Top Management in open Innovation

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MOOI Theme 2Top management in open innovation
Prof. Henry Chesbrough, University of
California, Berkeley ESADE Prof. Wim
Vanhaverbeke, Hasselt University, ESADE
National University of Singapore Dr. Nadine
Roijakkers, Hasselt University January 7, 2013
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Top Management in Open InnovationOverview
Innovation Overview

• Findings
• Support from top management is important
• Needs the right skills
• OI managed top-down or bottom-up?
• Implications
• Top management has to be committed
• Top management has to empower the OI Team
• Create OI strategy aligned with corporate
  strategy
• Have a CEO mandate

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FINDINGS
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Top Management in Open InnovationOverview
Innovation Overview

• Findings
• Support from top management is important
• Needs the right skills
• OI managed from the Top or Bottom up?
• Implications
• Top management has to be committed
• Top management has to empower the OI Team
• Create OI strategy aligned with corporate
  strategy
• Have a CEO mandate

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Top Management Finding 1 Support from top
management is important ovation Overview

• Findings
• Senior management support of an OI initiative is
  crucial to allocate resources and ensure there is
  both motivation and a mandate for culture change
  Rutledge H., 2012
• The support of top management is absolutely
  essential and we have it on a daily basis
  Thoen, 2011
• Senior leaders must understand and apply open
  innovation Slowinski Sagal, 2010
• Executive-level leadership is required, as is
  constant focus to reinforcing the message, and a
  clear understanding of the stakes Bingham
  Spradlin, 2011
• Top management support is instrumental in
  achieving OI rollout across the whole
  organisation Mortara et al., 2009
• Executive sponsorship needed (remove roadblocks
  and mandate participation) Sloane, 2012
• Link with Culture

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Top Management in Open Innovation Innovation
Overview

• Findings
• Support from top management is important
• Needs the right skills
• OI managed top-down or bottom-up?
• Implications
• Top management has to be committed
• Top management has to empower the OI Team
• Create OI strategy aligned with corporate
  strategy
• Have a CEO mandate

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Top Management Finding 2 Needs the right
skills ovation Overview

• Findings
• Senior leaders must develop and support the
  necessary skills Slowinski Sagal, 2010
• Link with skills development

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Top Management in Open Innovation Innovation
Overview

• Findings
• Support from top management is important
• Needs the right skills
• OI managed top-down or bottom-up?
• Implications
• Top management has to be committed
• Top management has to empower the OI Team
• Create OI strategy aligned with corporate
  strategy
• Have a CEO mandate

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Top Management Finding 3 OI managed top-down
or bottom-upvation Overview

• Findings (1/5)
• Real change is possible when managed from the top
  Bingham Spradlin, 2011
• Only CEO and board of director can drive the
  change needed to become a Challenge Driven
  Enterprise Bingham Spradlin, 2011
• Occasionally, senior management sees the need for
  OI, but mostly it is launched at the department
  level Sloane, 2012

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Top Management Finding 3 OI managed top-down
or bottom-upvation Overview

• Findings (2/5)
• TBX (O) approach Lindegaard, 2011
• Top down get executives on board and require
  personal commitment
• Bottom up Value creation begins with people.
  Involve and engage employees
• X across middle management has focus on their
  own profit-and-loss responsibility
• Outsiders external partners will bring
  knowledge, skills, experience,..
• 4 Ways to Open innovation Mortara et al., 2009
• Top-down, strategically-driven, centralised
  activities (mature)
• Top-down, strategically-driven, distributed
  activities
• Bottom-up, evolutionary, distributed activities
  (mature)
• Bottom up, evolutionary, centralised activities

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Top Management Finding 3 OI managed top-down
or bottom-upvation Overview

• Findings (3/5)
• TBX (O) approach Lindegaard, 2011 You need to
  work with 3 1 organizational approaches.
• Top down
• Get executives on board and make them personally
  commited to the innovation activities. Without
  executive support, no change occurs
• Bottom up
• Value creation begins with people, one by one,
  team by team. Nothing happens unless you get
  employees engaged and involved.
• X across
• The biggest challenges will come from middle
  management placed across e organiation due to a
  narrow focus their own profit-and-loss
  responsibility
• Outsiders
• External partners will bring knowledge, skills,
  experience, Include external resources as you
  move towards OI

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Top Management Finding 3 OI managed top-down
or bottom-upvation Overview

• Findings (4/5)
• 4 Ways to Open innovation Mortara et al., 2009
• Top-down, strategically-driven, centralised
  activities
• Top-down, strategically-driven, distributed
  activities
• Bottom-up, evolutionary, distributed activities
• Bottom up, evolutionary, centralised activities

