The number of units declined steadily during the last decade and it continues to do so in the aftermath of the financial crisis. One company that I have always admired is Danfoss Ventures, which is the corporate venture arm of Danfoss, a group with 26,000 employees working with refrigeration, air conditioning, compressors and more.

Unfortunately, Danfoss Ventures – my role model on corporate venture – is now dead. According to Executive Vice President at Danfoss, Nis Storgaard, this is about prioritizing resources where they make most impact.

“The past few years’ development has sharpened our understanding of how important innovation is – but also of how important it is to prioritize investments where they make most difference. And for us this is in our core businesses that have the knowledge of customers and markets as well as the required competences to turn innovative ideas into good business,” Nis Storgaard says.

I have heard similar explanations over the years and this makes sense. Or does it? It definitely raises some questions.

History has shown us that companies will only continue to grow and prosper in the long run if they are capable of morphing into new business areas. This does not have to be totally new business areas or industries. Core adjacencies could work if the borders are pushed continually.

A key benefit of a corporate venture unit is that it can create a safe heaven for smaller, entrepreneurial projects that otherwise would be killed by the larger group and it’s bureaucracy. In theory, a corporate venture unit should be a perfect model to make this happen and thus help companies morph into new business areas.

I have been a strong believer in the corporate venture model. Now, I have second thoughts. So many companies have tried to make this work and if not even Danfoss can succeed then something is wrong with the model.

The big question is what companies should do now. My take is that we will see hybrid models that incorporate the best of the corporate venture model while still having a strong focus on the core businesses. This has not really worked that well in the past, but now we can add a new element to this mix. That is open innovation.

Open innovation not only brings in more diversity and speed by combining internal and external resources. Open innovation also challenges the organization to change in order to deal with the complexity that comes from working with external partners. This will bring a more holistic approach to innovation. We will deal with many different kinds of innovation and we will involve more business functions than what we see today.

Open innovation and the diversity this brings can help companies morph into new business areas – as long as they can figure out how to turn odd-looking ideas into revenues and profits.

I am still trying to figure out why Danish companies do not embrace open innovation more actively. I might also be wrong as some companies challenge me on this by saying that they do quite well with open innovation. They just do not talk that much about it.

Hold on! How can you really believe in open innovation and then more or less deliberately keep a low profile with your efforts? A key objective is to become the preferred partner of choice within your industry and ecosystems. This does not happen by staying quiet. Open innovation requires visibility and communication – internally as well as externally.

One came from Jeff Boehm, who is the chief marketing officer at Invention Machine. That company has other great thinkers than Jeff as you can experience by visiting the blog of their CTO, James Todhunter.

Jeff Boehm shared the below key messages.

• Successful open innovation requires a strong internal innovation framework

• Processes, information and communities should be integrated as three key ingredients for innovation

• Innovation success requires internal communications

I especially liked his focus on the last point and his suggested process on how to do this. It has 4 steps that go like this:

• Positioning – make it relevant & show success

• Promotion – make it obvious

• Calls to action – make it easy

• Sustain momentum – make it stick

Jeff Boehm wants to share his ideas with others and thus I am pleased to be able to provide you with his presentation for further information and inspiration.

Marketing Innovation by Jeff Boehm

I trust you will enjoy this. Thanks, Jeff…

Topic: Top executives and their view on open innovation

What do top executives actually think of open innovation? How do they approach open innovation? What do they see as the biggest challenges? What advice would a top executive give to innovation directors in charge of implementing open innovation?

I really look forward to hearing the perspectives on these and other questions from three top executives from Psion, the maker of mobile computer products and technologies.

The executives are John Conoley (CEO), Mike Doyle (CTO) and Nick Eades (CMO). Check out the Psion executive team here.

John, Mike and Nick and their colleagues have initiated a corporate open innovation initiative named Open Source Mobility, which includes their Ingenuity Working community. They look forward to sharing their experiences and insights in our Twitter Chat on Thursday at 9am (New York time).

We look forward to tweeting with you. If you cannot make it, then look out for a blog post in which I extract the key lessons from our twitter chat.

What is a Twitter Chat?

A twitter chat is simply a fast paced discussion based on a stream of tweets that are linked together as we use a hashtag – int this case #Psion in all tweets.

An example: “#Psion Let’s get started with the first question to the three Psion executives who will share their experiences and insights on open innovation”

You need a Twitter account to participate and I strongly suggest that you also install a desktop application such as TweetDeck. This allows you to create a column using the search tag #Psion in order to get a full overview of all tweets with the #Psion hashtag.

