Upload
others
View
2
Download
0
Embed Size (px)
Citation preview
© 2010 Henry Chesbrough 1
Open Innovation:Implications for Catalonia
Henry ChesbroughHaas School of Business, UC Berkeley
yESADE, Ramon Llul University
La Pedrera, BarcelonaJune 17, 2010
2
The Current Paradigm: A Closed Innovation System
ResearchInvestigations
Development New Products /Services
TheMarket
Science&
TechnologyBase
R D
Xerox’s Business Model, and Project Evaluation Errors
3
Designed to minimize “false positive” errorsIgnores risk of “false negative” errors
4
Chess• Plan several
moves ahead• No new
information needed
• You know what you and your opponent have
Poker• Pay to play• Pay for new
information• Discover what
other players and you have
5
6
Xerox: Great at Chess, Lousy at Poker
7
CurrentMarket
InternalTechnology
Base
R D
The Open Innovation Paradigm
Technology Insourcing
New Market
Technology Spin-offs
ExternalTechnology
Base
Other Firm’s MarketLicensing
Open Innovation
Our current market
Our new market
Other firm´s market
External technology insourcing
Internal technology base
External technology base
Stolen with pride from Prof Henry Chesbrough UC Berkeley, Open Innovation: Renewing Growth from Industrial R&D, 10th Annual Innovation Convergence, Minneapolis Sept 27, 2004
Internal/external venture handling
License, spin out, divest
Philips Research,Ronald Wolf, 10/08
2003: We broke up the fortress …
Philips Research,Ronald Wolf, 10/08 10
Bringing in the right partners – Open innovation
> 75 companies and > 7000 people at High Tech Campus Eindhoven
Research institutes
Economic development companies
Corporate innovators
Consultancy & services
Philips Research,Ronald Wolf, 10/08
The expansion of the corporate funnel
Front – end Development Commercializa
InsourcedIdeas /Technology
ODMOEM
Spin inStart upsIP insourcing
Incubators Spin outIP Licensing
Acquisitions
Alliances
© 2008 Henry Chesbrough 12
Procter & Gamble
• P&G used to be a VERY closed organization– “We invented Not Invented Here” – J. Weedman
• P&G financial crisis, in 2000– Missed a series of quarterly financial estimates– Stock market lost confidence in the company– Stock price fell by more than half in 4 months!– CEO (Jagr) was fired
© 2008 Henry Chesbrough 13
P&G’s Stock Price: 8/1998-3/2000P&G Stock Price
40
50
60
70
80
90
100
110
120
130
9/17/19
98
10/1/
1998
10/15
/1998
10/29
/1998
11/12
/1998
11/26
/1998
12/10
/1998
12/24
/1998
1/7/199
9
1/21/19
99
2/4/199
9
2/18/19
99
3/4/199
9
3/18/19
99
4/1/199
9
4/15/19
99
4/29/19
99
5/13/19
99
5/27/19
99
6/10/19
99
6/24/19
99
7/8/199
9
7/22/19
99
8/5/199
9
8/19/19
99
9/2/199
9
9/16/19
99
9/30/19
99
10/14
/1999
10/28
/1999
11/11
/1999
11/25
/1999
12/9/
1999
12/23
/1999
1/6/200
0
1/20/20
00
2/3/200
0
2/17/20
00
3/2/200
0
3/16/20
00
3/30/20
00
Pri
ce p
er
sh
are
© 2008 Henry Chesbrough 14
Searching for the Root Cause
• “We fundamentally had a growth problem. Our current brands were performing well. But we weren’t developing many new brands.” – C. Wynett
• To get new brands, P&G needed to open up.• Connect and Develop
– SpinBrush, Swiffer, Regenerist
| 15| 15
A.G. LafleyPresident and CEOP&G
“We will acquire 50% of our innovations from outside P&G”
Jeff Weedman 28 External Business Development managers
VP, External Business Development
“We don’t care where good ideas come from.”
