Which Department Should be Driving Open Innovation?

Posted by Graham Buchanan on Mar 19, 2018 8:03:20 AM

Research and Development? Human Resources? Procurement? Marketing? Open innovation is still relatively new to a lot of organizations and impacts many areas. Consequently, there is not always a department or person that has open innovation explicitly under their purview.

At InnoCentive, we have people from a range of job functions and seniority levels reach out to us, wanting to learn more about our offering. Each has slightly different reasons for doing so.

In this article, I outline what we have seen as the primary motivator for four different departments that we regularly interact with at InnoCentive. Hopefully, this can help empower others to take action and build their business case for open innovation.

Research and Development

Top motivator: Bringing in diverse perspectives and expert minds to solve pressing problems and free up internal teams to work on other priorities.

Technology is becoming cheaper yet more R&D expenditure is needed to maintain levels of productivity. The majority of patents registered today are a recombination of existing technologies rather than entirely new, and a complete reversal from what we’ve seen historically. Against this backdrop, a change in approach is needed. Open innovation can transform the economics of innovation by sharing risk and allowing for knowledge exchange across industries, while recombination thrives on diverse networks. To give one example, by working with InnoCentive NASA were able to end a three-year roadblock in their search for new methods for measuring the strain of Kevlar and Vectran at elevated temperatures. One of the winners of the Challenge had no formal background in material science, finding his winning insight instead from his time at medical college.

This Challenge allowed the team to continue on with other priorities; they do not have time to stop.”

Tom Jones, Deputy Project Manager, Research Lunar Surface Systems

Procurement

Top motivator: Having a ready-made ecosystem of potential partners that can quickly, directly and cost-effectively deliver valuable solutions that are tailored to requirements.

The role of procurement is changing. Their focus is shifting from primarily delivering savings, contract coverage, and risk mitigation to more strategic responsibilities, which is demonstrated in the rise of Innovation Driven Procurement (IDP) groups. A report from Capgemini found that the top priorities for IDP groups included delivering more innovations in less time, accelerating design and launch cycles, improving product/service price-quality ratio, and increasing the end customers’ experience/satisfaction. InnoCentive can help Procurement teams deliver on these aims by providing a diverse global network, actionable ideas and solutions in as little as 60 days, and a touchpoint for end users. CPOs are ideally placed to define and engage in external partnerships, while networks like InnoCentive’s are a natural extension of those already managed by procurement teams.

“Procurement plays an increasingly important role in helping R&D collaborators set up the right ecosystems and the right partnerships, [allowing] us to generate future innovations.”

SVP of a pharmaceutical company (quoted in a report from Oliver Wyman).

Marketing

Top motivator: Exposing branded Challenges to a large and diverse global network and engaging directly with end-users.

The Marketing department has many responsibilities, including branding, market research, internal communications, and sales support. But understanding and articulating customer needs are becoming perhaps the most important and as a consequence, the role of marketing in product development is increasing.

“Today, marketing touches almost every aspect of the business. It’s critical to understand and articulate customer needs and preferences [..] but marketers also have to understand the industry, trends, how research is evolving, and how to maximize opportunities to sell equipment and systems.”

Ingrid Blair, VP for Business & Marketing at 3M (quoted by CMO.com)

Open innovation allows organizations to cost-effectively connect and engage with thousands of potential end-users, understand the state of the art, and increase brand awareness. Dow Chemical Company, turned to InnoCentive to crowdsource ideas that could accelerate the commercialization of oil-soluble Polyalkylene Glycols in existing or new markets. Dow ended up awarding $15,000 to two potential applications, one for addressing eye disease and the other for providing better environmental and sustainable standards for the oil, gas and mining sectors. Not only did the Challenge allow Dow to address a key need, it provided exposure for their new technology and brought them closer to their end users. For Lisa Inoue, Strategic Marketing Leader at Dow, innovation competitions like this “help Dow rally scientists to advance the realm of innovation”.

Human Resources

Top motivator: Gaining access to a virtual, on-demand workforce without adding a penny to payroll (or more paperwork).

The Talent Management function of Human Resources (HR) now goes beyond hiring and firing and compliance with employment regulations. HR anticipates organizational needs and identifies where the talent pools may reside, inside and outside the four walls of the firm, and how best to access them reliably and cost-effectively. The end goal is no longer managing a physical workforce, rather it is ensuring access to the right talent at the right time for the organization to deliver against its mission. Flexibility and agility are key. Through open innovation providers such as InnoCentive, connecting and engaging with external talent becomes extremely straightforward: a vast network of diverse talent is at your fingertips; tried-and-tested templates for ‘Challenge Specific Agreements’ are available; and an experienced team supports you throughout the entire process.

“With new technology, we shouldn’t think we are going to invent everything ourselves. Collaboration based on risk-sharing is going to become very important [and] HR has to be hugely involved, making sure it’s not just about graduate recruitment, but goes all the way to R&D.”

Toby Peyton-Jones, HR Director at Siemens (quoted in HR Magazine)

 

Ultimately, there is no single department that is implementing open innovation within an organization. Driving forces such as declining productivity, competition, and resource scarcity alongside enablers such as our increasingly connected world have resulted in an increased focus on the customer and cross-company collaboration. Therefore it is a company-wide responsibility to be on the lookout for opportunities to bring in open innovation into their work.

Topics: Innovation Insights

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