OPEN INNOVATION  AND   DYNAMIC CA PA BILITIES FOR  INDUSTRY  &  GROWTH Alar Kolk [email_address] [email_address] www.alark...
B uilding New Innovation Capability to Identify Future Opportunities <ul><li>I dentify  N ew  G rowth  O pportunities </li...
four levels of innovation business model innovation product & service innovation process innovation technology innovation
Revenue Growth, Life Cycle &  Innovation Dynamics Business model innovation has captured the attention of executives taske...
idea!
but there is no common language
Our current  market Our new  market Other firm´s market O pen  i nnovation Henry Chesbrough ,   2004 External technology i...
interdisciplinary approach
 
 
 
Open Innovation means that valuable ideas can come from inside or outside the company (industry) and can go to market from...
D ynamic capabilities as the firm's ability to integrate, build, and reconfigure internal and external competences to addr...
Developing Portfolio of Capabilities Ope rational  Capabilities Technological Capabilities  Transforming Seizing Sensing O...
think outside-of-the box
At any given point in time, firms must follow a certain trajectory or path of competence development. This path not only d...
we re-invent the wheel
.. . improve it
Learning & Diversity Boeing VP  Dick Paul  &   CTO  David O. Swain   went to P&G and asked how they were getting ideas and...
user-centered
 
 
 
P latform leaders (companies that drive industry wide innovation for an evolving system of separately developed pieces of ...
 
GROWTH &  OPEN   BUSINESS  MODEL The business model provides a coherent framework that takes technological characteristics...
20 senti 2 0  krooni 2 krooni 30 – 70 krooni
.. . execute -> project portfolio
the big picture  (business model)
how do you  earn  your  money  with this business model?
Traditional (product) value chain versus  Modern (business model) value chain
The business model mediates between technical and economic domains Over the years, entrepreneurs have been mostly known fo...
Portfolio of Capabilities & Business Model Open Capabilities Dynamic Capabilities Operational Capabilities Technology Capa...
how do you  change  a business model  and innovate ?
how do you  measure  the  success  of a business model?
strategic fit
… evaluate, learn and redesign -> manage improvement
.. . select the right teams and people -> make responsible
.. . outline key indicators to follow -> choose measures
 
OPEN INNOVATION  AND   DYNAMIC CA PA BILITIES FOR  INDUSTRY  &  GROWTH Alar Kolk www.alarkolk.com [email_address] [email_a...
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Open Innovation

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  • These old models of innovation are not agile enough to keep product pipelines stocked and differentiate companies from their peers. As a result, forward-looking organisations have sought ways to transform the process of innovation itself in order to create differentiation and sustainable value. This has led to the adoption of a radical new 'open innovation' model.



    It's a new approach that contrasts clearly with the monolithic R&D model, where innovation is the responsibility of a relatively small number of research parks or academic institutions. Instead, 'open innovation' describes business models that complement internal innovation processes with external resources.



    A global innovation marketplace has emerged - one where innovation itself is valued as a commodity that can be bought and sold, loaned, licensed, hedged and re-invested. In this open model, organisations can draw on external resource and best practice to amplify the value of their own innovation assets - and achieve greater real returns on their overall investment in innovation.
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  • The central idea behind open innovation is that companies cannot afford to rely entirely on their own research, but should search new knowledge from other companies.
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  • Open Innovation