Larry Huston (just retired)120 Technology Entrepreneurs
VP, Knowledge & Innovation, Corporate R&D
Nabil Y. SakkadSVP, R&D, Global Fabric & Home Care
“There’s 1.5 Million people in the world who know about my business. I want them on my
team”
Example: Proctor & Gamble
| 16| 16
P&G Share Price Restored!
© 2008 Henry Chesbrough 17
The New P&G
• Many processes to enable open innovation– Technology scouts– Legal templates for IP, partnering– Investments in Innovation Intermediaries
• The Goal Now: Become the open innovation partner of choice
Which Would You Rather Have?
Better Technology Better Business Model
18
OR
19
Go with the Business Model
Business Model > Technology
Ability to profit from technologyAbility to scale technologyAbility to continue innovating
technologyAbility to acquire technology
Generic Airline Business Model
20
Passengers Airline
Food Aircraft, FuelCleaning
Airport:• Runway• Check-In• Jetway
21
Ryan Air
Ryan Air is a regional low-fare airline operating in the United Kingdom and northern Europe.
•Only flies into regional airports, no landing fees. •Guarantees airport certain # passengers in their terminal•Airport pays Ryan Air to operate out of its airport•Airport provides Ryan Air a percentage of the revenues from shops, restaurants, car hire and hotels at airport.
Ryan Air Business Model
Passengers
Ryan Air Aircraft, Fuel
Airport:• Car Hire• Parking• Hotels• Shopping
and Food
Food
22
Jetway,Check-In,Cleaning
23
The Business Model
• Identifies market segment• Articulates value of proposed offering• Focuses on key attributes of offering• Defines value chain to deliver offering• Creates way for getting paid • Establishes value network needed to sustain model
Sample Business Model Revenue Mechanisms
24
Per item and “all you can eat” Razor and Razor Blade
Free trial, follow on subscription
Free, with paid advertising
Sample Business Model Revenue Mechanisms
25
Recruit your friends, and save money
Market maker/aggregator/switchboard
Turn cost centers into profit centers:
Airport landing fees (Ryanair)Hotel room
26
Business Model Maturity Stages
6 Stages:
1. Undifferentiated business model
2.Differentiated business model
3. Segmented business model
4. Externally aware business model
5. Integrated business model
6. Platform leadership business model
openclosed
27
Pitch IT investments
Evaluate collaboration
partners
Understand customers
Understand suppliers
Understand competitors
Train new employees
How to use a
Business Model
An Iberian Example: El Bulli
© 2008 Henry Chesbrough 28
29
An Iberian Example: El Bulli• Ferran Adria studies molecular gastronomy, working
with Herve This, a French physical chemist• Adria brings this to El Bulli, restaurant is the Lab• Adria launches many business experiments
• Borges: oils, snacks• Lavassa: coffee• N H Hoteles: FastGood, Nhube• Iberian Airlines (with FastGood)
• Careful not to dilute the El Bulli brand
30
How Can A Catalan Football Club Beat One Funded by a
Russian Billionaire?
31
No One Person in Catalonia Can…But Everyone in Catalonia Can!
32
Is the internal R&D department an antiquated concept?
• No – open innovation can leverage internal R&D• But…..• New focus: must look outside as well as inside• New role: connecting to and collaborating with the
outside• New skills: integrating internal and external together• Closer coordination with Intellectual Property• For False Negatives, Business Model Innovation
33
34
Photo Credits
Flickr: Chess/Fox, Tuesday Night Poker/Rambis, Ryan Air/ezreenphotography, Ryan Air New Boeing 787 Colours/macrodebs, 332/265/Digg Pirate, The bus shelter at the edge of the ocean/goddess_spiral, Flickr treo ad/Steve Rhodes, Technology - "Future Vision“/$ydney
iStockphoto: 000003004014, 000003062424, 000004293861, 000007135639, 000005589058, 000000718722
iPod photo: http://www.apple.com/ipodclassic/
35