Point:  Innovators can use various tactics to evaluate (Manitowoc), protect (J&J), bridge (Whirlpool), and ferry (J&J) innovations across inevitable organizational gaps.

Story: Innovation in large organizations often faces obstacles due to the natural divisions within the firm.  Gaps can occur between risk-taking vs. risk-avoiding groups, diverse business units, and functional silos.  Open innovation adds a fourth type of division: that between the investor/buyer of an innovation and the inventor/seller of an innovation.  Presenters at the 2nd Annual Open Innovation Summit discussed these four different types of gaps and some methods for carrying innovation across the gap.

Johnson & Johnson highlighted the first gap, which occurs between groups involved in long-term innovation versus those responsible for short-term operations.  On one hand, the near-term viability of a firm depends on minimizing risk and costs while consistently delivering value to the customer.  On the other hand, the long-term viability of the firm depends on spending money to finding new, more competitive and more productive ways of delivering value to the customer.  Whereas failure might be essential to innovation, failure can be fatal to operations.

To help handle this very natural and necessary gap, J&J created COSAT (Corporate Office of Science and Technology) to provide a sanctuary or sandbox for new innovations (including external ideas).  This sanctuary protects the innovation from the rightfully risk-averse operations side of the organization; it also protects operations from the rightfully risk-taking innovation side.  In addition, COSAT provides low levels of funding (about $50k to $250k of angel-style capital) to help keep projects alive until the organization is ready for them.

A second kind of gap occurs in large, diversified companies.  For example, J&J has more than 250 divisions that make everything from over-the-counter painkillers to in-the-body artificial hips. The diversity of regulations (consumer products, pharmaceuticals, medical devices), markets (consumers, retailers, physicians, surgeons), and technologies (consumer products, drug chemistry, high-tech materials, and electronics) means that innovations in one part of the organization — even innovations that failed — might be useful in a different part of the organization.

To address this second gap, J&J’s COSAT helps ferry ideas from their source (from both inside and outside the company) to potential applications at the different divisions of J&J.  This ferrying process includes:

• aggregating good ideas from across the J&J portfolio of companies and outside sources
• validating ideas with key opinion leaders inside J&J
• providing low levels of funding to keep good ideas alive
• brokering ideas to different divisions.

Whirlpool described a third kind of gap, one that’s caused by functional silos.  Each functional department (engineering, manufacturing, marketing, HR, IT, legal, etc.) has its own metrics, goals, and performance pressures that drive that department’s tactics.  But these finely-tuned local optimizations can cause different departments to operate at cross-purposes to each other.  The result is problems such as local protectionist tendencies within silos, barriers to coordination between silos, and money-wasting misalignment in the organization.

Whirlpool’s solution is to bridge the gap between silos through aligned strategy and common processes in combination with communications and training that engage the organization. Whirlpool uses strategy reviews to help the silos see the bigger, shared picture of the organization’s future and the role of innovation in that future.  Whirlpool cascades its overarching goals down to local goals so that the silos support rather than hinder the overarching goal.  A combination of common processes and flexible teams helps create broad organizational engagement.  Communication and web-based training called Whirlpool Foundations (see Communication in Open Innovation post) help everyone in all departments understand the key role of innovation.

Finally, crane and food service company Manitowoc describes a special type of gap that is felt most keenly in open innovation: the expectations gap between the investor/buyer of the innovation and the inventor/seller of an innovation.  Whereas  inventors often see their precious inventions in terms of the millions in revenues it might reap, the investor or buyer of the innovation sees the potential of millions in costs that the innovation will almost certainly incur.  Not only does the situation create a valuation gap, but inventors may feel a parental instinct toward their invention and expect the buyer to not modify the invention.  This gap can create ill-will, broken negotiations, or stall an open innovation implementation.

To deal with this gap, Manitowoc evaluates potential open innovations on five dimensions:

1. the current level of development of the idea
2. the status of intellectual property
3. the potential for competitor workarounds of the idea
4. the degree of technical competitiveness offered by the innovation
5. the expected business impact.

Manitowoc also looks at the technical and business experience of the inventor when deciding whether and how to craft a deal (e.g., patent assignment, acquisition, or joint venture) with the inventor.

Overall, these four gaps reflect the world’s natural diversities in a complex business and technical environment.  Different people in different divisions, departments, and roles really are different.  Rather than homogenize everyone, these four companies found ways to evaluate (Manitowoc), protect (J&J), bridge (Whirlpool), and ferry (J&J) innovations within a gap-filled context.  These gap-handling tactics increase the effectiveness of innovation processes.

