Start Innovating Already: 13 Poisons to Open Innovation

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An somewhat irreverant intro to Open Innovation for advanced beginners. The presentation discusses 13 poisons (and their antidotes) to Open Innovation. …

An somewhat irreverant intro to Open Innovation for advanced beginners. The presentation discusses 13 poisons (and their antidotes) to Open Innovation.

Companies covered include AirBNB, Best Buy, LudoBites,Netflix, NPR, Starbucks, Saatchi & Saatchi, RelayRides and Threadless.

More in: Business , Technology
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  • 1. Start Innovating Already.A Punk View of 13 Poisons to Open Innovation& Building Engaged Communities
    Lisa ThorellRutgers University PDS - Keynote Address, June 7, 2011
    Off the Grid PR
  • 2. Build It All Yourself
    1
    POISON
    Source: © Henry Chesbrough, 2006
    Slow time to market High Fixed Costs Closed Pool of Talent
  • 3. That model arose in the early 1900s.
    Concerns of the day were…
    Economies of scale – Coordinating large numbers of people – Limit Liability
  • 4. Today we buy in more quickly…
  • 5. We throw out more quickly…
    18
    Months from purchase to discard of a cell phone for a person living in the US or UK.
    Months from purchase to discard for a cell phone user in Japan.
    The number of iPods you would own if you upgraded to every new iPod that had come onto the market from 2001 to 2009.
    12
    18
    Source: Rachel Botsman & Roo Rogers book ‘What’s Mine Is Yours: How collaborative consumption is changing the way we live (2011)
  • 6. Creating 100 gigapascals of pressure
    Source: http://www.mckinseyquarterly.com/The_challenges_ahead_for_supply_chains_McKinsey_Global
    _Survey_results_2706Nov 2010
  • 7. Also rocking our world…
    Source: McKinsey Quarterly Riding Asia’s Digital Tigers
  • 8. Rocking it still more: Hyper Innovation
    Source: Adrian Ott, The 24-Hour Customer: New Rules for Winning in a Time-Starved Always-Connected Economy
  • 9. What’s a way to go faster?
    Take in more ideas from outside?
    Spin out ideas for others to use?
    Solution: Punch more holes in the funnel.
  • 10. Open Innovation
    ANTIDOTE
    Source: © Henry Chesbrough, 2006
  • 11. Get to Market Faster
  • 12. Break into Partner Markets
  • 13. Transfer risk to someone else
  • 14. Make your customers crazy-scream with rage…
    …If they can’t get your product.
  • 15. Employees as Lifeblood
    2
    POISON
    Expensive fixed assets Salary independent of performance
  • 16. As Bill Joy said,
    “There are always more smart people outside your company than inside it.”
    Bill Joy,
    Founder, Sun Microsystems
    Partner, Kleiner Perkins
  • 17. Crowdsourcing:Lifeblood on steroids
    ANTIDOTE
    Example: Netflix $1 Million Challenge
    Pay only on Performance
    Off the Grid PR
  • 18. Crowdsourcing:Netflix $1 M Challenge
    ANTIDOTE
    Netflix $1 Million Challenge
    55,000 Engineers Enter
    A huge virtual workforce Decrease HR costs: Talent finds you!
  • 19. Crowdsourcing:Netflix $1 M Challenge
    ANTIDOTE
    Movie Recommendation Engine
    Improved 10%
    Problem Solved: 5 2 years
    Decrease Time to Market
  • 20. 3
    The Human Resources Department
  • 21. Hire People HR would Never Hire
    ANTIDOTE
  • 22. People HR would Never Hire
    ANTIDOTE
    1760 A self-educated clock maker invents longitude
    1990’s Design firm Ideo creates up the best-selling kid’s toothbrush by working with anthropologists
    A home-schooled coder invents WikiLeaks
    2007 An oil-industry outsider provides the solution for cleaning up oil spills borrowing from the concrete industry
    .
    .
  • 23. Diversity + Will-to-Win Trump Superstars
    ANTIDOTE
    Off the Grid PR
  • 24. Trad Market Research
    4
    Interviews
    Secondary
    Research
    Roundtables
    Focus Groups
    Surveys
    Great…brilliant clarity on the past Usually company internal
    Budget-constrained sample size
  • 25. Customer Crowdsourcing
    ANTIDOTE
    Up-to-minute 24 x 7 customer feedback
    Community vetted
    Social Proof of
    Open Brand
    MyStarbucksidea
    Build it? No!
  • 26. Customer Crowdsourcing
    ANTIDOTE
    • Over 100,000 ideas
    • 27. 100 ideas launched
    • 28. Note Starbucks did not
    build this. They license the platform from SalesForce.com
    MyStarbucksidea
    Build it? No!
  • 29. Profitability
    Animate with Annual Report, Investors, SEC sliding up under NI.
    You own a company thatsells a product, like tee-shirts
    5
    • Limits Shape-Shifting
    • 30. Makes C-levels risk-averse
  • You run a community thathappens to sell tee-shirts
    ANTIDOTE
    Decrease
    Time to Market
    Source: http://www.ithnk.com/category/co-creation/
  • 31. Share Community II(The Sequel)
    Play your community forward (new markets)
    ANTIDOTE
    Advertise
    Advertise
