Simon's Blog (the personal one)

Why I believe in Open Innovation

Another week goes by and I've been asked at least twice about Open Innovation. Enquiries fall into two categories. Some are from people who are really interested in the process and others are very challenging. Here is an anonymised example of the latter:

Simon
I understand your objective here, but not why you are once again telling your competitors what we are up to on an open information exchange?
What other business develops new products in such an open way? When General Motors are developing a new car, employees are sworn to secrecy in case Ford find out and get to the market first.
A N Other

Receiving this email was like turning up for an exam to find that the exam paper contained all the questions you'd revised for.

Here are some of the points I made in my response:

The judgement you make when deciding to develop an idea, proposal or project in the open is that you will gain far more than you might lose because:

• exposing your ideas, proposals etc enables others to challenge them and improve them which leads to improved ideas and proposals
• it further enhances your reputation as a truly open and collaborative organisation/person
• it raises awareness of the fact that you are about to do something. So it's a form of pre-marketing

In addition, the 'value' of what you do is not in the 'ideas' (I have 3 of these everyday before breakfast!) it's in their realisation.

This is an interesting quote:

"Share your rough notes, meeting minutes and preliminary results as soon as you can. Sure, there's always the risk that someone else might come along and nick your ideas but, unless you're publishing plans for a nuclear reprocessing plant, it's a lot more likely some helpful soul will pitch in with a helpful comment, pass you a link or contact, or tell you you've got it just plain wrong before you spend too much time and effort on the idea."
Source: Robin Hamman (Senior Broadcast Journalist/Producer at the BBC)

General Motors may keep their ideas to themselves and so did Lego. Lego don't any longer. The story goes that a few years ago Lego released a long awaited product that enabled their users to build computer-controlled robotic models. This product took them years to develop in-house and in secret and then bring to the market. Within weeks of the release, the product had been completely reverse engineered by their user community and brought back together in the form of a highly superior product. Lego now do things more openly and have a mechanism for involving (and rewarding) users in all new product development. See this recent presentation by Prof Eric von Hippel, MIT at the launch of NESTA Connect.  (You need to be patient - this video takes a while to start - if the video is too slow you can click the audio tab and just listen to that). Thanks to David Wilcox for bringing this to my attention.

Wikipedia has a good definition of open innovation in the private sector. Someone needs to do one for the not-for-profit sector . . . . may be we could do it between us here . . . A NFP definition would not talk about patents but of Creative Commons Licensing but there are many parallels.

The Wikipedia definition makes the point that Open innovation needs a different mindset and company culture to traditional or closed innovation. It also includes the following table which I think is really enlightening. Again a NFP version of this would be useful.

Closed innovation Principles	Open innovation Principles
The smart people in our field work for us.	Not all the smart people work for us. We need to work with smart people inside and outside our company.
To profit from R&D, we must discover it, develop it and ship it ourselves.	External R&D can create significant value; internal R&D is needed to claim some portion of that value.
If we discover it ourselves, we will get it to market first.	We don't have to originate the research to profit from it.
The company that gets an innovation to market first will win.	Building a better business model is better than getting to market first.
If we create the most and the best ideas in the industry, we will win.	If we make the best use of internal and external ideas, we will win.
We should control our innovation process, so that our competitors don't profit from our ideas.	We should profit from others' use of our innovation project, and we should buy others' IP whenever it advances our own business model.

PS: The image at the top of this post is of the front cover of the proposal to run the Innovation Exchange that we developed in the open here. Click on the image to enlarge it and count the number of authors!

PPS: We are using the same open process to co-design the next version of our ruralnet|online service here. Please feel free to join in or just browse.

Delivering the bid ... not just online

Click here to play the video.

This is how David Wilcox reported the moment.

After all the virtual working of the past few weeks it seemed essential that we did more than just wing a pdf to John Craig and colleagues at the Cabinet Office. Time for hard copy - so Simon took the train and bike down from Warwickshire, Dan brought the camera, and we all met up outside the Office of the Third Sector for a proper delivery of the package. I asked Simon if he felt the effort had been worthwhile, and whether the open process had brought something extra to the proposal. Of course, he had to say yes ... but I know from conversations we've had, as well as his reply here, that it is a heartfelt yeeeah!!! As you'll hear in the interview, we got lots of new ideas and relationships, and it isn't over yet. By the way, if others who put in a bid want to go naked at this late stage, we would be happy to host their proposals on the site. Maybe open a poll ..... You can get carried away with this openness. Meanwhile, you can find what's in the package here, with encouragement to continue to contribute.

Open Innovation Exchange Submitted

Here’s the proof. The bid on its way from bike to bid reception. I bumped into John Craig in reception which was nice. I am sure it was a coincidence or maybe it was because we were causing a bit of concern setting up to film outside! But it felt good anyway.

He was friendly and, reading between the lines, I think he’s been really interested in the approach we’ve taken. They are expecting ‘a number’ of bids and I got the impression that it was number about halfway-ish between 15 and 25. So, as we breath a sigh of relief and can get our lives back, the hard work starts for them.

Our full bid less financials (for tender rule reasons) is attached to this post.

Thanks again everybody. This has been a really enjoyable and thought provoking experience. I, for one, am going to have to completely re-think the way I do most things!

More on the Open Innovation Exchange here.