Action

• Determine if the innovation is ready to cross the gap (and worth bringing across the gap)
• Use a sanctuary to protect the innovation from hostile forces on the other side of the gap (and to protect the people on the other side of the gap from disruption by the innovation)
• Use communications to bridge the gaps: explain to both sides the respective benefits of bridging the gap (e.g., why the operational side needs the innovation, and why the innovation needs to be operationalized)
• Create a ferrying process or group to help develop, broker, and transition innovations across the gap.

Point: Good communication skills drive open innovation and collaboration

Story: At the World Research Group’s 2010 Open Innovation Summit, many presenters stressed the role of communication for both innovation leaders and in promoting open innovation initiatives.  Top-notch communication skills with senior executives, peers, partners help drive open innovation success.

Stefan Lindegaard, author of the The Open Innovation Revolution, and Greg Fox, Senior Director & CMO – Strategic Alliances at Cisco, held an invitation-only Think Tank group at the Summit to identify and discuss the key qualities of leaders of open innovation.  The group ranked communications in the top three characteristics (vision and adaptability were also key).  The Think Tank group emphasized the importance of leaders using a deliberate communications strategy with holistic internal and external communication.  Good open innovation leaders have the confidence to share what they know but also maintain proper disclosure limits with open innovation partners.

Nona Minnifield Cheeks, Chief, Innovative Partnerships Program Office, NASA Goddard Space Flight Center noted that consistent messages and behavior (i.e., walking the talk) improve trust and outcomes. It’s vital to establish clear sense of why the organization is doing open innovation, set context, and create sense of urgency, Cheeks said.

In addition to Think Tank members, other presenters at the conference concurred about the crucial role of communications in innovation.  For example, Dr. Gail Martino, Principal Scientist in the Open Innovation Group at Unilever, described seven soft skills communicators need to persuade, inspire and garner support for open innovation efforts. Communication involves being a good listener, she said, to build trust and feel empathy for others’ situations. At Unilever, top-notch communication skills include a balance of being convincing but also being an advocate for the partner.  Balanced communications also include conveying both the rewards and risks of innovation, not just mindless cheerleading.

Moises Norena, Director of Global Innovation and PMR at Whirlpool Corporation, described how Whirlpool aligned innovation to strategy through Whirlpool Foundations, which communicated to all employees and helped transcend silos. Whirlpool develop training programs for all levels of employees, including a mandatory half-hour web course that taught all employees about Whirlpool’s innovation strategy and created common language for innovation at the appliance maker.  Cisco‘s Sharon Wong recommended that open innovation platform operators communicate simply and often to maintain excitement and interest in the open innovation effort.

Jeff Boehm, Chief Marketing Officer of Invention Machine, focused his presentation on the role of communications as driver for innovation, collaboration and revenue.  He explained why and how marketing or internal communications supports the use of a good innovation platform and satisfaction of top-management mandates.

Boehm suggested that three key elements are necessary — but not individually sufficient — for creating successful, ongoing innovation programs. First, offering a powerful platform for innovation helps but doesn’t guarantee that innovation occurs.  A “build-it-and-they-will come” approach doesn’t work because too many people are too busy to take the time to find and participate in even the most exciting innovation initiative.

Second, top-down mandates may be necessary for engaging busy people, but mandates alone aren’t sufficient to ensure innovation participation, either.  Employees typically assume that daily operational pressures trump innovation mandates, so it’s easy for them to short-change innovation or allow it to slip out of awareness over time.  That implies using a third element — marketing or internal communications — to reach users, communicate the value of the program, remind them of mandates, and convey the excitement and accomplishments of the effort. For example, putting an innovation icon onto employee badges creates a natural reminder and talking point about the effort.

Boehm, who has extensive experience leading these communication efforts, listed the following four actions as the critical steps for internal communications the drive participation in innovation initiatives:
Action:

1. Make innovation relevant. Ask different users (executives, peers, functional silos, external partners, etc.) about their struggles and challenges and show how the innovation initiative can help them.
2. Promote innovation. Create a roadmapped stream of communications that spans time and multiple channels (e.g., lunchroom posters, emails, newsletters, tent cards, tchotchkes, badges) to reach, inform, and encourage people to participate.
3. Provide easy calls to action for innovation.  Avoid obstacles such as convoluted registrations, approvals processes, and delays.
4. Sustain the momentum of innovation with ongoing communications.  Continuously relay successes, platform improvements, ongoing activities, training, and new information to avoid attenuation of attention to innovation.

