MOOI Theme 4:

HR and Open Innovation

Prof. Henry Chesbrough, University of California, Berkeley & ESADE

Prof. Wim Vanhaverbeke, Hasselt University, ESADE & National University of Singapore

Dr. Nadine Roijakkers, Hasselt University

March 4, 2013 We would like to acknowledge the efforts of Svenja Paul for providing input to this presentation on the basis of her master thesis.

Big gap in the (academic) literature

• Very little has been written in the academic literature concerning HR practices and the role of HR professionals in Open Innovation

• Golightly (2012) states that “(…) there is considerable potential for further research into the people side of Open Innovation, including (…) human resource practices (…)”

2

The importance of HR practices

• Open Innovation is a people-driven business:

– “(…) Fundamentally, Open Innovation is about people dealing with people (…)” (Harwood, 2010)

• Its therefore highly important to learn how HR practices related to both internal and external talent management can drive Open Innovation success

3

Quotes

4

„You can create followers, but you can‘t create leaders“- Tom Coen, Founder and Managing Director at Induct

„Openness exists in many people but it is buried“- Harry Berry, Founder of Brightstar Innovations

„People can be trained to be more open“- Lucienne van der Werff, VP HRM at DSM Innovation Center

„People should be a lot more proactive than average in order to make quick changes“

- Marc Hufkens, HRM and Deputy CEO at Ridley Bikes

The relation between HR and OI effectiveness

5

HR practices (Internal and external talent management)

Employees‘ attitudes and behaviors

Organizational climate / culture

Open innovation effectiveness

Internal talent management

• OI skills, traits, and roles relevant for selection, training, and evaluation purposes

• Other HR practices to stimulate OI behavior

• Dynamic view on HR in relation to OI

6

OI skills, traits, and roles• HR needs to select and train individuals for OI

based on identified skills (du Chatenier et al, 2010)

• Individuals should have the right capacities (Wagner & Piller, 2012), skills (Mortara et al, 2009), and capabilities (Golightly, 2012)

• Training is essential, rather than merely desirable, when preparing the company for open innovation(Mortara et al, 2009)

7

Soft and hard skills• Soft skills rather than hard skills underlie OI

success

• OI performance evaluation should focus on these soft skills: Its not only important what people get done but also how (Sloane, 2012)

• There should be a balance between hard and soft skills (Thoen, 2011)

8

Necessary OI skills

General (based on Thoen, 2011):

• T profile: Breadth and depth fusing specialisation and generalisation

• Three legged stool: The technical mastery, the organizational mastery, and the business mastery

9

Listing of specific OI skills• Entrepreneurship

• Internal and external networking

• Belief in change, bring about change, faciliate change, question status quo

• Tolerance of uncertainty and risk taking

• Need to learn, open to learn, and quick to learn

• Optimism, passion, and energy

• Able to grasp the big picture

• Team player 10

Interactive poll 1What are the three most important skills for Open

Innovation?

• Entrepreneurship

• Internal and external networking

• Belief in change, bring about change, faciliate change, question status quo

• Tolerance of uncertainty and risk taking

• Need to learn, open to learn, and quick to learn

• Optimism, passion, and energy

• Able to grasp the big picture

• Team player

11

HR practices• Strategic challenge exchange to stimulate

change, creation of relations, exchange of ideas, acquisition of external knowledge, create interdisciplinary knowledge in employees, etc. (Donkor and Monti, 2010)

• Leads to high motivation and retention of staff

• Examples: Google and P&G swapping employees and network of four Swiss MNCs strategically exchanging staff frequently

12

HR practices

• ‘Open choice of career paths and researcher mobility‘ within the firm (Petroni et al, 2012)

• Ideally all talents and future managers start in the R&D department and then move further, so that R&D knowledge is integrated in all departments (Petroni et al, 2012; Harryson, 1997)

13

A dynamic approach

• Different skills are needed in different phases of the innovation process (Lindegaard, 2010)

• It is very rare for one person to possess all the ideal skills for OI; different people may need to be involved in the OI activity at different points in time (Mortara et al, 2009)

14

External talent management

• From 'talent ownership' to 'talent attraction’

• Talents need to be kept connected even when not internally employed

• ‚Attract and manage external talent‘ in addition to ‚finding the best internal talent‘

• ‚Build and curate talent pools‘

• Create value for the external talent pool in order for them to want to stay connected

• Philips example on spinoffs

15

People-driven OI• Individuals and their attitudes are the driving force behind

the success of OI (Du Chatenier et al, 2010; Lichtenthaler et al, 2011).

