[SAMPLE] Open Innovation - Gateway to Breakthrough Ideas

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A three-page excerpt from the Best Practice Guidebook about open innovation.

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[SAMPLE] Open Innovation - Gateway to Breakthrough Ideas

  1. 1. growth team m e m b e r s h i p™A three-page excerpt from our 16-page Best Practice Guidebook:Open Innovation: Gateway toBreakthrough IdeasThe contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved.
  2. 2. growth team m e m b e r s h i p™ 1Best Practice GuidebookOpen Innovation*: Gateway to Breakthrough Ideas guidebook summary Firm: Amway Corp. (Health & Beauty Division) Industry: Consumer Goods Headquarters: Ada, Michigan, United States Geographic Footprint: Global Ownership: Private Revenue (2011): mway is one of a family of companies that A reported revenue of $10.9 billion USD Problem: Business Results: Amway needs to develop a process to draw on ideas and technologies Amway’s open innovation practices have led to: outside of the company and increase its capacity for systematically • 17 high-impact products launched in 55 markets identifying and developing breakthrough innovations. • $700 million (USD) in revenue Solution: Resources Required: Amway establishes an open innovation (OI) team to capture emerging • Dedicated team: a team manager and two or three technology scouts technologies and support the stage-gate product development process. • Systems: searchable database to centralize technology submissions Key steps include: • Budget: funding to evaluate or develop the technology • Creating a formal ideation process (discovery process) spanning need identification and entry in the stage-gate development process Applicability of Best Practice to Executive Functions: • Assessing the technical feasibility and market potential of new Function Applicability technologies RD/Innovation • Instituting project checkpoints for approval, resources, and funding • Establishing cross-functional engagement points between OI, Product Corporate Strategy Development, and Marketing Marketing * Open innovation is based on the tenet that ideas can come from anywhere, that they can be used throughout the new product development process, and that unused ideas can be utilized by other businesses, or new markets—or licensed externally.The contents of these pages are copyright © 2012 Frost Sullivan. All rights reserved.
  3. 3. growth team m e m b e r s h i p™ best practice guidebook 2 Amway institutes an open innovation process to identify and develop external technologies that address prioritized research needs Open Innovation (OI) Discovery Process Discover Evaluate and Refine Develop Advocate Stage-Gate Product Identify Needs Technologies the Technology a Solution the Solution Development Process Need* Technology Solution Potential Product Objective Objective Objective Objective Objective Objective Create a technology Identify external Evaluate each Translate the Submit the solution for Develop the solution map of prioritized technologies that technology’s feasibility technology into a entrance into the new into a market-ready needs address needs solution product development product process Participants Participants Participants Participants Participants Participants • Technology Planning • Technology scouts • Technology scout • Technology scout • Technology scout • Product Committee • Technology Review • Brand Manager • Marketing development team Board • Division’s global • Business Line • Marketing marketing team Management Team • Project Management Activities Activities Activities Activities Activities Activities • Identify a list of • Conduct • Conduct feasibility • Secure buy-in from • Present the solution • Cultivate the potential needs for comprehensive assessment based the business line’s to Marketing and project through the development research on on the relevant marketing team the Business Line stage-gate product • Prioritize needs and potential external development • Collaborate with Management Team development build a technology sources for category for the Marketing to for the go/no-go process plan technologies technology conduct concept decision on further • Assign needs to the • Carry out initial • Submit the development development appropriate RD viability screening technology to the and testing with • Place approved department of identified Technology Review customers solutions in • Assign team lead technologies Board for approval, • Create a business the product and technology resources, and case to illustrate development scouts to each need funding the solution’s process commercial and customer value * A “need” refers to any unmet customer demand, differentiating technology, or product component.The contents of these pages are copyright © 2012 Frost Sullivan. All rights reserved. Source: Amway Corp.; Growth Team Membership™ research.
  4. 4. growth team m e m b e r s h i p™ best practice guidebook 3 key takeaway: Create a dedicated open innovation team and give it a distinct role within RD Amway’s open innovation (OI) team is a separate department with its own budget and staff within RD Open Innovation Team’s Role within the RD Organization Business Case for a Dedicated Health Beauty Division, RD Department Open Innovation Team Vice President of Health Beauty RD Director of Health Beauty, RD Product Development Open Innovation (OI) Product Development VP of Health Beauty, RD Team: Beauty Division Team Team: Health Division Amway conducted a five-year analysis of its New Technology Manager innovation pipeline, which highlighted the organization’s disproportionate focus on The manager leads the OI team, defines the team’s role, and manages the incremental innovation. This realization spurred OI process. the business case for a dedicated OI team. Business Case Components • Explain how an OI team can create Technology Scouts* competitive advantage by: Technology scouts are veteran researchers with 10–15 years’ experience -- Focusing on long-term projects outside of in new product development. the stage-gate process Responsibilities -- Concentrating on breakthrough or • Identifying and evaluating new technology solutions disruptive technologies • Scouting for solutions to core business needs -- Identifying and incubating emerging technologies • Developing key relationships with suppliers and other OI sources • Bringing immature solutions to the appropriate level of technology • Differentiate the OI team’s purpose from readiness for transfer into the product development process Product Development’s role and articulate how it should integrate with Marketing • Present case studies from companies with Open Innovation Team’s Focus successful OI teams (i.e., Procter Gamble, The OI team spends 80% of its time on the discovery process, or the pre-stage-gate phase. The team spends the Kraft, and Pepsico) remaining 20% on managing projects through the stage-gate product development process. • Emphasize that the OI team would consist of six existing research staff and require no additional personnel * See page 13 of the Tools Resources section for a complete technology scout job description.The contents of these pages are copyright © 2012 Frost Sullivan. All rights reserved. Source: Amway Corp.; Growth Team Membership™ research.
  5. 5. growth team m e m b e r s h i p™ Please contact us to learn how to access the full Best Practice Guidebook or for information on Growth Team Membership.™ Email us GTMresearch@frost.com Visit us online www.gtm.frost.com Follow us on Twitter www.twitter.com/Frost_GTMThe contents of these pages are copyright © 2012 Frost Sullivan. All rights reserved.

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