Open Innovation Summit Think Tank Members:

• Greg Fox, Senior Director & CMO – Strategic Alliances, Cisco
• Dr. Andrew G. Gilicinski, Director, R&D – Innovation Networks, Clorox
• Jeff Boehm, Executive Vice President & Chief Marketing Officer, Invention Machine
• Dr. Jan M.K. Jaferian, VP Intellectual Property Manitowoc Foodservice
• Stefan Lindegaard, Founder & Chief Facilitator, 15inno.com
• Nona Minnifield Cheeks, MBA, Chief – Innovation Partnerships Program Office, NASA Goddard Space Flight Center
• Andrea Meyer, MLIS, President, Working Knowledge

To join the 2nd Annual Open Innovation Summit LinkedIn group, click here.

Point: You may not be able to predict the future, but you can prepare for it by tracking early trends and staying open to disruptions.

Story: What will the web look like in 20 years? Stuart Miniman of the Office of the CTO at EMC Corporation asked me to contribute my thoughts on this, as part of EMC’s ON magazine celebration of the web’s 20th anniversary.

My predictions for 2030? I know that I don’t know, but I do follow some heuristics that are helpful regardless of which future materializes.

“You can’t predict the future,” said Google’s Eric Schmidt back in 1993 when he was president of Sun Technology Enterprises (a subsidiary of Sun Microsystems). “But you can estimate it.  Your estimations are based on understanding the model of technology.”  Schmidt’s mental model of technology involves looking at underlying drivers and expecting innovation from anywhere. “Don’t think your company is the best and will be the first to come with an innovation in your area.  That attitude will lead you to become blindsided.”

With that in mind, here are two trends I’ll be watching closely for emerging innovations:
* Geo-Spatial Data and Semantic Smarts

Consider these facts by Jeff Jonas, IBM Distinguished Engineer and Chief Scientist, Entity Analytic Solutions, IBM Software Group:

Mobile devices in America are generating something like 600 billion geo-spatially tagged transactions per day. Every call, text message, email and data transfer handled by your mobile device creates a transaction with your space-time coordinate, whether you have GPS or not. Every few minutes, it sends a heartbeat, creating a transaction whether you are using the phone or not.

The implications? Companies can use data analytics to learn unprecedented amounts of information on their customers (how far they travel, locations where they hang out, the people they hang out with). It may sound like big brother, but some consumers are already turning this into a big game and social lifestyle with the help of companies like Foursquare, Loopt, Brightkite, etc. There’ll be opportunities for companies to use this data combined with web-based data to serve their customers better.

With every device and service gathering more and more data and becoming more connected, systems will begin to “understand” the meaning of the data to give people what they want.  I don’t know if real AI will ever happen, but with all the available data, social tools, and clever people building clever companies, it seems that devices are going to act like they know the meaning behind the data and and take or suggestion actions to help you. For example, if your cellphone knows your calendar’s next appointment, your location, and gets the Tweets about the traffic jam on the highway, it can alert you to leave a little earlier or alert whomever you’re meeting that you’ll be late.

* Social/Distributed Decision-Making

Knowledge-intensive tasks such new product and service development will be aided by enterprise-wide collaboration systems with built-in voting, reputation systems, and predictive markets.  These concepts were envisioned by MIT Prof. Thomas W. Malone before the Web as we know it even existed. His publications, such as Computers, Networks and the Corporation, describe the organizational changes that networked computers would bring.

Tom Malone now heads the Center for Collective Intelligence at MIT. The center’s basic research question is:  How can people and computers be connected so that—collectively—they act more intelligently than any individuals, groups, or computers have ever done before?

I think one of the most powerful uses of the web in the future is for crowdsourcing and open innovation to tackle some of the world’s biggest problems.  Take, for example, that Innocentive just announced a GlobalGiveback Innovation Challenge Set to help solve some of the world’s water problems through open innovation. Other crowdsourcing platforms like ideas4all.com are enabling entrepreneurs to suggest product, service and business ideas to win funding.  The web will enable collaboration on a global scale that will let us marshal our creative energies to tackle global issues.

What do you think?

And, yes, whatever the future brings, there’ll be an app for that.

Action

• Look for things that are becoming ubiquitous but aren’t being used as much as they could be.
• Avoid self-centered attitudes about the future. Just because you don’t want to be tracked doesn’t mean others don’t want to be tracked or that someone won’t create a fun and rewarding reason to change your mind about tracking.
• Look for chocolate+peanut-butter combinations like geo-spatial data + semantics.
• Test out some crowdsourcing platforms (ideas4all.com is public and ongoing) to get a feel for how they work. Consider how you could apply them.

Sources:

EMC’s ON magazine: The Web at Twenty

Jeff Jonas: Your Movements Speak for Themselves

Eric Schmidt at the University of Colorado-Boulder, February 9, 1993