Monday, May 3, 2010

FEI2010 - Increasing Value Through Continuous Open Innovation Improvement, A Panel Discussion

C. Engdahl reporting from FEI2010

Increasing Value Through Continuous Open Innovation Improvement, A Panel Discussion
Panel Moderated by Matthew Heim, NineSigma
Panelists: Blaine Childress – Sealed Air¸ Tom Esselman – Hallmark Cards, Graham Mott – Philips Consumer Lifestyle

Matt Heim, president of open innovation service provider NineSigma, led an insightful discussion as part of the FEI2010 Beyond “Open” Summit with a trio of industry practitioners – Blaine Childress, Research Scientist at Sealed Air¸ Tom Esselman, Innovation Exploration Leader at Hallmark Cards, and Graham Mott, Leader of Open Innovation and M&A of Philips Consumer Lifestyle. Their dialogue as the title of the panel discussion suggests revolved around the theme of continuous improvement in open innovation.

In listening to the panelists, it was clear as in many organizations that “open innovation” has been taking place for quite some time within these companies. No one ever called it “open innovation” though. Yet partnerships, often informal in nature, have existed within these organizations for quite some time. What’s different in today’s innovation environment is the definition, formal structure, and discipline needed to effectively perform open innovation. The global scope and complexity of open innovation in today’s world essentially requires structure and discipline. It’s worth noting each of the three companies – Hallmark, Sealed Air, and Philips Consumer Lifestyle – has partnered with NineSigma to deliver open innovation services. NineSigma has certainly helped provide structure and discipline to their efforts.

A shift is taking place. No longer can these organizations, like others, simply rely on growth based on internally focused efforts. With Hallmark for instance, throughout the ‘80s and ‘90s growth came through distribution and pricing. They were almost exclusively internally focused. And if they needed talent, they’d simply hire it, rather than partnering. The strategy worked for a while, but was not sustainable.

An interesting part of the discussion came when panelists were asked to share what could best be described as “ah-ha” moments – the surprising aspects of open innovation implementation that they didn’t necessarily expect. The most revealing insights are as follows:
- Opportunistic solutions often emerge from open innovation efforts. You get solutions that you didn’t necessarily specifically ask for.
- Open innovation creates a heightened sense of competitiveness amongst suppliers. Existing suppliers may produce novel solutions to problems you’d expect a new supplier to tackle. Existing suppliers will raise their competitive game so to speak. They don’t want to be shut out of new market opportunities and thus get more creative themselves.

Of all the talking points brought up during the panel discussion, the most compelling insight was simply that “open innovation is a necessity.” It should not be viewed as simply another ordinary process to be layered into the multitude of other corporate initiatives and duties.

Open innovation is not something where you can wave a magic wand and expect things to just happen. It requires discipline and effort. It requires a change in mindset.” - Tom Esselman, Innovation Exploration Leader at Hallmark Cards

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