Management and Commercialization of Open Technovation: the emerging economies’ dilema by Musa Khumalo

30th Anniversary SCIP International Conference & Exhibition
GAME CHANGERS: Exploring Innovative Intelligence
MAY 11 – 14, 2015 | ATLANTA MARRIOTT MARQUIS | ATLANTA, GEORGIA
www.SCIP2015GameChangers.com #SCIP
Musa Khumalo
Business Intelligence Consultant
IQ Business (South Africa)
mukhumalo@iqbusiness.net
+27 73 058 6071

Who is the real game changer?
MANAGEMENT AND COMMERCIALIZATION
OF OPEN TECHNOVATION,
THE EMERGING ECONOMIES’ DILEMMA

THE STORY, IN SHORT
• Innovation – Open & Closed
• The death of an idea
• Commercialization
• The “Game changer”

OPEN OVER CLOSED INNOVATION
The Closed Innovation pipeline Source: Chesbrough (2003)

The Open Innovation pipeline Source: Chesbrough (2003)

OPEN INNOVATION SUCCES STORIES
• GE ‘Ecomagination’ Challenge
• Cisco Entrepreneurs in Residence program
• Samsung Accelerator
• Shell GameChanger
• Google for Entrepreneurs program
• Proctor & Gamble Tremor Competitive Intelligence
• Dell IdeaStorm Ideas and Insights
• Kraft First Taste Testing

?
>1.43 million apps
>50 billion applications downloaded (July 2013)
71% of mobile developers develop for it (2013)
>over one billion active monthly users
largest installed base of all general-purpose OS’s

…BUT ALL THIS ISN’T WHY I’M HERE…
INNOVATE. AND THEN WHAT ?

THE COMMERCIAL IMPERATIVE
Innovation – should be new and value creating
- Joseph Schumpeter, 1942

What lies between ideas and outcomes? Source: Dan Maycock

Breaking the product or service into the market
• Nokia – ‘The curious case’
• Kodak – ‘What’s wrong with the picture?’
• Xerox – ‘The faded copy’
• The Great Depression – do we blame Henry Ford or
Innovation?

THE INNOVATIVE LEADER:
CANDIDATES FOR GAME CHANGERS
• Invest substantially in the management process from
beginning to end
• Risk-taking is calculated and delivery is not left to chance
• Combined with open innovation streams, more ideas are
considered and less, but better quality, of those ideas are
developed
• All stages of the product or service realization process are
approached consciously, as part of an innovation strategy
• Innovation strategy itself is part of the bigger corporate
business strategy

I had a friend, who was very smart. He got everything
right but I barely got much right… today he’s a Microsoft
Software Engineer
- Bill Gates

PROPONENTS TO THIS CASE
None of my arguments is new:
“What the customer buys and considers value is never a product. It is always utility – that is, what
a product does for him.”
– Peter Drucker, Management: Tasks, Responsibilities, Practices
“People don't want to buy a quarter inch drill. They want a quarter-inch hole!”
– Ted Levitt, Marketing Myopia
• McKinsey
• A.T. Kearney
• Harvard Business Review
• Gartner
• Forrester

WHY EMERGING MARKETS?
• That’s where I come from and I have vested
interest
• Research says the global economic engine is now
being powered by the southern hemisphere
• Emerging markets were the most resilient in the
global economic meltdown
• Therefore, no longer are they just ‘emerging’
markets – these are ‘opportunity’ markets

FORWARD STEPS
• Bridge the IT/Business divide – integration and
partnerships among business units
• IT strategy a part of business strategy (a predominant
problem in non-IT enterprises)
• The Innovation – Innovation Management –
Commercialization continuum.
• Shift of delivery focus from IT-driven to business-driven
• Elimination of innovation roadblocks (status quo,
resources, silos, tools)
• The 3-tier framework for the innovation dilemma:

(OPEN) INNOVATION
- Idea
- Product
- Service
- Dimensions & degrees
INNOVATION MANAGEMENT
- Leadership
- Integration
- Engagement
- Selection
- innovation strategy, implementation
- organisational (corporate) structure, culture
COMMERCIALIZATION
- Market(ing)
- Sales
- Evolution
FDI forces
Innovation policy
External supplier
pressure
Pressure to catch-up
The “rising market” tag

INNOVATION. SO NEAR, YET SO FAR
• “Failure Age” – The New York Times
• This is not an exhaustive piece - it doesn’t ask
all the questions that need to be asked. It begs
for relevant answers to the plight of many,
perhaps too many, an enterprise.

MY CONCLUSION
1. Why take the lonely path? Open up your
Innovation function
2. Managing the development & commerce of an
idea is a sterner test than its advent
3. Innovate or die? Nonsense. Sell or die !

BUT WHY DO I CARE?

Qs
• Innovation & commercialization are both
valuable, but not of equal weight, what’s more
valuable and why ?
• Same resources, very different results: is
business acumen perhaps ‘in-built’ ?
• Do you agree that I’ve been talking bulls**t
the whole time? If you don’t, why ?

Management and Commercialization of Open Technovation: the emerging economies’ dilema by Musa Khumalo

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Management and Commercialization of Open Technovation: the emerging economies’ dilema by Musa Khumalo