Ri Open Collaboration Innovation

Re-imagining Collaborationwww.radical-inclusion.com

Utilizing Open Collaboration Principles to Drive Innovation and Increase

Productivity

The What, Why and How for SME’s interested in Open Collaboration

Suresh FernandoPartner, Radical Inclusion

Dec. 4, [email protected]


“Imagination is more important than knowledge”

Albert Einstein


“Given enough eyeballs, all bugs are shallow!”

Linus’ Law


You want more clients! You want to save money You want deeper client and partners relationships

◦ You want to be ‘more connected’ You want to be more intelligent: more knowledge, better

information processing You want to innovate You want to run your organization more efficiently

A Few Assumptions…


What We Want To Accomplish

• Ensure you understand what open collaboration is• Ensure you understand how the principles of open

collaboration can be used to drive innovation and increase productivity in your organization

• Ensure you understand the challenges you will face and how we can help you to overcome them

• Identify specific models that might be applicable in your organization

• Describe Strategy and Implementation processes that will give you an idea how we will work with you.


What is Open Collaboration?

What is collaboration?• The sharing of risks, resources,

responsibilities and rewards• The co-creation of contentWhat is Openness?• the collaboration strategy will reach across

existing corporate boundaries. – within the organization (inter organizational) – across different organizations (intra

organizational).


Why Implement an Open Collaboration Strategy?Fostering Innovation• Solving defined organizational problems• Develop new products and services• Modify or develop internal processes

Increasing Productivity • Reduce costs: using virtual meetings to reduce travel costs, for

example• Increase Frequency and Efficiency of Distributed Meetings: virtual

capabilities allow organizations that operate across boundaries to collaborate more effectively

• Enter Into New Markets: This can be accomplished by joint development strategies, for example


Open CollaborationInside the Enterprise: across functional groups

Sales Management/

Admin.

Inventory

Accounting

OperationsEliminate silos

Introduce platform to connect business units


Open CollaborationOutside Organizational Boundaries

Enterprise Ecosystem

Organization

Client Client Client

Partner Partner

Support: Financing, Volunteers

Services Layer

Service Delivery Layer

Support Layer


Successful Open Collaboration Strategies

Larger Organizations


Which of the following models might work for your

organization?


Strategies You Can Implement With Open Collaboration• Solve an internal problem by crowdsourcing• Generate new product and service ideas by

creating an innovation community• Transform corporate culture by connecting your

organization• Co-creating products and services with your

clients• Developing collaborative research with clients

and partners• Forming a collaborative marketing association• Forming a collaborative procurement network


GoldCorpMobilizing an External Community to Solve an Internal Problem

• Goldcorp is a mining company that was faced with an underperforming mine based in the Red Lake area in Ontario, Canada

• They decided to open up their data on their mines via offering $575,000 in prize money to virtual prospectors.

• Within short order over 1400 mathematicians, students, consultants and of course geologists from over 50 different countries had downloaded the data

• The contest winner, a collaboration between Fractal Graphics and Wall & Associates from Australia, no member of whom had ever even seen the mine, built a powerful 3-D rendition of the mine.

• Subsequent drilling resulted in striking gold in four of the first five recommendations from the winners.

• In 1996 the mine produced at an annual rate of 54,000 ounces/year

• In 2001 it was producing at an annual rate of 504,000 ounces/year


Proctor & GambleDeveloping a Collaborative Innovation Framework

• P&G implemented their Connect & Develop strategy to partner with other organizations to drive the organizations Research and Development process. The results have been no less than staggering.

• Five years after the company's stock collapse in 2000, P&G has doubled its share price

• Has dramatically increased the number of partnerships, licensing agreements etc. increasing rate of successful innovations threefold.

• Today, more than 35 percent of P&G’s new products in market have elements that originated from outside P&G, up from about 15 percent in 2000

• 45 percent of the initiatives in P&G’s product development portfolio have key elements that were discovered externally

• R&D productivity has increased by nearly 60 percent• P&G’s innovation success rate has more than doubled, while the cost of innovation

has fallen• R&D investment as a percentage of sales is down from 4.8 percent in 2000 to 3.4

percent today• Internal Branding: “Connect and Develop” and “50% Rule” – 50% of all new

innovations to come from external partners


IBMFostering Innovation and Transforming Corporate Culture

• IBM developed social media strategy to connect their 380,000 employees (50% of which are mobile) and 200,000 contractors that are spread across 2000 offices in 50 countries.

• ThinkPlace is an open discussion forum where ideas can be submitted, modified and reviewed collaborative by anyone in the organization

• Beehive is an enterprise social networking site similar to Facebook. Employees report that they use Beehive to essentially humanize their workplace by getting to know employees on levels that are not visible from within the corporate environment.