    Dell laptops – Havaianas flipflops– Griffin iPhone accessories
  • 32. Your BalkanizedWeb 1.0 Website 1.0)
    6
    You control. You make your customers come to you.
  • 33. Problem: In 2008 the average public radio station listener visited their local radio station website only 2x per month.
    Source: http://www.slideshare.net/davewrightjr/redesigning-nprorg
  • 34. Different NPR Customers needed
    Different news formats
    Differentplatforms
  • 35. GiveItAway GiveItAwayGiveItAway Now
    NPR Content For Free
    • 400,000 new stories
    • 36. 500,000 audio files
    • 37. 30,000 blog posts
    • 38. Content from dozens of NPR station affiliates
    ANTIDOTE
  • 39. An Open API for Developers to Access
    Result: more formats, more platforms
  • 40. Source: http://www.npr.org/templates/archives/archive.php?thingId=125099093
  • 41. Business as Usual
    7
    7
    Own the facility
    Build out a kitchen
    Operate set hours
    Serve familiar food
    Charge as much as the market will bear.
    Advertise in newspapers and radio
    Off the Grid PR
  • 42. Business Unusual: LudoBites
    Restaurant/ Kitchen
    Operate Std
    Business Hrs.
    Charge
    Market Prices
    Serve Familiar
    Food
    Advertise
    Borrow
    Someone
    Else’s
    Kitchen
    Announce by Surprise +
    Limited opening
    Pay Forward
    Savings
    Serve One-of-a-Kind
    Food
    Use
    Social Media
    Chef Ludo’s famous
    Cheese CupCake
  • 43. TheEconolapse
    “The main reason to thinkoutside the boxis there is no more oxygen leftinside the box.”.
    Lisa Thorell
  • 44. You need to own it to sell it.
    8
    Under-utilized assets Sitting inventory
  • 45. The The New Share Economy
    ANTIDOTE
    You broker others’ owned spaces.
  • 46. Better than Zipcar…
    ANTIDOTE
    Example companies how they do it.
    You can broker others’ under-used cars.
  • 47. ANTIDOTE
    Example companies how they do it.
    Saatchi & Saatchi showed you can even broker ad space in
    Out-of-the-Office email auto-replies.
  • 48. ANTIDOTE
    Example companies how they do it.
    To cost-share its rent fees, Best Buy is offering shelf space to other retailers.
  • 49. IP Control & Lawyers
    9
  • 50.
  • 51. Strategically Mine Knowledge
    ANTIDOTE
    Source: http://blogs.hbr.org/cs/2011/05/stop_obsessing_with_ip_rights-.html
  • 52. Netflix again…
    ANTIDOTE
    Database Shared
    Solution
    Gained
    Solution Shared
  • 53. ToToxic Boxes
    10
    Net Income
    Sales
    Revenue
    Taxes
    Operating Expenses
    Cost of Sales
    Regarding your industry cost structure as immutable & unassailable.
  • 54. The monsters who guard the Net Income box
    It’s not that I’m against
    fiduciary responsibility.
    It’s the fear of
    shape-shifting and
    risk aversion that the
    monsters can engender.
    Net income can be
    Increased by paying
    attention to
    other boxes…
    Annual Report
    SEC
    Investors
    Net Income
  • 55. Exploring NonToxic Boxes:
    Service Blueprinting
    ANTIDOTE
    http://priyankashetye.com/html/medsystem.html
  • 56. Business is serious stuff…
    11
  • 57. Gartner Forecasts 50% of Businesses will Gamify by 2015
    ANTIDOTE
    Use of leaderboards to inspire frequent use & competence-by-competition.
    Reward points that can be converted to product upgrades or discounts .
    Badges for frequent contributions, levels achieved, other milestones.
  • 58. How Many Prizes did Netflix Give away?
    ANTIDOTE
    http://offthegrid-pr.com/socially-responsible-pr/2009/9/28/six-marketing-lessons-of-the-netflix-crowdsourcing-experimen.html
  • 59. The Excruciating Politeness of Poser Innovation
    12
    Observation: OI consultants tend to PR their best client case studies.
    Open
    Innovation
    Whitewashing ->
  • 60. A Wikileaks for Open InnovationCase Studies?
    ANTIDOTE
    How can we learn if we can’t see
    the parallel universe of failures?
  • 61. Open Innovation as a “Try on”
    13
    No. Do or do not.
    There is no try.
  • 62. Open Innovation as a Necessity
    ANTIDOTE
    If they didn’t...
    LudoBites
    P+G Connect
    + develop
    NPR
    Threadless
    Another high-overhead restaurant in a
    recessionary economy.
    More small agile CPG competitors
    96% of listeners would not access online.
    Another commodity tee-shirt company
  • 63. Transformers ask…
    What can you build for others?
    Whose products/tech can you build on?
    Find New Markets
    Customers saying “Meh…”
    How do you get closer to your community?
    What assets do
    you have to barter?
    Decrease
    Time to Market
    What can you give away for others to build on?
    How do you motivate them to become addicted to your product?
    Decrease
    Fixed Costs
    Whose products/tech/space/people can you partner with?
  • 64. Moral of the story:
    Stomp on poisonous snakes.
    Transform.
    Start Innovating Already…
    Off the Grid PR