Category Archives: OI Practice

Articles dealing with the Open Innovation practices

Open Innovation barriers

Interview with Anders Hjalmarsson of Viktoria Swedish ICT, Götegorg, Sweden. Author of “Beyond Innovation contest: a framework of barriers to open innovation of digital services

 

Q: Hello Anders, thank you for your time today. We would like to discuss the main findings of your work related to the “Open Innovation barriers”, work that you have presented at the European Conference on Information Systems on June 9 2014.

To start with, could you say a few words about yourself, your interest and research areas?

A: Sure, thanks for the opportunity of this interview. At Viktoria Sweedish ICT I do research on Open Innovation applied to the transportation and automotive industry. I work together with public transportation authorities in Sweeden and Europe with the aim of creating a basis for digital Open Innovation based on Open Data.

Similarly we work with the car industry, namely Volvo who has interest in the digital innovation applied to their own industry.

Q: How does this study fit in your own and your department work and research projects ?

A: We have done a number of different research projects since 2009, including the “Innovation for sustainable everyday travel”, a 4M€ project spanning from 2009 to 2011. We created a hub for public transportation’s open data exploitation. The different Governmental organization in Sweden delivered their data and we created the web platform for new application to be developed. In 2010 we started thinking about the way to connect with the developers’ community. One thing we did was to organize a contest  “Travelhack 2013”, under the premise of “making every day transportation more sustainable”.

Q: Can you give us a one or two examples of applications that were developed during this hackathon ?

A: Yes, the winner was a mobile travel planner for people with cognitive dysfunctions. It helps plan the travel in detail from door to door and make public transportation accessible to these people. The first public version is expected shortly now on iOS and Android platforms. Another winner in the “make travel funnier” category is an app that matches your travel position with music that was composed in the area.

Q: These seem to be very interesting apps ! So how is it that your starting point in the paper is that many contests ideas do not transform into actual products or services ? What is the success ratio ?

A: As a matter of fact we have observed in our contest that the majority of these brilliant solutions just died, they don’t turn into viable applications. So we started to investigate the reasons why there was so much “waste” in these digital services contests, and the paper you are mentioning is the first result of this analysis.

We also realized a lack of analysis of innovation contest success and this calls for additional research on this topic going forward. Initially we made a simple comparison of three contests and found an average 9% of viable services (see table 1). When we presented this at ECIS2014 earlier this month we had comments that this percentage is rather high compared to other contests.

Naturally we wanted to understand the reasons for these wasted efforts and try and create a methodology that enables the organizers of contests to generate more viable services and to manage the post contest process to optimize the global outcome.

 OPEN INNOVATION BARRIER 1

 

Q: What was the methodology of your study ?

A: We have proceeded in three main steps:

  1. A comprehensive literature review related to open innovation barriers, we studied 24 papers from the most influential journals and found 179 factors that we have grouped into 10 categories.

  2. We interviewed teams involved in the Travelhack 2013 contest prior to the final and we established a list of anticipated barriers.

  3. We have then contacted the teams again two months after the contest and updated the list and the ranking of perceived barriers.

Q: So what are the main perceived barriers based on your data ?

A: The top 4 open innovation barriers as they were perceived after the contest are:

1) Lack of time or money to pursue the development of the application

People proposed applications because it was fun to participate in the hackathon but had no real plan or resources to take their applications to the market.

2) Lack of marketing competence/information

Most teams involved were from R&D and did not involve marketers so they  lacked half of the competences to move forward.

3) Weak value offering

As a consequence of the previous point, many teams did not work on a business model and realized later that the app was cool but had a limited added value.

4) Lack of partner cooperation for development

Once apps are developed, partners and distributors need to be involved and the teams did not have the capabilities to do so.

A more complete list of barriers and their relative perceived importance is provided in table 8 of our paper.

 open innovation barriers 2

Q: This is very clear and expected to some extent given the concept and organization of Hackathons. But would you say that similar barriers would be found in other Open Innovation approaches like the outside-in solution sourcing ?