• Jamming is a real time mass collaboration brainstorming session. In 2006, IBM held InnovationJam, an internal brainstorming session that engaged 150,000 people from 104 countries and 67 different companies.


LegoEmpowering a User Community to Co-Create Products

• Lego has developed a complete social media/consumer engagement strategy that includes a number of different touchpoints; a fan club, a social network, online movies, online games, and message boards. They are also working on a massively multiplayer game.

• What is most interesting is that they have opened up their software design process to roughly 120,000 designers who can design their own products. This serves the purpose of engaging closely with those that most care about the brand.


IntelDeveloping a Collaborative Research Framework

Traditional, roadmap driven research processes have been found to be strategically inadequate because:

• New technologies and products that might lead to new business lines and the altering of corporate strategy.

• Disruptive innovation that might threaten the existing product roadmap.

In order to address this strategic constraint, Intel has made a commitment to developing and driving exploratory research processes. The four pillars of this strategy are:

• Providing collaborative research grants• Developing collaborative research facilities in close proximity to

universities• Providing corporate venture capital• Driving specific corporate research projects • See Appendix for further details


The Open Innovation AttitudeHow successful collaborators think

Closed Innovation Principles Open Innovation Principles

The smart people in the field work for us.

Not all the smart people in the field work for us. We need to work with smart people inside and outside the 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 the market first.

We don't have to originate the research to profit from it.

Reference: Chesbrough, H. (2003), "Open Innovation: The New Imperative for Creating and Profiting from Technology", Harvard Business School Press.


The Open Innovation Attitude How successful collaborators think

Closed Innovation Principles Open Innovation Principles

The company that gets an innovation to the market first will win.

Building a better business model is better than getting to the 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 IP, so that our competitors don't profit from our ideas.

We should profit from others' use of our IP, and we should buy others' IP whenever it advances our business model.

Reference: Chesbrough, H. (2003), "Open Innovation: The New Imperative for Creating and Profiting from Technology", Harvard Business School Press.


What is the relationship between open collaboration and innovation you ask?

Scalable Team Thinking

A problem we all want to solve!

No geographic or time constraints


What is the relationship between communications and collective intelligence?

Scalable Information Development

An information repositoryWe build together!

No geographic or time constraints


Why Open Collaboration Works

• Leverage Collective Intelligence of whole organization… plus others outside organization

• Empowers all members of organization: ‘mailroom to boardroom!’

• Fosters innovation and creativity• Cultivate leaders within the organization

Leadership lies with contributors, not established hierarchy

• Team Participation can Scale More resources More ideas

• Creates culture of openness and transparency• Creates sense of being part of much larger whole


Why Open Collaboration Works

• Acknowledges diversity of employee skills – not ‘pigeonholed’ Direct organizational benefit: access to additional

knowledge Indirect organizational benefit: makes employees feel

‘fully valued’.• Connects organization across boundaries

– Creates dialogue that results in new clients, partners…– Creates dialogue that results in different perspective –

thought is not constrained by organizational ‘group think’

• Information transfer accelerated – is viral• Distributed Collaborative Intelligence: proportional to size of

group• Generates knew organizational knowledge; synthesis of

cross boundary information


Three Basic Ways To Capture Value from Open Collaboration

Monetizing what is Co-createdDeveloping Associated Products or

Services: RedHat, for example, built a business providing consulting services in support of the Linux operating system.

Indirect BenefitsPosition your organization as leaders in the community, develop brand recognition within the community etc.


Challenges To Implementing Open Collaboration Strategies

• Effective collaboration will take time• Agreeing on common goals is difficult• Leadership needs to think differently• Organizational culture needs to be

changed• Developing trust is difficult• Resources for new projects are scarce• Providing correct incentives to

stakeholders


Fortunately we will help you to address these challenges!


From Networking To CollaborationUnderstanding the Evolution

Networking Coordinating Cooperating Collaborating

Prahalad and Ramaswamy, The Collaborative Continuum, Collaborative Strategies, Nov. 2001, p.3


Activities Goals Trust

Networking Exchanging information for mutual benefit

Low Trust

Coordination Exchanging information

Modifying activities: regular meetings etc.

Goals are complementary (not in conflict)

Some Trust

Cooperation Exchanging information

Modifying activities

Sharing resources

Goals are compatible Moderate Trust

Collaboration Exchanging information

Modifying activities

Sharing resources

Co-Creating (sharing risks and rewards)

Some goals are equivalent High Trust

From Networking To CollaborationUnderstanding the Differences

Prahalad and Ramaswamy, The Collaborative Continuum, Collaborative Strategies, Nov. 2001, p.3

Camarinha-Matos, Luis M.; Afsarmanesh, Hamideh; Galeano, Nathalie; Molina, Arturo, Collaborative


What Mistakes Should You Avoid?

