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Knowledge & Innovation Management
1) The document discusses how open innovation and knowledge management can work together to drive innovation. It argues that most innovation comes from outside an organization and that true innovation requires accessing diverse sources of knowledge. 2) Key principles of open innovation discussed include making it a collaborative process where ideas are shared rather than protected. This allows organizations to leverage knowledge from a wide network rather than relying solely on internal R&D. 3) Knowledge management plays a role in open innovation by capturing both tacit and explicit knowledge, managing intellectual property, and facilitating knowledge sharing across organizational and sector boundaries. When combined, open innovation and knowledge management represent a new paradigm for innovation.
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Knowledge & Innovation Management
- 1. The Future ofBusiness - at the Crossroads of Knowledge & Innovation Management Assemblée générale du CIO-Club Wallonie/Bruxelles Jeudi 1er avril 2010 à 17 heures - Cercle de Wallonie Christian De Neef Fast Track Consulting – Brussels
- 2. Understanding Innovation… Every solutionto a problem has already been found/applied elsewhere! Possibly in another context, industry or even scientific context industry, discipline… Innovation is happening/can happen anywhere Organizations that are “open” to innovation will ultimately reap the benefits
- 3. Understanding Innovation… Let’s lookat the “invention” of the Light Bulb! First electric light: Humphry Davy (1800) English scientist connected wires to a battery and a piece of carbon, the carbon glowed, producing light (an electric arc) Carbon paper filament: Sir Joseph Wilson Swan (1860) worked well, but burned up quickly Carbon filament i an oxygen-free bulb: Th C b fil t in f b lb Thomas Alva Edi Al Edison (1879) experimented with thousands of different filaments 40 hours 1500 hours! Tungsten filament: William David Coolidge (1910) lasted even longer than the older filaments… until?
- 4. Understanding Innovation… Successful Innovation requires a vast amount of the right Knowledge Domain Specific detailed, focused, precise , ,p Other Knowledge broad, open, and… often surprising! Is there any good reason to believe that this Knowledge would be available “in” your organizations, rather than “outside”? y g ,
- 5. Innovation Levels Invention A new, so far inexistent scientific concept/creation “Researchling” A solution found in another discipline of science p “Borderling” A solution found IN ANOTHER sector or industry “Knowling” A solution found WITHIN the sector or industry “Actling” Actling A simple, easily found and almost standard solution… i l il f d d l t t d d l ti True Invention represents only a fraction of a % of Innovation…
- 6. Some Key Principles SolutionDriven Few tools/techniques exist that deliver solution direction, most of them only analyze problems… Customer Driven Organizations must listen to “the voice of the customer” Innovation that is not adopted, is not innovation! p , Focus on Function In-depth understanding of “function” allows us to find fundamentally different solutions, not incremental change, but… y , g , change of paradigm! Systems evolve towards “ideality” “function without resource”
- 7. The Innovation Paradox… The greater the potential of an idea, the harder it will be to find anyone willing to try (and adopt) it! Rejecting new ideas is mostly unrelated to their potential Samuel Morse vs. Alexander Graham Bell Sony's Betamax vs. JVC's VHS So it’s not about Knowledge… Is it about Culture & Change?
- 8. “If HP onlyknew what HP knows, we would be much more profitable” (former CEO Lew Platt)
- 9. Knowledge & InnovationLevels Invention “Researchling” “If we only knew what Academics & Science know…” Cross-scientific collaboration, etc. C i tifi ll b ti t “Borderling” “If we only knew what Organizations Worldwide know…” Multi-sectoral collaboration, technology databases, etc. “Knowling” “If we only knew what Our Industry knows…” Benchmarking, professional associations, certification, etc. “Actling” Actling “If we only knew what Our Organization knows…” l k h tO O i ti k ” Norms, standards, common knowledge, reuse, etc.
- 10. A New InnovationParadigm… Traditional Innovation The New Paradigm g Inside the organization Open and collaborative R&D is confined to a Everyone can have a brilliant specialized department new idea Patents k P t t keep ideas f id from Ideas are shared, challenged, Id h d h ll d spreading/being applied tested Knowledge is power Knowledge is opportunity Up to recently, more than 90% In 2005, IBM made 500 Linux of Procter & Gamble’s 27000 related patents available to the patents remained unused… community for free… Traditionally, organizations protected ideas that they had developed but did not market…
- 11. A New InnovationParadigm… How does Open Innovation work? Networks of organizations Extended to users/clients Unique complementary capabilities Working in collaboration This requires different skills, different culture from protecting to… Sharing from isolation to Collaboration to… These are the new sources of competitive advantage!