A: I would say yes but one must be careful when extrapolating research results to other situations. This would require a dedicated study based on such innovation cases, this is an interesting and unexplored field for us.

Q: Now I suppose that your next step could be to use your framework to propose a method for shaping OI projects so that barriers are avoided or lowered, “by design” I would say ?

A: Yes we are currently developing such a model. It’s important to understand the barriers and be able to lower some but some other need to be maintained or even strengthened. These barriers are needed for the selection process of the best services. Once the objective of the contest is clear then the barriers need to be adjusted to ensure the proper competition and selection. This is the model we are working on now in a two years project just starting.

Q: Our readers and ourselves are very interested to take this one step further and develop best practices to anticipate barriers in our innovation sourcing model. I’m afraid we won’t be able to wait until the end of your project (…), so let me try an exercise and figure what would be the main points to be anticipated

 

Open Innovation barrier

How it translates for solution sourcing

Example of mitigation guideline

1) Lack of time or money

Bad anticipation of maturation/integration time and cost.

An OI project shall be planned and budgeted upfront similarly to internal projects, including a specific “maturing and transfer” stage. Integration time need to be anticipated, reviewed with the provider, and budget adjusted.

2) Lack of marketing competencies/ information

Lack of interaction between R&D and product marketing.

An OI project shall involve the whole product core team (Marketing, R&D, purchasing, Quality). OI projects conducted exclusively by e.g. R&D  have low chances of success.

3) Weak value offering

Over estimation of the targeted innovation market value. Limited teams capability to build a business model.

The project ROI need to be planned and measured, starting with a core team agreement on the target innovation market value.

4) lack of partner cooperation for development

Wrong fit between the solution provider and the seeking company. Bad project execution.

The R&D readiness to engage in Open Innovation collaborations shall be audited. Information and training conducted. Involve professional project management  and quality monitoring, include terms in supplier contracts.

Table 3: ideXlab own elaboration on barriers anticipation

What would be your expert opinion on this, are we tackling the main dimensions with this check list ?

A: Yes, but again the priorities can only be translated carefully until we have studied specific data on similar cases. We will have results based on our study at Volvo in the near future and will keep you posted !

Q: Anders, thank you very much this was very informative. I am looking forward to reading your next research results and let’s keep in touch may be some of our users will be open to share their experience with you if you are interested.

Read the full article from Anders Hjalmarsson at  http://ecis2014.eu/E-poster/files/0211-file1.pdf

 [subscribe2]

A SUCCESS STORY OF AN OPEN INNOVATION PLATFORM

Open innovation platforms  are a great success when it comes to bringing experts and companies together so that they can innovate. We got the opportunity to interview Justo Puerto Albandoz , a professor of operations research at the university of Seville Spain, who has a research group, Nuevos desafios de la matematica combinatoria,  that worked together with a company X ( information of the company can’t be disclosed ). The two meet through the ideXlab open innovation platform. Here is [tweetherder]the success story of open innovation [/tweetherder]told to us.

1.What is your domain of expertise?

Our domain of expertise is the analysis and design of complex networks. This includes location, optimization of supply chain networks and other relative subjects. These problems involve a series of different fields that lie within applied mathematics. We have some expertise of analyzing different networks like technological networks, some biological networks, information networks and social networks. Our major expertise is in the analysis of technological network essentially distribution networks, routing problems and the likes.

– Why is it important?

The study of networks, in the form of mathematical graph theory, is one of the fundamental pillars of discrete mathematics.  Typical network studies in sociology involve the circulation of questionnaires, asking respondents to detail their interactions with others or in logistics the organization of routes, schedules and timetables of personnel vehicle fleets of jobs in production plants. One can then use the responses to reconstruct a network in which vertices may represent individuals and edges the interactions between them. In the same form, the optimized plans of actions are used in logistics  networks  to increase benefits or reduce costs. Typical social network studies address issues of centrality, connectivity and optimization. Our focus is twofold to consider the design of networks seeking for amenable properties that allow effective optimization of several aspects on those structures and to shift to the consideration of large-scale statistical properties of large scale networks.