• Focusing excessively on reducing costs as opposed to increasing revenues.

• Ineffective leveraging of collaboration partners– Superior capabilities– Local knowledge

• Failure to align collaboration and business strategy


What are the Key Strategic Considerations?

• Ensure that the strategy is an organizational one

• Connect Your Collaboration Strategy to your Business Strategy

• Develop a clear leadership message• Develop a culture of trust and openness• Be willing to challenge existing

organizational assumptions


Identifying Your Goals, Objectives and Priorities

Radical Inclusion has designed a questionnaire that will assist you to determine your organizational goals and what the best way to structure your open collaboration process is.


Open Collaboration FrameworksStructural Possibilities

Feature Description

Open anyone can participate/boundaries are less constrained

Closed participation is clearly defined

Hierarchical Leadership structure, intellectual property rights etc. are defined in advance

Flat Leadership structure is emergent, intellectual property belongs in the public domain etc

Adapted from Pisano, Gary and Verganti, Robert, Which Kind of Collaboration is Right for You?, Harvard Business Review, 2008.


Open Collaboration FrameworksIntra-Organizational

Closed Hierarchical Community: Closed/Hierarchical Lead by one organization Problem(s) defined by organization Participants defined Solutions selected by (property of)

leaders

Closed Flat Community: Closed/Flat Emergent Leadership Structure Problem(s) defined by group Participants defined Solution could be selected by

(property of) leaders or open source

Open Hierarchical Community: Open/Hierarchical Lead by one organization Problem(s) defined by organization Participants open Solutions selected by (property of)

leaders

Open Flat Community: Open/Flat Emergent leadership structure Problem(s) defined by group Participants open Solutions are ‘open source’



Advantages/Disadvantages of Particular Frameworks

Closed Hierarchical Community: Advantages Control of participation Control of management processes Focus No intellectual property issues Easy to manageDisadvantages Can’t crowdsource Need to select experts No client engagement Little marketing and business

development potential

Closed Flat Community: Advantages Control of participation Select experts Strong leadership and

participation Foster deep cross boundary

relationshipsDisadvantages No control of management

processes No crowdsourcing Potential conflict over focus and

questions Conflict over IP issues Little marketing and business

development potential



Open Hierarchical Community: Advantages Control over questions and

problems posed to community Supports innovation Some control over IP Engage clients and partners Source ideas from outside

organization Some marketing and business

development potentialDisadvantages Can’t control input from outside

organization Evaluating different ideas from

different sources Management and process conflicts Conflict over IP issues

Open Flat Community: Advantages Fosters Innovation: source large

number of ideas from wider community

Foster relationships outside organization

Leverage intelligence from everywhere – generate innovative ideas

Strong marketing and business development potential

Disadvantages Can’t control input from outside

organization Too many ideas Focusing ideas in a way relevant to

your organization

Advantages/Disadvantages of Particular Frameworks


Selecting the Correct Framework

Depends on Organizational Goals and Priorities

See the Radical Inclusion Organizational Assessment Questionnaire for a systematic method of assessment that maps from organizational goals to the correct framework


Open Collaboration Strategic ProcessesFrom goals to implementation

Identify goals and objectives

Inter or Intra org strategy?

Select Correct Framework

Assess Collaborative

Aims

Develop Governance Mechanisms

Select Correct Tools

Identify Correct

collaboration and

community development

processes

Identify Correct

Performance Metrics


Collaboration ModulesStrategy and Implementation

We expect that the overall process of engaging with enterprise clients to assess their existing strategy and to formulate and implement new strategy that will utilize open collaboration principles to drive innovation will be a modular process.

The delivery will be in the form of specific modules that address the needs of a strategic initiative.


Open Collaboration Strategic ModulesFiguring Out What To Do...

• Open Collaboration Strategy Assessment• Open Collaboration Testing• Selecting the Correct Collaboration

Framework• Assessing Collaboration Aims• Developing the right Governance Mechanism• Selecting the Correct Tools• Formulating the Collaborative Community

Development Strategy


Open Collaboration Implementation ModulesDoing It

• Identification and Engagement of Key Stakeholders

• Developing Culture of Trust and Openness• How To Build Virtual Teams• Running Successful Virtual Meetings• Developing Collaboration Spaces• How To Market Your Strategy Internally

Documents

Ri Open Collaboration Innovation