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Top Management Finding 3 OI managed top-down
or bottom-up (5/5)
Top down Strategically driven

Distributed OI Activities
Centralised OI Activities
Bottom up Achieved by evolution
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Interactive poll 1

• What are the three most difficult roles of top
  management in implementing OI?
• Allocate resources for OI initiatives
• Ensure there are incentives for a cultural
  change
• Continuous support from top management
• Top management should understand OI
• Top managements role in achieving OI rollout
  across the organization
• Executive sponsorship (remove organizational
  roadblocks)
• Executive support for the development of the
  necessary skills

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implications
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Top Management in Open Innovation Innovation
Overview

• Findings
• Support from top management is important
• Needs the right skills
• OI managed top-down or bottom-up?
• Implications
• Top management has to be committed
• Top management has to empower the OI Team
• Create OI strategy aligned with corporate
  strategy
• Have a CEO mandate

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Top Management Implication 1
Commitmentvation Overview

• CEO must be deeply committed Lindegaard, 2011
• Top of organization must be committed in no
  uncertain terms and see it through to the end
  Bingham Spradlin, 2011
• Demonstrating commitment and support, top
  management holds the key to sway the opinion of
  those who feel less inclined to accept the new
  approach to innovation Mortara et al., 2009
• Executives must not only understand but also buy
  into the value proposition Sloane, 2012
• Commitment from the top down helps building the
  culture for OI Sloane, 2012
• Leaders must promote innovation and an
  entrepreneurial culture across the organization
  by being personally involved in establishing and
  implementing clear and relevant ways to support
  innovation Igartua 2010

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Top Management in Open Innovation Innovation
Overview

• Findings
• Support from top management is important
• Needs the right skills
• OI managed top-down or bottom-up?
• Implications
• Top management has to be committed
• Top management has to empower the OI Team
• Create OI strategy aligned with corporate
  strategy
• Have a CEO mandate

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Top Management Implication 2 Top Management
has to empower the OI Teamvation Overview

• Top management gives the fundamental push to
  establish an OI implementation team Mortara et
  al., 2009
• Create and empower the CDE task force Bingham
  Spradlin, 2011
• The innovation mandate should lay out the
  resources and authority given to the innovation
  team Lindegaard, 2010
• Innovation leaders must feel full support from
  executives Lindegaard, 2010
• Link with OI team

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Top Management in Open Innovation Innovation
Overview

• Findings
• Support from top management is important
• Needs the right skills
• OI managed top-down or bottom-up?
• Implications
• Top management has to be committed
• Top management has to empower the OI Team
• Create OI strategy aligned with corporate
  strategy
• Have a CEO mandate

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Top Management Implication 3 Align OI
strategy with corporate strategy Overview

• Top management should understand and buy into the
  creation of a tight link between innovation
  strategy and the overall corporate strategy
  Lindegaard, 2010
• Establish the CEO mandate Bingham Spradlin,
  2011
• Successful CEOs focus the organization on a small
  number of key initiatives and some choose a
  single theme or strategy that defines their
  administration
• A CEO mandate makes that everyone in the
  organization will understand the importance and
  commitment attached to this program by the CEO
• Never launch without a mandate from the CEO.
  Open Innovation cannot succeed if its cordoned
  off in RD. It must be a top-down, companywide
  strategy Huston Sakkab, 2006.

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References

• Bingham A Spradlin D. (2011) The Open
  Innovation Marketplace
• Igartua, J. I., Garrigós, J. A., Hervas-Oliver,
  J. L. (2010). How innovation management
  techniques support an open innovation strategy.
  Research Technology Management, 41-52.
• Lindegaard, S. (2009)/
• http//www.slideshare.net/StefanLindegaard/open-in
  novation-summit-stefan-lindegaard-presentation-264
  5946
• Lindegaard, S. (2010) The open innovation
  revolution
• Lindegaard S. (2011) Making Open Innovation Work
• Mortara, L. et al. (2009) How to implement Open
  Innovation
• Interview Rutledge H (Head of OI GSK) (2012)
• Sloane P (2012) A guide to open innovation and
  crowd sourcing
• Slowinski and Sagal (2010) Senior Management
  Roles in Open Innovation
• Interview Chris Thoen (PG) by Shaugnessy (2011)

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Interactive poll 2

• What are the three most important actions for top
  management to maximize impact? 
• Commitment
• Financial support
• Support to build culture for OI
• Good understanding of OI
• Establishment of OI-team
• Link between (open) innovation strategy and
  corporate strategy

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• QA