 – Where does it apply?

Our expertise and methods can be applied to solve problems of many kinds in different complex structures. Specifically, they are directly applicable to Social networks, Information networks, Technological networks, Biological networks and Logistics networks.

2. Why is it sometimes difficult to get your expertise known and recognized by industry players?

Our role is basically teaching and doing basic research so our communication channels remain around the academia people who are working in the same environment as us. The only way to contact industrial partners is either by chance or by collaboration with partners we previously contacted. Usually we are in contact with companies where former students are working. So the possibility to work with industrial partners is very limited.

 – How did ideXlab help?

IdeXlab put us in contact with an industrial partner that was looking  for a solution for a particular problem that was exactly in our field of expertise. Without this contact it would have been impossible to work with them. We are in the south of Spain in Seville and our partner is a company working in France.

 3. Does the university or the government encourage you to work with the industry or is it your own initiative?

There are no such initiatives. In principle, there should be some incentives for us to work with industries because this produces a return that goes into the universities. But in terms of promotion in the universities, most of the time, it isn’t by industrial contract but by technical publication.  So if you are a scientist that is looking for better positions in the universities then there aren’t real incentives for doing contract with industries. But on the other hand, when you are coordinating a big group of researchers or a group of people who have achieved some degree of seniority, there is some incentive for you to do contracts with industries because you get in touch with actual problems that, in fact, help you in developing new techniques and new research that will go into the technical knowledge in your field.

4. What did your project entail with the company we put you in touch with?

I can only say a few words about this because we have a non-disclosure contract with the company. But I can talk about the field of collaboration. This company asked us to develop a new management tool for the control and design of future metro networks. We developed a tool that was based on an optimization framework that was able to cope with the different types of metro networks and could be used in the future to improve management and control of complete networks.

5.How would you qualify the relationship created with the company now?

We are satisfied with the company and we finished our first collaboration by October 2013. We are now looking for new extension because after the final delivery, we internally thought of the problem in a more theoretical point of view and we have developed an even better solution. So this open innovation experience created some additional appetite on our side and this is the way it should be.

6.  Had you ever heard of open innovation before? If so, explain to us in a few words, your thoughts on it?

Before being in contact with ideXlab, we had no idea what open innovation was. This was the first question I asked Jean-Louis (CEO of ideXlab) because so far the way we were contacted by the industry was completely different. Either someone who knew us would either come to the office or phone us, send us a letter directly from the company. In this occasion the contact was different because we were contacted by an intermediate company that was looking for a solution for another company and this was something we understood after the first meeting with ideXlab but we didn’t have a previous experience with this type of collaboration.

I think open innovation is a great idea. I would recommend it to other people. If there is a company which is an expert in looking for solution for industrial companies then it’s something that could help both sides and this is very important.

 

[subscribe2]

Implementing swifter Open Innovation thanks to the C-K design theory PART 1

The C-K design theory is a theory of reasoning in design, that aims to provide a single yet domain-independent approach to innovators seeking to streamline their innovation workflows.

It builds on classical design theories, then goes beyond problem-solving by stimulating truly innovative design. This is due to the fact that it includes the creative, surprising and serendipitous aspects of design.

According to the C-K design theory, the design situation can be represented by two different spaces : the Concept space (C) and the Knowledge space (K). The Concept space is the space of the unknown, where ideas only exist. A Concept, in the C-K paradigm, is an object characterized by a certain set of properties that the creative designer can’t tell if it exists or not. Actually, it could exist since nobody can prove it is impossible it doesn’t – yet it does. A concept can’t be “decided”, thus is a seed of creativity. For instance, an “anti depressive toothbrush” is a concept : I dare you to show me one, yet we might as well create it together.

