Open innovation & co-creation to transform businesses (By Zane Smilga)

CO-CREATION AND OPEN INNOVATION TO TRANSFORM BUSINESSES 1

CONFIDENTIAL Template Innovation Day 2017 CONFIDENTIAL

CO-CREATION AND OPEN INNOVATION TO TRANSFORM BUSINESSES

Zane SmilgaCoordinator, Inno [email protected]

TRACK 2 - SERVITIZATION & NEW BUSINESS MODELS


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CONTENT

1. CO-CREATION AND OPEN INNOVATION: A “MUST HAVE” COMPETENCE IN FUTURE

2. ESSENTIALS TO MAKE IT WORK FOR YOU

3. LEAN ROUTES FOR A SMART START


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DOES HUMAN NATURE SUPPORT OPEN INNOVATION?


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I S O P E N I N N O V A T I O N R E A L L Y W O R T H I T ?

NOPE.

frustrating, slowand risky!

YES.

speedy, beneficial with

exponential growth

F A I L U R E R A T E S O F S T R A T E G I C A L L I A N C E S : 5 0 T O 7 0 %


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I T ` S H U M A N N A T U R E T O T H I N K I N “ U S ” V S “ T H E M ” co-creation requires trust, common vision, flexibility

A reliable enemy can be preferable to an unpredictable friend, as at least we know where we are with them.

http://changingminds.org/explanations/trust/what_is_trust.htm


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YET “COOPERATION SKILLS” HAVE ALWAYS BEEN BASIC TO SURVIVAL

In the beginning we were simply another smart, social ape trying to survive in the wild.

T O D A Y S A P I E N S R U L E T H E W O R L D .

..because we could cooperate in extremely flexible ways with countless numbers of strangers towards common goals.

Yuval Noah Harari,

Sapiens: A Brief History of Humankind


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CO-CREATION & OPEN INNOVATION: ENABLER FOR FURTHER EVOLUTION

2.5 M Y AGOEVOLUTION OF GENUS HOMO IN AFRICA

200,000 Y AGOHOMO SAPIENS EVOLVE

70,000 Y AGOCOGNITIVE REVOLUTION

13,000 Y AGOHOMO SAPIENS: THE ONLY HUMAN SPECIE SURVIVED

12,000 Y AGOAGRICULTURAL REVOLUTION

500 Y AGOSCIENTIFIC REVOLUTION / RISE OF CAPITALISM

200 Y AGOINDUSTRIAL REVOLUTION

People could increasingly rely on the skills of others for survival

100-50 Y AGOMARKETING REVOLUTION

50-30 Y AGOINNOVATION REVOLUTION

15-5 Y AGOOPEN INNOVATION 1.0 & 2.0REVOLUTION

Millions of years of evolution have designed us to think and live as community members. Within a mere two centuries we have become alienated individuals?

Co-creation & open innovation once again the key to business survival & transformation

Adapted from Yuval Noah Harari,Sapiens: A Brief History of Humankind


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RE-INVENTING OPEN INNOVATION & CO-CREATION TO FIT TODAY`S ECONOMY…


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INTER-CONNECTED WORLD IS THE NEW NORMAL

Sharing economy, Circular economy, IoT, Industry 4.0, self driving traffic systems, smart cities…

Working together in an inter-connected system is the core element of new economy

The innovation basis of many industries today has increased both the need to access new technologies and capabilities from outside the company


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COMPETITIVE EDGE IS AN EVER MORE COMPLEX EQUATION

THE RULES OF COMPETITIVENESS HAVE CHANGED

Companies need to transform and base their competitive strategies in business ecosystems where platforms, not products, rule. It is not limited anymore to their own assets.

(F) NEW COMPETITIVENESS=

agility & strength of your company and the entire eco-system

products + services + communities + technology platforms co-created with partners with a lean eco-system management …

YOUR COMPANY

CO-CREATION WITH THE ENTIRE BUSINESS ECO-SYSTEM

TOTAL SOLUTION

PartnersSuppliers

CustomersCompetitors

Products, services, technology platforms,

sharing access models…

Well connected & integrated set of solutions

to holistically meet the needs of customers


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INNOVATING FOR FUTURE INDUSTRY IS ABOUT BEING READY FOR ALTERNATIVE (POSSIBLE) SCENARIOS

In many cases there is no guarantee on one particular future industry scenario…

What are the options?

