NESTA Connect

8 simple ways NOT to succeed at open innovation

Roland Harwood — 2009-11-04T15:16:56+00:00

1. Forget to communicate with the outside world - It sounds almost too obvious, but alas it isn't. I've seen many a large organisation get so wrapped up in their open innovation process to the extent that they completely forget to tell anybody external about it thereby rendering the entire endeavour pointless. Don't forget to talk to people about what you are doing or are looking for, through as many communications channels as possible.

2. Banish your critics - Your critics can be your most valuable collaborators. I've seen one large company act totally out of all proportion when their PR department discovered a single negative blog post (with negligible readership) about their open innovation initiative. They wanted to exclude said blogger from the process, which would have almost certainly led to more negative coverage. In the end we persuaded them to engage in a conversation which was challenging but ultimately hugely beneficial.

3. Focus on 'what?' not 'who?' - There is a sequence of activities that occur in open innovation that cannot be bypassed. Namely you start with lots of conversations, some of which will lead to a smaller number of some kind of relationships. Importantly trust needs to be earned and takes time to develop. Eventually, some transactions will follow that create value. So when starting with open innovation, as well as asking 'what is the idea/technology/opportunity?' it is crucial to also ask the question 'who are the potential collaborators and how can we get to know them better?'.

4. Misunderstand the difference between hierarchies and informal networks - Hierarchies work primarily through 'command and control' whereas informal networks work through 'trust'. Both are crucial but mixing the two can be fatal. Don't do it. All complex innovation challenges now involve hierarchies - which are multiple hierarchies interwoven with multiple informal networks - and we need to understand them both. According to social network guru Karen Stephenson, at any point in time, informal networks trump hierarchy, however over time hierarchies trump informal networks. In other words informal networks have power but hierarchies preserve longevity.

5. Fail to suspend judgement - According to psychologist Stuart Sutherland, the inability to suspend judgement is one of the most prevalent aspects of irrational. And yet suspending judgement and being open to new ideas and opinions is also a vital component that allows unconventional and innovative ideas to develop and grow. Most of us like to think of our selves as rational beings and yet why can so few of us suspend judgement. Try it...you never know what might happen?

6. Mange risk down to zero - Open innovation is not about selling certainty, it's all about managed uncertainty. Open innovation is all about shared reward and without stepping outside of your comfort-zone it will be very difficult to drive the process forward. Procter and Gamble estimate that only one in a hundred good ideas make it to market whether they come from within or outside, but external ideas will often have greater potential. Of course you should manage your risk but be very careful not to overdo it.

7. Death by analysis paralysis - The single biggest thing that squashes most innovation is a lack of momentum which kills all hope of any getting an innovation getting to market. All too often this happens for valid reasons like seeking consensus around multiple departments. It can be really helpful to have a clear and quick process agreed up front, and preferably published to the outside world so there is little chance you can renege on that commitment, whilst recognising the need to be flexible if necessary too.

8. Overestimate your own brilliance - As Bill Joy of Sun Microsystems so eloquently once said 'Not all the smart people work for you'. We estimate that 99% of the solutions to all of your innovation problems are already out there somewhere. And yet most organisations focus 99% of their innovation efforts on inventing new stuff. We would argue that to be successful at open innovation make sure you network as hard within the organisation as outside. So go and find the smart people and listen to what they have to say as ccombining different perspectives is key any innovation.

(Fr)Agile Organisations

Roland Harwood — 2009-10-29T12:05:24+00:00

There is no particular theme to this post other than the ever present wonder at the pace of change and how we really need to re-invent organisations to enable them to become massively more agile. Anyway, this was prompted by a great chat with the ferociously smart Jon Watts of MTM this morning who recounted 2 stories as follow.

Welcome to Manchester

Firstly - and it pains me to recount this as a Man Utd fan (sorry - but I grew there honest!) - do you remember the recent advertising campaign when Carlos Tevez moved from Man Utd to Man City?

Apparently, it was just one billboard in the city centre for one week! It cost peanuts and yet it got huge amounts of media attention and Jon tells me somebody estimated it was in the region of £30m media value primarily through viral means and of course by the mainstream press picking up on it too. I know advertising business models are undergoing massive change but this really brings it home.

Black-swan proofing

I read Taleb's Black Swan last year but missed a follow up article in the FT in April called 10 principals for a Black Swan-proof world. Most of the 10 refer directly to the financial crisis but three jump out at me as relevant whatever field you are in.

What is fragile should break early while it is still small. Nothing should ever become too big to fail. Evolution in economic life helps those with the maximum amount of hidden risks – and hence the most fragile – become the biggest.
Counter-balance complexity with simplicity. Complexity from globalisation and highly networked economic life needs to be countered by simplicity in financial products. The complex economy is already a form of leverage: the leverage of efficiency. Such systems survive thanks to slack and redundancy; adding debt produces wild and dangerous gyrations and leaves no room for error. Capitalism cannot avoid fads and bubbles: equity bubbles (as in 2000) have proved to be mild; debt bubbles are vicious.
Make an omelette with the broken eggs. Finally, this crisis cannot be fixed with makeshift repairs, no more than a boat with a rotten hull can be fixed with ad-hoc patches. We need to rebuild the hull with new (stronger) materials; we will have to remake the system before it does so itself. Let us move voluntarily into Capitalism 2.0 by helping what needs to be broken break on its own, converting debt into equity, marginalising the economics and business school establishments, shutting down the “Nobel” in economics, banning leveraged buyouts, putting bankers where they belong, clawing back the bonuses of those who got us here, and teaching people to navigate a world with fewer certainties.

(Fr)Agile Organisations

Wise words indeed. We talk a lot about agile or innovative organisations but no amount of tweaks to the existing approach is going to be able to respond the change we are facing. The banks and the media might be feeling the pains now but I can't really see a hiding place for any sector or industry. It requires nothing less than a reimagining and recreating of what we think of as organiations in an ever increasingly networked world. I for one am in awe of the challenge but hugely excited by the opportunity.

Labour Party Conference 06-0-10-09 [Flickr]

NESTA: Making Innovation Flourish — 2009-10-07T02:16:05-07:00

NESTA: Making Innovation Flourish posted a photo: