborations
  to institutionalize a meritocratic approach to
  new ideas.
• Teach team members about the causes, costs, and
  remedies for NIH

19
Overcoming NIH / NSH syndromesChesbrough
(2003,2006)

• - Unwillingness to undertake extra-organizational
  knowledge transactions
• Loss of IP
• Risk that licensee / spin-off may become very
  successful

NSH-syndrome (resistance against external
commercialization of technology)
WHAT CAN WE DO ABOUT IT?

• It is actually a way to boost morale among
  RD-employees (us through licensing or spin-off)
• Communicate positive experiences with external
  monetization of technologies
• Establishing an appropriate incentive system to
  fight the NSH syndrome.  
• Use it or loose it policy technologies are
  shelved because business units may insist on
  vetoing any external use of the technology.
• Better to license than to face competition
  without licensing income

20
10 steps that companies should follow to create
and cultivate a successful open-innovation
programSource K. Stark (2011)
4
it is about losing what you are and have now
for building for the future
21
How to create an appropriate culture for OI
1
CREATE A LIST OF STRATEGIC AND BUSINESS NEEDS
22
How to create an appropriate culture for OI
2
DEFINE THE COMPANYS CORE COMPETENCIES
23
How to create an appropriate culture for OI
3
INITIATE SCOUTING (new partners technologies)
24
How to create an appropriate culture for OI
4
DEVELOP AN IP STRATEGY
25
How to create an appropriate culture for OI
5
BROADEN OUTREACH TO ADDITIONAL STAKEHOLDERS such
as customers and employees
26
How to create an appropriate culture for OI
6
LET EVERYONE KNOW THAT THE COMPANY IS OPEN TO
INNOVATION The role of OI portals
27
How to create an appropriate culture for OI
7
TRANFORM EXISTING RELATIONS
28
How to create an appropriate culture for OI
8
BUILD A KNOWLEDGE BASE MEASURE PROGRESS
29
How to create an appropriate culture for OI
9
COLLABORATE WITH PEER ORGANIZATIONS
30
How to create an appropriate culture for OI
10
CREATE ACCOUNTABILITY
31
Interactive poll 3

• What are the three most important of the 10 steps
  that companies should follow to create and
  cultivate a successful open-innovation program?
• Create a need list
• Define the companys core competencies
• Initiating scouting
• Develop an IP strategy
• Broaden outreach to additional stakeholders
• Let everyone know that the company is "open" to
  innovation.
• Transform existing relationships into strategic
  relations
• Build a knowledge base
• Collaborate with peer organizations
• Create accountability

31
32
QA
32
33
References (1/2)

• Chesbrough, H. (2003). Open innovation The new
  imperative for creating and profiting from
  technology, Harvard Business School Press,
  Harvard Boston.
• Chesbrough, H. (2006). Open innovation Business
  Models How to thrive in the new innovation
  landscape, Harvard Business School Press, Harvard
  Boston.
• Coppolino, A. (n.d.). Open innovation and
  creativity conceptual framework and research
  propositions. Unpublished manuscript, University
  of Messina.
• Grimaldi, M. (2012). Assessing and managing
  intellectual capital to support open innovation
  paradigm. World Academy of Science, Engineering
  and Technology
• Herzog, P. (2011). Open and closed innovation
  Different cultures for different strategies, 2nd
  edition, Gabler Verlag, Germany

33
34
References (2/2)

• Ihl, C., Piller, F., Wagner, P. (2012).
  Organizing for open innovation - aligning
  internal structure and external knowledge
  sourcing. Informally published manuscript, RWTH
  Aachen University.
• Mortara, L, Napp, J., Sladk, I. And Minshall, T
  (2009), How to implement opn innovation, IfM,
  University of Cambridge.
• Mortara, L., Minshall, T, 2011. How do large
  multinational companies implement open
  innovation? Technovation, 31 586-597.
• Piller, F. (2010). Open innovation readiness.
  TIM-Group at RWTH Aachen University,

34
35
We acknowledge contributions of ESADE MSc
students Silvia García, José Miarnau, Marc
Rovira, Nahikari Zuasti, Alandra Stadler, Sanna
Gräno, Johannes Papp, Maximilian Almayer-Beck
35