cesar castro open innovation presentation

Open Innovation and the Future of Organizations

Cesar Castro

cesar@discoverycast.com

Founder and CEO

DiscoveryCast, Inc. ©Copyright2010DiscoveryCast,Inc.allrightsreserved

Topics

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1‐OpenInnova,onStrategies

2‐PreparingforTheNewInnova,on

Paradigm

3‐Innova,oninanIncreasinglyCollabora,veEnvironment

4‐ManagingConfiden,ality/IP

5‐GeIngStarted:DevelopingAn

Innova,onStrategy

6‐Examples/CaseStudies

8‐Brainstorming/Idea,on

Topics

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1980’s

1990’s

2000’s

Today

My Background

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Innovation is…….

(to be filled in later)

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Open Innovation is……

(to be filled in later)

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IBM CEO Survey - March 2006

What Has Changed In The Innovation Landscape?

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Innovation Is Everywhere

Seeingtheunseenor,“…theeurekamoment…”

Op,mizingthevaluecrea,onopportunity

Scien,ficDiscovery TechnologicalInnova,on

NewMarketInsight Market/RetailInnova,on

NewProduc,on/ProcessInsight SupplyChainInnova,on

NewBusiness/FinancialInsight BusinessModelInnova,on

NewHRPolicies HumanCapitalManagementInnova,on

NewSocial/EcologicalInsight SocialInnova,on

Regulatory/Legisla,veChange Business/Marke,ngInnova,on

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Closed Innovation

Model

Open Innovation

Model

Market Revenue

Market Revenue plus New Revenue

What is Open Innovation?

(traditional definition)

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Large firms/ social networks

Academia/SME’s

Individuals/consultants

individual firm

innova6ongroup

INTERNAL INNOVATION

customerscompe6tors

suppliers

re6rees

New Explanation of Open Innovation

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individual firm

innova6ongroup

customerscompe6tors

suppliers

re6reesLarge firms/

social networks

Academia/SME’s

Individuals/consultants

OpenInnova*onBeginsInternally,ThenGoesExternal

INTERNAL INNOVATION AND EXTERNAL INNOVATION

New Explanation of Open Innovation

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Companieshave…..

 loweredtheircostofinnovaAon

 broughtnewideastooldproblems

 generatednewrevenuestreams

 acceleratedtherateofinnovaAon

Why Is Open Innovation Important?

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Open Innovation Strategies

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Open Innovation Requires A Portfolio Approach

Internal External

Indirect Direct

Social

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Characteristics of An Open Innovation Approach

Distributed

Rapid Prototyping of Ideas

Shared Financial

Risk

Anyone Can Contribute

Share and Co-create IP

Diversity

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How To Prepare For The New Innovation Paradigm

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Principles Of The New Innovation Model

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Develop More Transparency

Engage with networks

Embrace community

Competitors can be collaborators

Discourage the “Not Invented Here” syndrome

Engage with failure

Maintain a “memory” bank of successes/failures

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FailCon

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Key Skills For Individuals

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Learn to frame the question properly

Think of yourself as a solution finder

Learn to collaborate and share

Stay informed with filtered information

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Key Skills For Companies

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Prioritize and incentivize innovation

Move to a higher risk profile

Adapt the company structure

Reinvent company culture

Promote experimentation and weather change

Innovation in an Increasingly Collaborative Environment

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Engagement in social networks

Source: Forrester Research

The Engagement

Ladder

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Managing Confidentiality / Intellectual Property

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Confidentiality/Intellectual Property

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RULE#1

Noteverychallenge/technologyneedissuitableforexternalinnovaAon

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Confidentiality/Intellectual Property

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 LookforopportuniAestosharenon‐confidenAalinformaAonfirst

 FramingthequesAoncanalsohelpmanageconfidenAality

 Risk‐takingneedstobehigher

 80/20rule(80%ofofcorporateIPisnotuAlized)

 IPownershipisshiWing;smallbusinessesareaccounAngformoreandmoreoftheinnovaAonpie(patents,technology,etc)

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Getting Started

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Getting Started

The innovation dial

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Creative Bazaar Jam Session

Orchestra MOD Station

INN

OVA

TIO

N T

YPE

NETWORK LEADER central diffuse

emer

gent

de

fined

Source: The Global Brain, 2008

4 Strategies to Leverage External Networks

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MIT Open CourseWare ✖

Nokia ✖

Kraft Innovation Portal ✖

My Starbucks Idea ✖

Clorox ✖

Intuit ✖

Dell Ideastorm ✖

Unilever ✖

Android OS ✖

Conclusion

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Innovation is…….

A process by which new ideas fuel developments in products or services that

capture value in the marketplace.

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Open Innovation is…….

A mindset, not a type or category of innovation

A means of production for innovation

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Key Takeaways

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 OpenInnovaAonisallaboutculturechange

 PorZolioapproachisimportant

 SocialnetworksarepartofinnovaAon

 FramingthequesAonisacriAcalskill

 ConfidenAality/IntellectualPropertyCANbemanaged

 Diversityofthenetworkisimportant

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Bibliography

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TheOpenInnova6onRevolu6on,StefanLindegaard,Wiley,2010.

TheGlobalBrain,SaAshNambisanandMohanbirSawhney,WhartonSchoolPublishing,2008.

OpenBusinessModels,HenryChesbrough,HarvardBus.SchoolPress,2006.

Crowdsourcing,JeffHowe,RandomHouse,2008.

OpenInnova6on:TheNewImpera6veforCrea6ngandProfi6ngfromTechnology,HenryChesbrough,HBSPress,2003.

©Copyright2010DiscoveryCast,Inc.allrightsreserved

Open Innovation and the Future of Organizations

Cesar Castro

cesar@discoverycast.com

Founder and CEO

DiscoveryCast, Inc. ©Copyright2010DiscoveryCast,Inc.allrightsreserved