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EXECUTIVE WHITE PAPER
An innovative culture is
key to outperforming your
competitors. Having the
appropriate mindset and
behaviors engrained in the
organization is especially
essential for companies
pursuing open innovation.
This white paper describes
how an innovative culture
operates and provides
advice on how to move
toward creating such a
culture in your company.
Yet all is not well on this front in far too many global companies. Each
year, the global consulting firm Booz & Company does a survey of R&D
spending at 1,000 public companies from around the world. Along
with tracking spending trends, their annual report, Global Innovation
1,000, provides insights into what makes companies truly innovative. In
their 2011 report, they tackled the importance of an innovative culture.
After defining the elements of an innovative company as a focused
innovation strategy, a winning overall business strategy, deep customer
insights, great talent, and the right set of capabilities to achieve successful
execution, they go on to say that more important than any of the individual elements, however, is the role played by corporate culture the
organizations self-sustaining patterns of behaving, feeling, thinking, and
believing in tying them together.1 Yet, strikingly, only about half of all
companies surveyed said their corporate culture robustly supports their
innovation strategy.
Wherein lies the disconnect? Everyone agrees that having a corporate
culture that supports innovation is imperative. Business leaders talk
about it all the time; in fact, theyve been talking in this vein for at least
three decades, if not more. Yet as the Booz & Company study reveals,
Assess the opportunities, needs, and benefits of introducing new practices of open innovation across LEGO
Define what next practice would look like while building on internal
practice as well as insight from the best open innovation practitioners in
the world
Make a firm and evidence-based recommendation on what and where
the value could be, how this could be delivered, and what would be
needed to achieve this
Set out a viable roadmap based on how to move forward, balancing
risk and rewards, etc.
As Hansen set out to learn more about open innovation, he focused on three
elements:
Learning from others by conducting a dozen interviews with leading
open innovation companies
Learning from LEGO through collecting input from over thirty
practitioners
Learning by doing by setting up four micro pilots to test capabilities,
culture, and appetite
This helped Hansen express the goals for the open innovation program at
LEGO this way:
GOING FROM
TOWARD
Succeeding together
A culture of openness
A helpful framework for thinking about how to generate commitment from all levels is called the TBX model. In this model, T stands
for top down. It is all about the need to get executives on board
and require their personal commitment to the innovation activities.
Without executive support, no change occurs.
The B in TBX stands for bottom up. Value creation begins with
people one by one, team by team. Nothing happens unless
employees are engaged, involved, and trusting that their voices
are heard by those higher in the organization. If ideas just seem to
fall into a sinkhole, never to re-emerge, or if leaders are not able
to commit resources to any ideas, trust of the employees will most
certainly erode.
Focus on a single business unit, at least initially. Large multinational companies most likely have pockets of the right
innovation culture. Try to identify these pockets and then secure
full commitment from the leadership and work together to
develop and launch strong initiatives. If this works well, then build
out further throughout the company with similar initiatives.
Educate upwards. It is the responsibility of corporate innovation
teams to educate their executives. Yet many teams miss out on
this or they do not really know how to do it. The challenge is to
find the ways that work in a given situation. Executives may want
to learn, at which point establishing a training program would be
appropriate. If they do not seem interested, then finding the
unique triggers is important. This often involves identifying ways
in which the executives can benefit personally from a stronger
innovation culture.
Your open innovation group, above all else, is a resource for your business teams. Youre not there to launch your own new products, but to
engage and support the various leaders in your business and get them
committed to tapping open innovation as one way to meet their
business needs.
Certain groups and certain leaders will be more enthusiastic about open
innovation than others, and that is okay. Help the people who want your
help, and do not waste time worrying about those who do not.
Appreciate and Communicate Early Wins. When you have an early
success, shout it from the rooftops to help build your case for open
innovation. One of the first wins for open innovation at General Mills was
a natural fruit bar that we brought in from a partner in Canada. At that
point, we had customers who were looking for more innovation in the
fruit category, a very willing business partner, and a marketing manager
who really wanted to demonstrate how nimble General Mills could be.
We ended up launching the Nature Valley fruit bar from that effort. It
only took about six months from the time we agreed on our approach to
the time of launch. For us to develop the product from scratch internally
could have required millions of dollars and potentially two years. Even
though the product is no longer on the market, we have continued to
build the relationship with that partner, and they have been an ongoing
source of new-product innovation for General Mills.
The more your employees, vendors, partners, potential partners, competitors and so on learn about the initial success of your open innovation
strategy, the better your chances for sustained success.
Conclusion
The pursuit of competitive unpredictability is an organization-wide, never-ending journey that requires smart leadership, clear strategies, constant focus, and a willingness to embrace change. Above all, it requires
a culture that supports innovation that in the future will be more open
and externally-focused than ever before. No matter the industry or sector, competitors are either already or soon will be pursuing innovation
partnerships and initiatives with all sorts of external innovation sources,
including intermediaries, academics, entrepreneurs, and domain experts
from around the world.
Keep this external perspective top of mind to improve culture within
your organization. Failure to do so will most likely require a start-over in
a couple of years, and in the meantime, competitors will have gotten a
big jump. So, why not prepare your innovation structure and culture for
the future today? This is not something that can be achieved overnight,
so the journey should start now.
Endnotes
1. Barry Jaruzelski, John Loehr, and Richard Holman, The Global Innovation 1000:
Why Culture Is Key, http://www.booz.com/media/file/BoozCo-Global-Innovation1000-2011-Culture-Key.pdf, p. 2.
Common Language
Companies need to develop a common
language on innovation so their employees
and external partners can better
understand and frame the issues related
to innovation.
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