- 12. A New InnovationParadigm… Why this (r)evolution? We live in an exponential world The complexity of products & services is increasing It is no longer possible to master all skills and competencies There is a new supply of low-cost high-capability labor New economies develop unique skills and capabilities Today’s technology is a facilitator for Collaboration The new philosophy - Winning by sharing! p p y g y g
- 13. A New InnovationParadigm… What is Collaboration? NOT subcontracting NOT outsourcing These work for Production, not for Innovation NOT offshoring Collaboration in Innovation means… Sharing globally dispersed Knowledge Acknowledging strengths and weaknesses of each partner Accessing distant capability Leveraging new capabilities Sharing i k Sh i risks and benefits db fit Rewarding the ideas, not just the effort...
- 14. A New InnovationParadigm… Critical Mass More ideas - Crowdsourcing Integrated capability Influence User base Lower R&D Costs Labor Materials More/Better Collaboration Ideas Innovation Infrastructure Superior Capability Agility Skills Competencies Skill & C t i Process/Product Expertise Conversation Contextual g Knowledge Market knowledge & access Partners and Suppliers Local Networks Government Connections
- 15. A New InnovationParadigm… Eli Lilly Procter & Gamble Launched Innocentive (2001) Launched InnovationNet Focus on Pharmaceutical Internal network for Innovation Industry Management Open to all scientists to Focus on P&G’s 7 500 scientists contribute (solvers) Open to 18 000 users worldwide Open to all companies to buy Cross functional, cross organizational (seekers) 10 million documents online Functioning in a very competitive landscape Focus on KM & (internal) Social Media Establishes anonymous 30 000 + patents searchable connections The Success Story Focus on Crowdsourcing When searching for ways to control Not sharing participants’ IP water hardness and improve detergent performance, P&G The Success Story developed a metal ion control Eli Lilly found a new way to technology it has reapplied to mass produce butanoic acid in toothpaste, calcium-enhanced toothpaste calcium enhanced fruit 7 months - it might have taken drinks and bone-strengthening two years in their own labs! pharmaceuticals!
- 16. A New InnovationParadigm… (P)eople Communication and motivation Recognition and rewards Managing different cultures Working in distributed teams (P)rocesses (B)usiness (T)echnology Outcomes! An Innovation “methodology” KM Platform Distribute work - integrate Distributed development components Standardization – interfaces Capture best practices Traceability KM Processes (O)rganization Centralized/Distributed Management Support Structure/Team Principles & Policies A need to develop new competencies competencies…
- 17. Understanding Knowledge… Unless we change our behavior, global warming may be at the origin of unseen catastrophes The difference of 0.3 C cannot be explained 0 3°C statistically and may point to climate change During the Summer, the average temperature for Brussels is 18.1°C. Over the past decade, the average was18.4°C 18.1 – 18.4
- 18. Understanding Knowledge… Tacit Knowledge Explicit Knowledge 80-85% 15-20%
- 19. Understanding Knowledge… Why are some “experts” performing better than ot e s others? What’s their secret? How can this expertise be transferred? Tacit K T it Knowledge = 80% of l d f all Knowledge in the enterprise...
- 20. Knowledge Management… “KM isthe process through which organizations generate value from their Intellectual and Knowledge-based assets Knowledge based assets” Intellectual Capital (patents, copyrights, trademarks, brands, registered designs, trade secrets and processes, licensing and partnering agreements) People (including relationships with people in outside organizations and professional bodies) Published reference material f Products and services etc.
- 21. Knowledge Management… Tacit Explicit Socialization Externalization Team work Capture Tacit Coachingg Diffusion Mentoring Learning Understanding g Organization Explicit E li it Communication Classification Internalization Combination The Knowledge-Creating Company, Nonaka and Takeuchi, 1995
- 22. How KM supportsInnovation… Abstract Abstract Problem Solution Problem Specific Specific Specific Solution Analysis Problem Specific Solution(s) Implementation Solution(s) Solution(s) Innovation Management Knowledge Management
- 23. A New InnovationParadigm… Focus is NOT on Do Know reducing cost but on on’t increasing value WHAT? Creating a relationship that allows you to go W where your competitors can’t follow you (on their Know own) Blue O Bl Ocean Strategy… St t Know Don’t Know HOW?
- 24. Open Innovation… Howto make it work? Find the right partner(s) Must be WIN-WIN relationship in terms of capability, potential be e ts, s a g s s, etc. benefits, sharing risks, etc Define specific (smart) objectives Open Innovation is not open-ended… Establish clear roles and responsibilities Manage expectations and avoid conflict Clear rules of engagement Focus on people, not technology Know what you will do with the resulting IP Ownership & revenue O hi Provide for exit scenarios Innovation remains a risky business And… And Open Innovation requires Knowledge Management!
- 25. Conclusions Knowledge Management &Open Innovation 2 different disciplines Complementary A natural fit KM fills the gaps, creates opportunities for the g p pp future of Innovation Knowledge Management ‘+’ Open Innovation A powerful mix f l i Interesting future for Innovation Management A lot more research is required…