You should also make sure that your privacy button in Settings on Twitter is off.

His questions went like this:

——
I recently came across inno-360.  Do you think more companies are going to be trying, like PG and GM, to use such companies to bring their own OI ecosystems in-house?  Does this represent a threat to InnoCentive, NineSigma, and other partners?  Or is it just an additive thing, i.e., one more tool for them to use?
——

For your information, inno-360 is a software company that helps companies built their own platforms for working with external collaborators.

This was my reply to Philip:

——
Hi Philip,
I definitely believe that larger companies will develop their own internal systems to handle the many issues related to open innovation (projects, relationships, IPR and more).

I do not think this will hurt NineSigma and InnoCentive that much. They offer consulting-like services that the big companies will still need and they also offer access to external sources that corporations do not have and will have some difficulties building themselves.

The more focus we get on open innovation, the more the leading service providers will benefit.

Stefan
——

What do you think? Are large companies moving towards building their own internal services using the software and services of providers such as inno-360 and Chaordix on the expense of intermediaries? A combination? Or perhaps something completely different than what is visible today?

I look forward to hearing your thoughts.

This article from AdAge explains that the idea is to transition from a price-driven, model-specific strategy to communicate with consumers around a broader idea that Nissan cars come equipped with a range of innovative offerings, from keyless entry to air purifiers and smartphone apps, at an affordable price.

The article features an interview with Jon Brancheau, the guy in charge of the campaign. He states that “…the Leaf is the most recent example to believe that Nissan is an innovative company and that’s how we want to transmit our message to consumers, we want to turn it around a little bit — Nissan is the brand, and here’s the reason you should believe in it.”

Perhaps Nissan will be able to make consumers believe that Nissan is an innovative company, but they will have a harder sell with the global innovation community.

When you launch a campaign like this, I think it is fair to ask questions on what Nissan actually do on innovation and whether they have the corporate innovation capabilities to back up this campaign.

I did a quick check and I was surprised in a very negative way. I found close to nothing of interest on their corporate innovation capabilities. One example is Nissan’s global site where I searched for innovation. You get no real indication on how Nissan views and approaches innovation and you get no guidance on what to do if you want to collaborate with Nissan. It even got a bit funny as the third link they showed was a 12 years old press release : – )

I do not believe that Nissan has realized that the way companies innovate is changing dramatically in these years. One important change is that leading innovators understand that they have to tap into external resources in order to deliver the best possible products and services.

This does not seem to be the case at Nissan so based on what I could find, I just do not believe Nissan will be able to deliver in the long term. Sooner or later their current campaign will backfire.

Overall, this is a great example on what can happen when smart advertising guys get involved with innovation. Innovation has to be about more than just flashy words. It needs to have substance.

Nissan, please show us your substance…

This creates what we can call touch points – situations in which a person or company interact with their current and/or future stakeholders.

Here are a few touch point examples:

• GE has an app for their Ecomagination challenge, which gives them an additional touch point that interacts nicely with their website for the challenge.

• Chris Thoen @cthoen is an active twitter on P&G’s open innovation efforts and others things related to innovation. This can help Thoen and P&G build an innovation leadership position as the innovation community appreciates efforts to distribute knowledge and insights.

However, Twitter is just one touch point in order to reach such a position. Other touch points could include a blog or a LinkedIn group focused on P&G’s corporate innovation capabilities.

• Whirlpool recently launched such a group on LinkedIn.

• Through their Intuit Collaboratory website, Intuit – among other things – announces events in which they interact physically which startups. At their latest event in August, we saw lots of tweets and although they did not deliver much learning, it was still nice to see how they have begun using Twitter.

• Psion experiments with Twitter Chats in which they share insights on their open innovation efforts.

Psion’s next chat brings in three of their executives who will share their views and approaches on open innovation. It happens on September 2^nd at 9am EST. As 15inno helps them on this, we are using #15inno to track the tweets.

I like how companies have begun to incorporate social media tools in their open innovation efforts and look forward to sharing their lots of challenges and successes as they do this.

It would be great to get the community involved in this and some starting questions to you could be:

• What social media tools are companies using? What works? What does not work? Why?

• What are the key elements a company should consider before they embrace social media tools?

• What can a company gain by embracing social media tools in their open innovation efforts?

Can you add other questions? Can you share some examples that address the questions?

I look forward to hearing from you.