On the opposite, the Knowledge space (K) is the space of what is known for sure. It is filled with existing objects, laws of physics, past observations… Every object or assertion in the knowledge space has a logical status, i.e. is true or false. You know that “a toothbrush is used to brush one’s teeth” and “depression is a mental disorder”.

By associating knowledge to the initial concept, we can build on it by specifying it further. For instance, “laughter can help beat depression” is knowledge that I associate to the “anti depressive toothbrush” concept. I can then partition my initial concept between “anti depressive toothbrush that use laughter”… and the others!

Therefore I can’t get fixed on my initial idea of using laughter for my toothbrush, since I had to write down that those not using it could as well be designed. C-K design theory prevents fixation effects therefore boosting creativity.

ck image

If you’re designing a chair, some knowledge could be “most chairs have 4 legs” and you would then partition your initial concept into any-number-of-leg chairs (even a no leg chair !). Those are called “expansive partition” since they break the dominant design of the chair object.

The design process concludes when a concept far down in the concepts tree calls for knowledge creation, and this newly acquired knowledge enables fulfillment of the concept.

What about Open Innovation then ? How does the C-K design theory relate to it ?

In a certain light one could argue that both Concepts and Knowledge can be exposed in most Open Innovation workflow. Seekers carry Concepts: they have ideas, but are unable to make them real. They lack the proper Knowledge to make their concept come true. Seekers reach out to Solvers with a description of this missing Knowledge, hoping to find an expert with the Knowledge that fits their Concept and turns the initial idea into reality.

However this classical implementation of Open Innovation doesn’t take advantage of the C-K design theory to its full : it doesn’t provide a way for the Seeker to reassess it’s initial concept, or for the Solver to build on it expansively. Maybe another road in the implementation of Open Innovation to experiment with ?

 Stay turned for the upcoming part 2!

 

[subscribe2]

WEBINAR VIDEO: THE TOP 8 IMPLICATIONS OF OPEN INNOVATION IN YOUR ORGANISATION

The president and co- founder of ideXlab, an open innovation platform that automates intermediation between experts and enterprises, shares the experiences encountered by companies wanting to implement open innovation since ideXlab is in constant dialogue with them and explains the main dimensions that need to be understood.

“[tweetherder]INNOVATION DISTINGUISHES  BETWEEN LEADERS AND FOLLOWERS[/tweetherder]”

 

Download the whitepaper used in the webinar video:  http://www.idexlab.com/en/whitePaper

[subscribe2]

Open innovation and intellectual property rights : contradiction and complementation*

Open Innovation and Intellectual Property Rights management have long been presented as contradictory conceptions of innovation.

We discuss here the apparent contradiction around Innovation Property but show that IPRs, well managed, allow to conduct the most effective Open Innovation projects.

* Complementation refers to two organisms having muted on different genes but showing the same caracteristics.

Why there is an apparent contradiction in the definitions ?

Between Intellectual property or Innovation Property and Open Innovation the contradiction starts with the definitions. Let’s have a look at what the likes of Wikipedia say.

Intellectual property rights (patents, designs, copyrights) as defined by the WTO are “the rights given to persons over the creations of their minds. They usually give the creator an exclusive right over the use of his/her creation for a certain period of time.”

As one can read, the exclusivity term is of essence here. B.Hall in her study [1] states that: “IPRs are generally designed to exclude others from using a firm’s ideas and inventions”.

Open Innovation on its side defines as follows: “Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market”. Alternatively, it is about “innovating with partners by sharing risk and sharing reward.” [Wikipedia, citing Chesbrough].

Here the emphasis obviously is on “sharing”.

Although sharing doesn’t mean giving away, a major rift still lies between ‘exclusive’ versus ‘sharing’, doesn’t it ?

And the contradiction seems to worsen when one looks at the actual practices in both camps.

