Creating and Connecting Communities of Innovation

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Innovation, whether traditionally executed or open, is widely identified as a key ingredient in any business strategy, however not all organisations are successful in delivering real, leveraged value through innovation. Even after decades of public and corporate attention innovation still encounters internal silo thinking & political barriers. Now Open Innovation is identified as the next “big thing” in innovation, raising expectations of explosive business growth. How many companies are really ready, internally and externally, to delivering it?

www.xpotential.co.uk

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Creating and Connecting Communities of Innovation

  1. 1. Creating and Connecting Communities of Innovation Steve Sowerby Dr Kevin McFarthing XPotential Innovation Fixer ESOMAR Innovation Detonation Barcelona, 15 November 2010
  2. 2. Communities of Innovation • Building a community of innovation starts with mindset • There are practical steps needed to create communities • The internal innovation community needs to be created before moving externally • There are several different external communities that can be created
  3. 3. The Formula for Innovation Acceleration Rate of innovation connectivity between people Degree of connectivity intensity of community
  4. 4. The Formula for Innovation Acceleration Intensify the community By Strengthening connections With A sense of common purpose Supported by Leadership Process People Leading to More innovation
  5. 5. Community • Common purpose • Clear and distinct identity • Sense of belonging and contribution • It’s how you feel • It’s what you do
  6. 6. Building an internal innovation community
  7. 7. It’s all about the brand
  8. 8. Case study example: Beiersdorf • Organisation focused on creating and delivering brand equity • Development of the centralised process trained across 1500 individuals • Organisational changes to reflect innovation focused roles and responsibilities • Corporate challenge to focus on bigger, better, faster and fewer innovations with supporting KPIs
  9. 9. Skills and competencies of the “complete innovator” • We can identify the characteristics and behaviours of individuals and teams required for becoming the “complete innovator” • Assessment tool, Pathfinder, can enable organisations to identify individuals and develop team to maximise innovation
  10. 10. Characteristics of the complete innovator Ch g in an er ge st Fo To be really innovative requires an attitude and work environment that fosters innovation, and new ideas that could improve the way things are done. G en er at ng in An innovative idea must be g ivi The guiding premise of The Dr embraced by the organization before it can be Complete Innovator asserts implemented. Anyone who that developing unique, clever, Im tries to implement without imaginative and creative new ideas is the starting point of pl s “buy in” will only isolate ea em those whose support is vital. establishing change in an Id organisation. en ta tio The complete process of n innovative change requires the ability to convince, persuade, excite and motivate others to embrace new ideas and to go beyond our natural tendency to seek the status quo.. t W in en ni itm ng m om
  11. 11. Key success factors for the internal community • Obsessive focus on the consumer and the brand • Leadership from the top cascaded through leaders across the organisation • Common language and process • A deep understanding of the characteristics of a ‘complete innovator’ • A willingness to break the rules of the classical organisational structure
  12. 12. Building an external community
  13. 13. Innovation needs to change From command and control, vertically integrated, resource controlling TO A sense of community with diverse partnerships, seamlessly integrated with the core company USING Networking, relationships, structures, processes and trust
  14. 14. Brand communities Company Intermediaries Consumers BRAND Inventors Lead users Suppliers
  15. 15. Brand communities Company Intermediaries Consumers BRAND Inventors Lead users Suppliers
  16. 16. User Communities
  17. 17. LEGO® Mindstorms • Programmable robotic and mechanical version of LEGO • Estimated 40,000 users (20k “AFOLs”) spending ~$10k per year • Much of LEGO’s design is done by their community, and the MUP (Mindstorms User Panel) • They are open source – they’re not a software company
  18. 18. LEGO® Communities • LEGO club • Brickjournal.com – ~3 million members • MasterBuilders – >8 million visits a • LEGO-certified month professionals – Average visit 28 minutes • AFOLs • Lugnet.org • LEGO Ambassadors • 1000steine.de • FirstLEGOLeague.org • Brickshelf.com (MOCs) • LEGO learning • Brickish.co.uk institute • Brickmaster • Designbyme.lego.com • BrickLink
  19. 19. Supplier communities
  20. 20. Building an external community • WIN BALANCING – If an Open Innovation project comes off, everybody wins – If it doesn’t, Clorox compensate the supplier – There is always money on the table for the supplier – so they come back to Clorox • Clorox “HiveLive” site – Crowdsourcing – OI meets social networking – Direct access to large company – Indirect search for solutions – Blog 22
  21. 21. Building an external community 23
  22. 22. Nestle • “Sharing is winning” philosophy • Nestle shares its future needs for all its business units with innovation partners • Work to a Master Joint Development Agreement • Intellectual Property ownership principle – Every physical solution is owned by the competency-providing partner – The smart applications are owned by the receiving party (Nestle) • >$200M from new business in 2009 24