    1. 2. OPEN INNOVATION AND DYNAMIC CA PA BILITIES FOR INDUSTRY & GROWTH Alar Kolk [email_address] [email_address] www.alarkolk.com
    2. 3. B uilding New Innovation Capability to Identify Future Opportunities <ul><li>I dentify N ew G rowth O pportunities </li></ul><ul><li>D efine & Implement New Innovation Strategies </li></ul><ul><li>G enerate & Deliver Better Ideas </li></ul><ul><li>R enew Organizatonal Capabilities </li></ul>
    3. 4. four levels of innovation business model innovation product & service innovation process innovation technology innovation
    4. 5. Revenue Growth, Life Cycle & Innovation Dynamics Business model innovation has captured the attention of executives tasked with achieving growth in the face of increasing competitive pressure. Business model innovation suggests that if you took an existing product and repackaged how you sold it, you can hold off competitive pressures and even capture entirely new market segments.
    5. 6. idea!
    6. 7. but there is no common language
    7. 8. Our current market Our new market Other firm´s market O pen i nnovation Henry Chesbrough , 2004 External technology insourcing Internal technology base External technology base Internal/external venture handling Licence, spin out, divest
    8. 9. interdisciplinary approach
    9. 13. Open Innovation means that valuable ideas can come from inside or outside the company (industry) and can go to market from inside or outside the company (industry) as well 1 . This approach places external ideas and external path to market on the same level of importance as that reserved for internal ideas and paths to market during the Closed Innovation era 2 . CLOSED & OPEN BUSINESS MODEL OPEN INNOVATION! 1,2 H.Chesbrough, 2003
    10. 14. D ynamic capabilities as the firm's ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments 1 . S ome dynamic capabilities integrate resources (product development; strategic decision making), others focus on reconfiguration of recourses (knowledge brokering) within firm and other dynamic capabilities are related to the gain and release of recourses (knowledge creation routines; alliance, acquisition and exit routines) 2 . EXPLORATION & TRANSFORMATION DYNAMIC CAPABILITIES Roald Amundsen, Robert Scott, Umberto Nobile 1 Teece et al 1997 2 Eisenhardt and Martin 2000
    11. 15. Developing Portfolio of Capabilities Ope rational Capabilities Technological Capabilities Transforming Seizing Sensing Open Capabilities Dynamic Capabilities Learning Innovation
    12. 16. think outside-of-the box
    13. 17. At any given point in time, firms must follow a certain trajectory or path of competence development. This path not only defines what choices are open to the firm today, but it also puts bounds around what its internal repertoire is likely to be in the future 1 . Collaborative know-how is a particular type of knowledge that determines whether companies can develop specialized knowledge via expertise and then use it to obtain further benefits 2 . STEP OUT OF THE BOX!!! PATH DEPENDENCY We had become stuck in our past and weren’t stretching far enough to innovate new ideas , to “step out of the box.” D avid O. Swain , ex. CTO, Boeing 1 Teece et al, 1997 2 Simonin 1997
    14. 18. we re-invent the wheel
    15. 19. .. . improve it
    16. 20. Learning & Diversity Boeing VP Dick Paul & CTO David O. Swain went to P&G and asked how they were getting ideas and how they were thinking about R&D. After the visit they remarked, “P&G had some great thoughts, which affected what we did; we went home and did a couple of things differently and that was an example of us beginning to open our eyes to the world and trying to integrate that into our planning process
    17. 21. user-centered
    18. 25. P latform leaders (companies that drive industry wide innovation for an evolving system of separately developed pieces of technology) are navigating challenges from wannabes (companies that want to be platform leaders) and complementors (companies that make ancillary products that expand the platform’s market. Platform leadership is the ability of a company to drive innovation around a particular platform technology at the broad industry level . Cusumano and Gawer (2002)
    19. 27. GROWTH & OPEN BUSINESS MODEL The business model provides a coherent framework that takes technological characteristics and potentials as inputs, and converts them through customers and markets into economic outputs 1 . A business model has two functions: 1.Value creation 2.Value capture 1 Chesbrough, Roosenbloom 2002
    20. 28. 20 senti 2 0 krooni 2 krooni 30 – 70 krooni
    21. 29. .. . execute -> project portfolio
    22. 30. the big picture (business model)
    23. 31. how do you earn your money with this business model?
    24. 32. Traditional (product) value chain versus Modern (business model) value chain
    25. 33. The business model mediates between technical and economic domains Over the years, entrepreneurs have been mostly known for technical innovations. And there are many great companies that have been built on top of technical innovations like Intel, Cisco, Oracle, Apple, and arguably Microsoft. If you think of Federal Express, Google, Netflix, these companies were built on business model innovations. <ul><li>Business Model: </li></ul><ul><li>market segment </li></ul><ul><li>value proposition </li></ul><ul><li>value chain </li></ul><ul><li>c/profit mechanism </li></ul><ul><li>value network </li></ul><ul><li>competitive strategy </li></ul>Economic Outputs: e.g., value, price, profit Technical Inputs: e.g., feasibility, performance Measured in technical domain Measured in economic domain
    26. 34. Portfolio of Capabilities & Business Model Open Capabilities Dynamic Capabilities Operational Capabilities Technology Capabilities Portfolio
    27. 35. how do you change a business model and innovate ?
    28. 36. how do you measure the success of a business model?
    29. 37. strategic fit
    30. 38. … evaluate, learn and redesign -> manage improvement
    31. 39. .. . select the right teams and people -> make responsible
    32. 40. .. . outline key indicators to follow -> choose measures
    33. 42. OPEN INNOVATION AND DYNAMIC CA PA BILITIES FOR INDUSTRY & GROWTH Alar Kolk www.alarkolk.com [email_address] [email_address]
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