The growing economical weight of IPRs

While sharing IPRs happens to be true inside some groups having common economical interests or interoperability constraints (e.g. patent pools on video or telecommunications technologies), the general rule remains that IPRs and particularly patents are considered as weapons for protection or attack in industrial conflicts.

Actually [tweetherder]the role of IPRs has become paramount as we have entered into the knowledge economy[/tweetherder]. In a material economy one can protect his assets in a safe whereas in a knowledge economy the only protections are secrets or IPR titles.

As an exemple of this growth we can mention the amount of patents payment that rose from $50B in 1994 to $200B in 2008 (source WIPO and Athreye/Yang in [8]), this does not account for acquisitions like Motorola Mobility by Google ($12B) and Nokia by Microsoft ($7B) which both aimed at filling up their patents portfolio.

patents promises

The patents promises

We also know from the news some famous war facts such as: Apple suing Samsung and blocking the Galaxy phone sales in the US in 2012. Blogs on the topic flourish of exemple of nonsensical situations in particular related to software or gene patents’ innovation property (see Commodor/XOR patent ).

Invention protection can indeed turn into excessive and questionable practices.

An MIT Sloan article summarizes this nicely and says that [tweetherder]problems happen when “IP is transformed from a means of capturing the value of innovation to an end in itself“[/tweetherder].

When it comes to building new partnerships, this uptight position on IPRs implies strigent rules that put a heavy armor on the shoulders of employees and slows down all projects. Some companies will require an NDA before any discussion can take place, most will want to have a comprehensive contractual agreement before a projet can start and some will simply not talk to others if they don’t own patents.

knight

Let’s discuss a partnership !

Large companies as IBM and P&G however have realized that business agility required a shift in their IP policies and did so in the late 2000s, see [1].

The agility provided by Open Innovation raises new questions

In the Open Innovation camp, stakeholders recommend to use light processes to conduct projects so that information can be shared between innovation seekers and solution providers without unecessary barriers. This is absolutely needed when a company sends a call for ideas in the hope of receiving tens of answers in their selection process. Having NDAs prior to information exchange or keeping innovations secret is not consistent with that plan of course.

Following to these principles, thousands of industrial problems are made public and even more proposals for solutions are shared with the thinest protection of a clic on a web page.

With such a contradiction one can legitimately ask questions.

The seeking company’s main questions usually are:

1.  What will happen to my technical challenge? Can’t competitors use it against me ?
2.  How can I protect my products against copycats if I don’t fully own the IPs ?

The experts or providing company’s questions are:

3.  How can I protect my know-how from being stolen with such a light process ?
4.  Am I weakening my position in the long run by sharing or licencing my IPRs ?

Well, as you can guess, as Open Innovation experts we do have the answers :-) and to thank you for reading up to this point I will now give you an overview.

Open Innovation platforms embed the answers

The first question from the seeking company relates to a potential risk in disclosing an industrial problem including to competition. Indeed no one wants that others know the details of our problems, not only in business.

This one is easy to answer, firstly Open Innovation Platforms allow to post questions and challenges anonymously (exemples here). At ideXlab we have developped a workflow that allows seeking companies and solvers to enter into anonymous discussions and negociations until both parties agree to start a collaboration.

Secondly, one shall ask the question of the actual risk if the challenge question is disclosed. In most cases that we have dealt with, the questions asked were related to the improvement of an existing product (so the product and its performances are already known and a disclosure is not a big risk). Others are related to peripheral features of a product so they aren’t in the core activity of the company therefore limiting the risks.

The answer to the second question is slightly more technical. Let’s assume that you have found a technology that you want to incorporate into your next product,  there are two options: the technology is either protected by the provider or it is not. If it is protected by a patent or even only a proof of anteriority, then, as part of your agreement you will ask for a right to use (licence), potentially exclusive, or you may acquire the patents. Indeed a right to use does not allow you to sue potential copycats, however a good laywer will have added a commitment by the IPR owner to assist you and prosecute companies who will infrige your exclusive licence. If you want the maximum security, the patent acquisition is the right option.