• Focus first on getting individuals to realize the potential value of Open Innovation, so that they can then put in place practices that realize its actual value (Golightly, 2012).

• The ability of an organization to increase the absorptive capacity of its individuals has come through strongly as a crucial step in realising OI value (Golightly, 2012).

• With respect to absorptive capacity “people may be in a certain role today but have the expertise we're looking for because of previous experience. We often forget people are in their second and third careers” (Byrum, 2012)16

The role of the HR department• The HR profession will have to build new core competences in

network orchestration and managing talent - no matter where the talent lives (Kelley, 2012)

• The HR department needs to redefine its role (Mattes, 2011): Establish a Chief Talent Officer; Engage in building internal and external innovation networks; Contribute to the design of these networks (with respect to e.g. cultural issues); Drive adoption of internal and external innovation networks; Support OI implementation by providing leadership in culture change; Drive OI into all of the firm‘s business processes; Consider OI leadership aspects when leader/top management positions are to be filled; Bring in OI aspects when corporate structures and processes are redesigned; Review existing training and coaching programs in the light of OI; Design new training and coaching programs in the light of OI concepts

17

Interactive poll 2What are the three most important focus points for the HR department?

1. Establish a Chief Talent Officer

2. Engage in building internal and external innovation networks

3. Contribute to the design of these networks (with respect to e.g. cultural issues)

4. Drive adoption of internal and external innovation networks

5. Support OI implementation by providing leadership in culture change

6. Drive OI into all of the firm‘s business processes

7. Consider OI leadership aspects when leader / top management positions are to be filled

8. Bring in OI aspects when corporate structures and processes are redesigned

9. Review existing training and coaching programs in the light of OI

10. Design new training and coaching programs in the light of OI concepts

18

References

• Golightly, J. (2012): Realising the value of Open Innovation

• Blog entry (2011a): innovation-3, Mattes, F.: HR departments take the driver‘s seat in Open Innovation

• Blog entry (2011b): innovation-3, Mattes, F.: Report from the German flagship conference on Open Innovation

• White paper (2012): innocentive, Kelley, B.: Harnessing the global talent pool to accelerate innovation

• Harwood, R. (2010): Motivation in Open Innovation, University of Cambridge (audio interview)

• Du Chatenier, E. (2010): Identification of competencies for professionals in OI teams, R&D Management, 30, 3

• Sloane, P. (2012): A guide to Open Innovation and crowdsourcing

• Interview Chris Thoen (2011): Chris Thoen on Open Innovation part II

• Lindegaard, S. (2010): The open innovation revolution

• Lindegaard S. (2011): Making Open Innovation work

19

References

• Donkor, C. and Monti, F. (2010): Strategischer Talentaustausch als Erfolgsfaktor für Innovationen

• Mack, J. (2008): Google, P&G swapping employees, Direct Marketing News

• Byron, E. (2008): A new odd couple: Google, P&G swap workers to spur innovation, The Wall Street Journal

• Wupperman, A. (2011): Kann man ‚Talente tauschen‘? – Open Innovation im Bereich Human Resources, Presseanzeiger

• Petroni, G. et al (2012): Open Innovation and new issues in R&D organization and personnel management, The Int. Journal of Human Resources Management, 23, 1, 147-173

• Palensky, F. (2011): 3M’s Open Innovation, strategy+business (Interview)

• Harryson, S. (1997): How Canon and Sony drive product innovation through networking and application- focused R&D, Journal of Product Innovation, 14, 288-295

• Bingham A; - Spradlin D. (2011): The open innovation marketplace20

References

• Interview with Byrum, J. (Global Head of Soybean Seeds and Traits R&D, Syngenta) (May 2012). From: Syngenta Thoughtseeders, IdeaConnection. Retrieved from; http://www.ideaconnection.com/interviews/00304-Syngenta-Thoughtseeders.html

• White paper (2012): innocentive, Kelley, B.: Harnessing the global talent pool to accelerate innovation

• Lichtenthaler, U.; Hoegl, M.; Muethel, M. (2011). Is your company ready for open innovation? In: MIT Sloan Management Review, Vol. 53, no.1.

21