Cesar Castro Open Innovation Presentation

Open Innovation and the Future of Organizations Cesar Castro cesar@discoverycast.com Founder and CEO DiscoveryCast, Inc. © Copyright 2010 DiscoveryCast, Inc. all rights reserved  

1 ‐ Open Innova,on  Strategies  Topics Topics 2 ‐ Preparing for The  8 ‐ Brainstorming /  New Innova,on  Idea,on  Paradigm  3 ‐ Innova,on in an  6 ‐ Examples / Case  Increasingly  Studies  Collabora,ve  Environment  5 ‐ GeIng Started:  4 ‐ Managing  Developing An  Conﬁden,ality / IP  Innova,on Strategy  © Copyright 2010 DiscoveryCast, Inc. all rights reserved   2

My Background  1980’s   1990’s   2000’s   Today  © Copyright 2010 DiscoveryCast, Inc. all rights reserved  

Innovation is……. (to be filled in later) © Copyright 2010 DiscoveryCast, Inc. all rights reserved   4

Open Innovation is…… (to be filled in later) © Copyright 2010 DiscoveryCast, Inc. all rights reserved   5

What Has Changed In The Innovation Landscape? IBM CEO Survey - March 2006 © Copyright 2010 DiscoveryCast, Inc. all rights reserved   6

Innovation Is Everywhere Seeing the unseen or,  Op,mizing the value crea,on   “…the eureka moment…”  opportunity  Scien,ﬁc Discovery  Technological Innova,on  New Market Insight  Market / Retail Innova,on  New Produc,on / Process Insight  Supply Chain Innova,on  New Business / Financial Insight  Business Model Innova,on  New HR Policies  Human Capital Management  Innova,on  New Social / Ecological Insight  Social Innova,on  Regulatory / Legisla,ve Change  Business / Marke,ng Innova,on  © Copyright 2010 DiscoveryCast, Inc. all rights reserved  

What is Open Innovation? (traditional definition) Closed Innovation Model Market Revenue Open Market Innovation Revenue Model plus New Revenue © Copyright 2010 DiscoveryCast, Inc. all rights reserved   8

New Explanation of Open Innovation suppliers  re6rees  Large firms/ social networks individual firm  Academia/       SME’s  innova6on  group  Individuals/  consultants  customers  compe6tors  INTERNAL INNOVATION © Copyright 2010 DiscoveryCast, Inc. all rights reserved   9

New Explanation of Open Innovation Open Innova*on  Begins  Internally, Then Goes External  suppliers  re6rees  Large firms/ social networks individual firm  Academia/       SME’s  innova6on  group  Individuals/  consultants  customers  compe6tors  INTERNAL INNOVATION AND EXTERNAL INNOVATION © Copyright 2010 DiscoveryCast, Inc. all rights reserved   10

Why Is Open Innovation Important?     Companies have…..      lowered their cost of innovaAon      brought new ideas to old problems      generated new revenue streams      accelerated the rate of innovaAon  © Copyright 2010 DiscoveryCast, Inc. all rights reserved   11

Open Innovation Strategies © Copyright 2010 DiscoveryCast, Inc. all rights reserved  

Open Innovation Requires A Portfolio Approach Internal External Indirect Direct Social © Copyright 2010 DiscoveryCast, Inc. all rights reserved   13

Characteristics of An Open Innovation Approach Rapid Prototyping of Ideas Distributed Diversity Shared Anyone Can Financial Contribute Risk Share and Co- create IP © Copyright 2010 DiscoveryCast, Inc. all rights reserved   14

How To Prepare For The New Innovation Paradigm © Copyright 2010 DiscoveryCast, Inc. all rights reserved  

Principles Of The New Innovation Model Develop More Transparency Engage with networks Embrace community Competitors can be collaborators Discourage the “Not Invented Here” syndrome Engage with failure Maintain a “memory” bank of successes/failures © Copyright 2010 DiscoveryCast, Inc. all rights reserved   22

FailCon © Copyright 2010 DiscoveryCast, Inc. all rights reserved  

Key Skills For Individuals Learn to frame the question properly Think of yourself as a solution finder Learn to collaborate and share Stay informed with filtered information   © Copyright 2010 DiscoveryCast, Inc. all rights reserved   24

Key Skills For Companies Prioritize and incentivize innovation Move to a higher risk profile Adapt the company structure Reinvent company culture Promote experimentation and weather change  25

Innovation in an Increasingly Collaborative Environment © Copyright 2010 DiscoveryCast, Inc. all rights reserved  

Engagement in social networks The Engagement Ladder Source: Forrester Research © Copyright 2010 DiscoveryCast, Inc. all rights reserved   27

Managing Confidentiality / Intellectual Property © Copyright 2010 DiscoveryCast, Inc. all rights reserved  

Confidentiality/Intellectual Property RULE #1  Not every challenge / technology need is  suitable for external innovaAon  © Copyright 2010 DiscoveryCast, Inc. all rights reserved   29

Confidentiality/Intellectual Property     Look for opportuniAes to share non‐confidenAal        informaAon first      Framing the quesAon can also help manage        confidenAality      Risk‐taking needs to be higher       80 /20 rule (80% of of corporate IP is not uAlized)     IP ownership is shiWing; small businesses are accounAng       for more and more of the innovaAon pie (patents,       technology, etc)  © Copyright 2010 DiscoveryCast, Inc. all rights reserved   30

Getting Started © Copyright 2010 DiscoveryCast, Inc. all rights reserved  

Getting Started The innovation dial 32

4 Strategies to Leverage External Networks Creative Bazaar Jam Session emergent INNOVATION TYPE Orchestra MOD Station defined central diffuse NETWORK LEADER Source: The Global Brain, 2008 © Copyright 2010 DiscoveryCast, Inc. all rights reserved   33

✖  MIT Open CourseWare

✖  Nokia

✖  Kraft Innovation Portal

✖  My Starbucks Idea

✖  Clorox

✖  Intuit

✖  Dell Ideastorm

✖  Unilever

✖  Android OS

Key Takeaways     Open InnovaAon is all about culture change      PorZolio approach is important      Social networks are part of innovaAon      Framing the quesAon is a criAcal skill      ConﬁdenAality  / Intellectual Property CAN be managed      Diversity of the network is important  © Copyright 2010 DiscoveryCast, Inc. all rights reserved   46

Bibliography The Open Innova6on Revolu6on, Stefan Lindegaard, Wiley ,  2010.   The Global Brain, SaAsh Nambisan and Mohanbir Sawhney,  Wharton School Publishing, 2008.  Open Business Models, Henry Chesbrough, Harvard Bus. School  Press, 2006.  Crowdsourcing, Jeﬀ Howe, Random House, 2008.  Open Innova6on: The New Impera6ve for Crea6ng and Proﬁ6ng  from Technology, Henry Chesbrough, HBS Press, 2003.  © Copyright 2010 DiscoveryCast, Inc. all rights reserved   47

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Cesar Castro Open Innovation Presentation

by DiscoveryCast, Inc. on Aug 13, 2010

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