  23. 23. Key learnings for supplier communities • Key suppliers selected on basis of importance of business to both companies • Key information shared on both sides • Everyone understands the reward system at the start ―Nestle – “sharing is winning” ―Clorox – “win balancing” • Relationships are worked at
  24. 24. Technology research communities
  25. 25. External research communities • Eindhoven High Tech Campus • 1998 – Philips relocates all NL-based R&D to Eindhoven • 2003 – opens up the campus to other companies • 2010 - 100 companies and 8000 researchers “The hotspot for human-focused innovation”
  26. 26. So how? Leadership, process, people
  27. 27. “We’ll look at ideas from anywhere. Some come from our competitors; we see if they are doing something new and see if we can do it better. We’re not proud.” Set the target of delivery – full stop. Bart Becht, CEO Bart Becht, CEO
  28. 28. “Inventors are evenly distributed in the population, and we're as likely to find invention in a garage as in our labs.” Set the goal of delivering 50% of ideas coming from outside P&G. A G Lafley, CEO Bart Becht, CEO
  29. 29. Core processes • Integration of external partners to internal processes • Market research • Strategic Alliance processes • Software – From Microsoft Project to integrated systems like PAM (Alliantist) Idea Gate Define needs Gate Prototype Gate Production Analysis
  30. 30. People • Technology Scouts need – Experience – Wide knowledge – An engaging personality – Empathy – Street “savvy” – Negotiation skills – A sense of humour – Courage • Communities need communicators
  31. 31. People • Unilever train Open Innovation staff in 7 soft skills – Intrapreneurial skills – Relationship building – Strategic influencing – Quick study – Tolerance for uncertainty – Balanced optimism – Passion
  32. 32. The Formula for Innovation Acceleration Intensify the community By Strengthening connections With A sense of common purpose Supported by Leadership Process People Leading to More innovation
  33. 33. Ultimately – Innovation
  34. 34. needs minds
  35. 35. processes
  36. 36. and Communities
  37. 37. Thank you!!
  38. 38. The Authors Steve Sowerby: An experienced Business Professional, Dr Kevin McFarthing: Marketer, General Manager & Senior An innovation specialist with over Consultant with over 30 years 25 years of senior executive corporate and consultancy experience experience including his recent across numerous categories including position as Head of Strategic FMCG, pharmaceuticals, financial Alliances at Reckitt Benckiser where services, luxury goods & food. An he led the development of RB’s inspiring and articulate speaker, Steve open innovation portal. An has recently presented to professional inspiring global expert on Open audiences around the world on the Innovation, Kevin has presented on topic of “Building Brands in Turbulent the topic in Germany, USA and UK Times”
  39. 39. Who are XPotential? XPotential is a brand focused strategy consultancy that helps to align individuals, functions and organisations throughout the world to create and deliver Brand Value. We work with some of the world’s biggest brands to deliver outstanding results. We orientate individuals and teams in the organisations to focus their responsibilities to deliver value to their most important asset - their brand. We are proud to have worked with over 30 companies in over 50 countries and touched tens of thousands of individuals, delivering some of their most impressive business results. We do this through working closely with the leadership of organisations to develop Brand Centric Vision and Strategy through a deep understand of the challenges and opportunities for the Brands and the Company, the Brand Vision and the key audience for change. We then design and implement a programme of brand centric change including communication, engagement, training and follow up. We have worked both cross functionally and also through specific areas including sales, supply chain, innovation, marketing, R&D, finance and HR. www.xpotential.co.uk
  40. 40. What is Innovation Fixer? Innovation Fixer improves the output and impact of your innovation. Starting with an Innovation Checkup using the Innovation Fixer Wheel© as the framework, we deliver perceptive recommendations and implementation of real improvements. WORKING WITH INNOVATION FIXER We are passionate about innovation and what it can do for business. That’s why we want to help. We will deliver a perceptive assessment of what you can change to improve the growth delivered by innovation, with clear recommendations for action. You’ll find us easy and straightforward to deal with. We won’t disappear too early (unless you want us to, of course). We’ll be there to guide and mentor you through the implementation stages of the project, but at the same time ensure that you implement and own any changes you make. WHY INNOVATION FIXER? Innovation Fixer is led by Dr Kevin McFarthing based on many years of experience at the heart of innovation, the last 17 years spent with Reckitt Benckiser (RB). RB have an outstanding track record in innovation, and are in the top 20 companies of the UK FTSE 100. Kevin has leading edge senior experience in Open Innovation, Strategic Alliances and R&D. He has led product development in many areas, including consumer healthcare, household products, prescription medicines, diagnostics and molecular biology. His passion for innovation includes exploiting it no matter what the source, using resources efficiently and delivering fantastic products and services. Innovation Fixer also works closely with experienced consultants and associate companies with expertise in key areas. www.innovationfixer.com

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