A. Preparing for all possible scenarios?

B. b) Together with other industry leaders shape & be in control of the future scenario?

C. c) Preparing your organization and processes to react fast when first signals of change are visible…

in 2015 the smart home market was still a battlefield of competing niche products and isolated protocols

KEY UNCERAINTY 1: MARKET CONVERGENCEKEY

UN

CERA

INTY

2 -

DEM

AND

SCENARIO 3

PEOPLE REMAIN SCEPTICAL ABOUT TOO MUCH TECHNOLOGY AT HOME

SCENARIO 2

SMART HOME HITS THE MASSES – A FEW BIG PLAYERS DOMINATE

SCENARIO 1

SMART HOME HITS THE MASSES – MYRIAD NUMBER OF SOLUTIONS & PLAYERS

SCENARIO 4

SMART HOME REMAINS NICHE – A FEW BIG PLAYERS DOMINATE


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STRONG INNOVATORS USE MULTIPLE SOURCES OF INNOVATION ALREADY TODAY

Being a strong innovator today means having an innovation platform with a large variety of external innovation sources & partners.

E X T E R N A L S O U R C E SI N T E R N A L S O U R C E S

I N N O V A T I O N S O U R C E


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INNOVATION SERVICE PROVIDERS MAKE IT EASIER TO DO OPEN INNOVATION

Hub organizations –innovation service providers – have unique cross-industry experience & knowledge that no other organization posses under one roof.

These players are co-creation partners that allow companies to enter totally new markets & businesses.

The also act as a buffer & bridge in case of complex partnerships with other parties

EXPERTS & LEAD USERS,

START-UPsSMEs

PSR: UNIVERSITIES/ RESEARCH

LARGECOMPANIES

P A S T E X P E R I E N C E

= c r o s s -

i n d u s t r y k n o w l e d g e

e x p e r i e n c e & c o n n e c t i o n

l u g g a g e

INNOVATION SERVICE PROVIDER

COMPANY XFROM

INDUSTRY Y

o p e n i n n o v a t i o n p r o j e c t


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CO-CREATION & TRANSFORMATION ESSENTIALS


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Any large-scale human cooperation –whether a modern state, corporate, a medieval church, an ancient city or an archaic tribe – is rooted in common myths that exist only in people’s collective imagination.

Thus, the secret of cooperation in ancient civilization was probably the appearance of fiction.

Yuval Noah Harari,Sapiens: A Brief History of Humankind

WE CAN COOPERATE = WE SHARE THE SAME VISION

Having a strong co-created vision is part of open innovation success.

Creating a vision together with a new group of strangers is an open innovation 2.0 competence

COOPERATION INTENSITY Long term partnership

One time knowledge transfer/interaction

Sharing business model

INTE

R-L

INKA

GE

ENVISIONING FUTURE MARKET SCENARIO TOGETHER

ENVISIONING FUTURE BUSINESS MODEL TOGETHER

ENVISIONING FUTURE BUSINESS ECO-SYSTEM TOGETHER

ENVISIONING FUTURE PRODUCTS & SERVICES TOGETHER

Sharing product / service

development track

Cooperation on the same value

chain/ business eco-system

Addressing the same

market/industry


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ENVISIONING: A PROMISE & GUIDE TO FUTURE

Nobody can give a guarantee for events in future.

Yet, it has an essentialtwofold effect:

- guides rational innovation efforts

- bonds people physiologically as a visionary inspiration & a shared goal


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A CLEAR & ALIGNED BUSINESS AMBITION

Forming a WIN-WIN partnership with clear & aligned business goals

All partners need to feel treated fair & have non discriminatory rights to share benefits. It is an emotional pre-condition leading to trust.

“money is the most universal and most efficient system of mutual trust ever devised.”

Money is the only trust system created by humans that can bridge almost any gap. Even people who don’t know each other can nevertheless cooperate effectively.



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SKETCHING THE FUTURE OF SHARED BUSINESS UPFRONT

Drawing a clear picture of future business eco-system will make sure that co-creation partners are aligned & can trust each other on sharing business benefits at a later stage.

Monetary, data, service, product flows…..

Next to business planning, it is also s a risk & misunderstanding management.