Welcome Failure by Paul Sloane http://bit.ly/bPy6Zd

Consulting companies use social media tools to develop thought leadership positions by Bloom Group http://bit.ly/awnXDf

Lessons from Google Wave and MSFT Kin by Scott Berkun http://bit.ly/dtAxZZ

Beware the Open Innovation Backlash by Roland Harwood http://bit.ly/aiJ6q5

Are You Squandering Your Intelligent Failures? by Rita McGrath http://bit.ly/aOiSnQ

Innovate, Yes, but Make It Practical by Steve Lohr http://nyti.ms/bLH2U9

Open vs. Closed Innovation: How Much Evil Is Just Right? by David Rogers http://bit.ly/cstQCd

Five Warning Signs Your Innovation Efforts Are Going Off the Rails by VJ Govindarajan http://bit.ly/9mPe3S

Unilever, Cisco, Whirlpool: Communication in Open Innovation by Andrea Meyer http://bit.ly/aR1MvV

Innovating When You Don’t Know What You Don’t Know: The View from PARC by Mark Bernstein http://bit.ly/95lwGO

Innovation for Now and for the Future by Tim Kastelle http://bit.ly/cj6xre

Everything Has a Personality by Stephen Shapiro http://bit.ly/dqDiAq

Are You Shifting Into High Gear with Social Media? by Holly Green http://bit.ly/9HzECJ

Prepare Your Innovation Elevator Pitch by James Todhunter http://bit.ly/bT6ghr – preparation and planning matters

Top 10 Ways to Drive Traffic to Your Blog Using LinkedIn by Darren Rowse http://bit.ly/c2vgIq

When Failure Is Intolerable by Scott Anthony http://bit.ly/cJjVgO

Co-creation, open innovation key for brands by WARC http://bit.ly/b8EQ2Q

How Much of a Relationship Do Customers Actually Want? by Hutch Carpenter http://bit.ly/9uEwiF

Open Innovation Done Right – a series of videos by Monitor Group http://bit.ly/9GClHg

Creating a cross-functional perspective is a key objective for the new innovation unit that faces several obstacles including:

• a lack of true innovation understanding from the executives

• strong focus on internal capabilities which hinders external contributions

• a lack of internal knowledge on how to set-up such a unit

In this case, I would like to focus on the latter obstacle thus giving us some key questions to ponder:

How can the project team in charge of establishing this new unit acquire the insights, knowledge and skills needed to make this happen?

How can the project team spread this insight and knowledge across the company once a knowledge base and a learning process for the project team itself has been established?

How do you convince executives in a R&D focused company that innovation should be about more than just products and technology?

The ambitions are high as the project team aims to create a world-class innovation unit in just three years time. How can we help them?

1. Communication

At the recent Open Innovation Summit, communication in a more holistic perspective was a key topic.

Jeff Boehm of InventionMachine gave a great presentation titled Marketing Innovation in which he argued that innovation success requires internal communication. He’s right and I will share more from this presentation in a later blog post.

At a Think Tank session during the summit, we also identified communication as a key characteristic for open innovation leaders. Some keywords on this were internal & external communication, consistent behavior & messages, deliberate strategy, top-down modeling, confidence to share what you know.

You should check out this post by Andrea Meyer: Unilever, Cisco, Whirlpool: Communication in Open Innovation

2. Smartfailing – learning through failure

We usually learn from our successes, but we often miss out on learning through our failures.

Thus, I am glad to notice how the idea of getting better at learning through our failures is picking up interest. This became quite clear to me as I got responses to this blog post: Smartfailing – a concept for learning through failure. We have a great discussion going on – please join us…

I talk with several innovation units on their smartfailing and failsourcing capabilities. It will be interesting to see how this develops in the near future.

3. The soft skills of innovation

Soft skills a.k.a. people skills are becoming the hard skills of innovation. It was great to see how Gail Martino, Unilever – and others – got into this important topic at the Open Innovation Summit.

Martino revealed 7 key soft skills that Unilever feel are necessary for open innovation team members to have in order to succeed. They are intrapreneurial skills, talent relationship building, strategic influencing, quick study, tolerance of uncertainty, balanced optimism and passion.

These or similar skills pop up more often when companies explain the key elements behind their open innovation strategies. Matthew Heim, president of NineSigma, also highlights this as one of the key take aways from my latest book as you can read in this blog post, The Soft Side of the Open Innovation Revolution.

Let me know what you think of this and please feel free to share your own innovation trends and issues.