If the technology was not protected by the provider then it is probably too late to do so and your agreement will include an exclusive licence on the know-how and secrecy will be the rule regarding this unique technology addition !

But before putting a complex legal framework in place one shall consider the actual premium paid to the company getting first on the market for this product or feature ? In many cases, being first makes such a difference that the risk of being copied one year after has little to no importance. Of course this factor varies significantly depending on the market and the products lifecycle.

The third question (provider protection) is one asked very often. On Open Innovation Platforms, solution providers have to disclose some level of information to tease the seeking company without taking too much risk of having the ideas stollen.

Again, we have two situations here.. If the invention is protected then it can be disclosed and the rights on it can be promoted. If it is not, then information exchange shall be conducted with caution. Lawyers and OI intermediaries are used to this tightrope walker exercize and can support you. At ideXlab we put the emphasis on describing the external caracteristics of inventions, as the key performances, instead of disclosing to much about the implementation. After some anonymized Q&As, when the seeker is convinced about the seriouness of the proposal, then he can decide to enter into a confidentiality agreement.

The answer to the fourth question is a matter of both conviction and realism. Technology licencing and integration is a natural flow in a global world. Both parties benefit from the exchange, one with a new revenue streams the other with an improved time to market. As a matter of fact, universities laboratories have a mission to licence their inventions and companies’ labs often work with their IP department to find new ways to market. Still, caution shall be paid on the licencee’s position in the market; restricted fields of applications may be specified in the licences to avoid a potential competition in the inventor own business area.

[tweetherder]IPRs and Open Innovation can become the 2 sides of the same coin[/tweetherder]

Open Innovation and Intellectual Property coincide particularly well when[tweetherder] companies  realize that they shall capitalize on opportunities rather than only on properties[/tweetherder].

And if contradictions exists they are rather in companies’ mindsets than between the actual concepts.

Finally, the exact answers to the parties’ concerns depend on: the nature of the Open Innovation project, the situation of the seeking company on IPRs, the nature of the end product and market, and on the technology provider’s situation.

So the seeking company shall ask itself the following questions first:

 – Am I looking for a product core technology, improvements or peripheral functions ?
– What is the added value of the  technology for my product and business ?
– Can the provider compete with me on my market at some point ?
 – Is time to market more important than long term protection for this product ?

Depending on the answers to these questions there is an Intellectual Property framework that will help put all pieces together, as depicted below.

IPR options

Exemple of one company IPR options (source ideXlab)

This article is one in our series related to the Open Innovation Practice, we hope you enjoyed it.

References

[1] Open Innovation and Intellectual Property Rights – The Two-edged Sword
http://eml.berkeley.edu/~bhhall/papers/BHH09_IPR_openinnovation.pdf

[2] Does IP Strategy Have to Cripple Open Innovation? http://sloanreview.mit.edu/article/does-ip-strategy-have-to-cripple-open-innovation/

[3] Scenarios for the Future http://www.marcasepatentes.pt/files/collections/pt_PT/1/178/EPO%20Scenarios%20For%20The%20Future.pdf

[4] How intellectual property enables and protects Open Innovation http://www.forbes.com/sites/benkerschberg/2012/04/23/how-intellectual-property-ip-enables-and-protects-open-innovation-platforms/

[5] A practical guide to managing intellectual property rights in an open innovation context http://six6.region-stuttgart.de/sixcms/media.php/1181/Opinet_IPR_Guide.pdf

[6] XOR patent case https://www.google.fr/search?q=CadTrack+xor+patent

[7] Athreye and Yang 2011, Desambodied knowledge flow in the world economy  http://www.wipo.int/export/sites/www/econ_stat/en/economics/pdf/wp3.pdf