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An internal or external intermediary party helps to:

- connect companies in relevant partnerships

- guide a co-creation to secure interests of all parties

- manage joint envisioning, planning & partnership building

- facilitate discussions, consensus and mutual understanding

- Fill the gaps and provide a complementary expertise

SOMEBODY NEEDS TO MAKE A BRIDGE TO ENABLE OPEN INNOVATION

“Merchants, conquerors and prophets were the first people who managed to transcend the binary evolutionary division, ‘us vs them’, and to foresee the potential unity of humankind.”


PARTNER 1

PARTNER 2

PARTNER 3 PARTNER 4

CROSS-INDUSTRY BRIDGEMARKER &

INNOVATION EXPERT


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TRANSFORMING ORGANIZATION TO ENABLE OPEN INNOVATION

1. Structure & processes

to support and enable Open Innovation;

Who & how can pick up the question on potential partnership request and opportunities?

2. Investment & leadership sponsorship

How can it be financed?

3. Culture

Incentives and rewards

Support of bridgemakers.

Will people accept & devote themselves to new co-creation initiatives?

FINANCE THE PARTNERSHIPINVESTMENT

Start-ups R&D centers / universities

suppliers

SMEs & Large companies

CONSIDER THE PARTNERSHIPDEDICATED PROGRAMS & STRUCTURES

A P O O L O F P O T E N T I A L C O - C R E A T I O N & O P E N

I N N O V A T I O N P A R T N E R S

competitors

customers

MAKE THE PARTNERSHIP SUCCESSCULTURE & BRIDGEMAKER`S SUPPORT


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MEANS FOR A LEAN START


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FOCUS EFFORTS ON EARLY SIGNS OF LONG TERM TRENDS WITH HIGH GROWTH POTENTIAL

To be ahead of the industry you need to scout for early signs of change in market, technologies, consumption patterns, legislation…


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ABILITY TO WORK WITH MULTIPLE SOURCE OF INPUT FOR INNOVATION

When trying to transform business there is a lot of “newness” to handle…

New types of technologies, markets,

complementary products/services,

business models, resources,

capabilities….

It is relatively expensive, yet it is cheaper & faster to access them from outside the company

PATENTS & TECHNOLOGIES…FUTURE DOMINANCE &

EVOLUTION

MARKET PATTERNS & EVOLUTION POTENTIAL

COMPETITION & RULES OF THE GAME

COMPETENCES

CUSTOMERS & BEHAVIOUR PATTERNS


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RE-THINKING & REINVENTING INNOVATION APPROACH

EVIDENCE BASED INNOVATION

Business transformation = tapping into unknown full with uncertainties and risks.

Customer validation will play an important role -testing ideas and concepts in the real world and checking their relevancy.

E V I D E N C E B A S E D I N N O V AT I O N /

V A L I D AT I O N

INSIGHTS & VALIDATION PLATFORM


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START WITH TEMPORARY INITIATIVES - DEDICATED SPRINTS WITH SELECTED PARTNERS

Fast-forward your open innovation project & see what the end result might look like, how customers will react and whether the partnership is right…

• every sprint has a specific goal (first working prototype, alternative concepts etc.)

• Joint business interests & customer needs are at the center of efforts


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NEW VEHICLES THAT MANAGE BOTH: INTERNAL & EXTERNAL SOURCES: A “MUST HAVE” TO STAY COMPETITIVE

Common models: corporate venture capital, accelerators, incubators, innovation labs, co-creation with partners.

Safe environment for experimentation, rapid incubation and fast failure that will enable any business to speed up the evolution of ideas and opportunities.

Investment needs

Org

aniz

atio

nal

ch

ange

Innovation labs

Co-creation with partners

Accelerators

Incubators

Corporate venturing

F I R S T M O D E L S T O T R Y


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SINCE 2010 A RAPID GROWTH OF THE MOST COMMON TOOLS

These tools have an evolution from being first an experimentation platform to becoming a strategic innovation source & co-creation platform


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OPEN INNOVATION: IS IT FOR YOU?


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OPEN INNOVATION CAN ACCELERATE BUSINESS TRANSFORMATION

ENVISION THE FUTURE OF YOUR MARKET &

BUSINESS

IDENTIFY THE KNOWLEDGE/

TECHNOLOGY/ EXPERTISE GAPS TO GET THERE

FIND A PARTNER TO FILL THE GAPS & ENGAGE IN

CO-CREATION &

ACCELERATE


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Innovation Day is an initiative of Masters in Innovation, the umbrella brand of the Verhaert Group which aims to connect, train and accelerate professional innovators.

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