Common Fears of Starting an Open Innovation Initiative

Adding external elements to an internal innovation program can prove a true rite of passage. The transition requires an open culture, employee empowerment, and executive commitment. In other words, considerable maturity (1).

At our recent annual customer forum, INNOVATE Bonn 2019, I invited Fujitsu’s Head of Ecosystem Engagement, Andy Seferta, to join me in leading an interactive workshop on external innovation programs. In the workshop, participants explored how the practice of open innovation is impacting businesses everywhere as well as how they can benefit by introducing an open innovation initiative. During the workshop, we challenged the 30 participants to think about common fears related to external innovation initiatives and how to resolve them.

The three main fears that surfaced were managing intellectual property, establishing and scaling the open innovation program, and not communicating effectively. If any of these issues have kept you from starting an open innovation initiative, read on to learn how you can address them and implement an open innovation initiative without worry.

Applying for too much intellectual property (IP) protection

Collaboration with external partners seems to be at odds with the very purpose of IP management. That is, to protect/provide exclusive control over certain ideas. In reality, the strategic use of IP or complete avoidance of it can enhance the returns on open innovation instead of crippling them.

While engaging in open innovation can lead to unintended spillovers, focusing too much on IP can make valuable collaborators such as startups and small- to mid-sized enterprises less willing to collaborate.

To address this potential issue, innovation leaders should look to:

Understand that IP protection is not at odds with open innovation; often, IP protection is entirely unnecessary
Use an NDA (Non-Disclosure Agreement) and simplify contracts if IP is necessary
Engage commercial and procurement early into the IP discussion
Adjust their attitude towards IP in the context of open innovation; many organizations are worried about control/ownership (e.g., in a highly regulated industry) – others have no intent on any ownership at all (partnership and qualifying capabilities of partners more important)
Refine their organization’s approach to IP in general by focusing on lasting relationships as opposed to quick wins

Designing the right process for scaling the open innovation program

Some innovation leaders fear that engaging in open innovation will likely result in an inability to process the information received. However, by approaching the right partners and putting the correct knowledge exchange mechanisms in place, an external input can be quickly and effectively absorbed/followed up on.

Open innovation can overwhelm, but only if left undirected. This is precisely why innovation leaders should:

Carefully steer the direction of open innovation programs; additionally, align them to the corporate strategy/strategic direction of the company
Start small and demonstrate value early on; reach out to those stakeholders that have a vested interest in your business – e.g., known suppliers, B2B customers, and even universities; next, work with unknown suppliers (startups), customers, and the community
Engage stakeholders progressively, without paralyzing the organization/department that initiates the collaboration
Use enterprise innovation software as well as other tools to help address scale issue

(Mis)communication

Not everyone understands open innovation in the same way. Open innovation will often mean different things to different internal stakeholders (marketing, sales, R&D, procurement, HR, etc.) as well as to external ones (suppliers, researchers, customers, etc.). To some people, open innovation could mean buying some patents. To other people, it might be building networks. There also might be miscommunication around the purpose of the program, resulting in your internal audience feeling like they're being replaced by external people as opposed to being empowered to work with externals.

To address potential communication issues, leaders should:

Empower open innovation champions to promote collaborative innovation and help everyone align; in this process, be aware of the “Not Invented Here Syndrome”
Acknowledge that open innovation requires a special language, which is often buried in certain departments and not shared by the organization as a whole
Provide transparency regarding the progress of the open innovation program and encourage honest reflection; just like with internal innovation management programs, external programs will require several iterations
Moderate communications on your platform so conversations around open innovation are appropriate and productive; encourage communication between various stakeholders – especially if they are more distant – e.g., unknown suppliers
Plan resources (budget, staff) and prepare for some unpredictability
While some departments will be naturally more open to open innovation, others will be more reluctant to engage; understanding the differences and providing training can help

Additional things to think about

In a nutshell, addressing the fear of IP-related complications, the fear of scaling, as well as the potential miscommunication, represent three essential first steps in establishing a healthy open innovation program. Once these fears (and others like them – such as the fear that open innovation cannot be “closed”) are out of the way, innovation leaders can look to develop their capabilities and engage more meaningfully with their partners.

As they proceed with their developments, however, leaders should also keep in mind that open innovation programs, just like any other innovation initiatives, are not ends in themselves but rather a means to an end. In other words, collaborations with academia, suppliers, customers, etc., often serve bigger purposes that go beyond the actual campaign/challenge. These goals can relate to digitizing the organization, achieving customer-centricity, enacting large-scale, societal change (collective impact creation), becoming a solution partner of choice, and so on.

Finally, innovation managers must put some basic structures and processes in place to help create continuity for their open innovation programs. In other words, they must look to institutionalize the process of collaborating with various audience groups and address any cultural issues that might emerge in this respect.

Additional reading:

Endnotes:

The maturity of organizations varies greatly with respect to open innovation. From thinking about it, just started, experimenting, and having some progress to reasonable experience over recent years with a variety of partners.