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Friday, October 16, 2009

Intrapreneurship and Open Innovation for Small Business

by Stefan Lindegaard

Open Innovation and Intrapreneurship for Small BusinessI have been asked to present my views on how small and medium-sized companies can move to the next level by implementing open innovation and intrapreneurship.

I am still working on the presentation, but below you can see some bullet-points I plan to include in the 3 hour-long session. What do you think? Am I missing something important?

Besides hearing your comments here, it would be great to get out and share this with other companies, organizations and event organizers around the world. Let me know if you would like to discuss these:

The Challenge
  • Growing a startup is very much about executing on a great product, idea or technology. However, as the company grows focus tend to shift towards control rather than keeping the visionary thinking and bold approaches that build the company. This must be re-ignited. Understanding open innovation and intrapreneurship can help do this.

All the best people do not work here
  • One key reason for Procter & Gamble to initiate open innovation programs was that they learned that for each of their 7,500 R&D people there were 200 people outside the company with equal skills and competences. An ignorant - and arrogant - company would ignore these 1,500,000 million people arguing they do not matter as they do not work for us. P&G did not ignore this. They understood they should connect their own organization with the best and brightest from the outside world. Given the size of smaller companies, this mindset becomes even more important.

People matter more than ideas
  • Innovation is not only about finding the right idea or developing a great technology. A company must also be able to identify and develop the right people who can be matched with these ideas at the right time.

Innovation is about more than just products
  • Check the Ten Types of Innovation framework developed by Doblin. It is a great tool to broaden people's mind on innovation.

Think in terms of eco-systems
  • Today, one company does not compete against another company. Eco-systems compete against other eco-systems. Check this article by Hagel / Seely Brown to learn more: How SAP Seeds Innovation.

Control or contribution?
  • Big corporations can split their open innovation efforts on projects in which they are either are in control or just contributes with IPR or other resources. Smaller companies should only get involved in projects where they are in control or where their contribution is important and valued. The project should also fit the overall strategy of the smaller company.

Big corporations can drain a smaller company
  • Signs of this include long planning periods, difficulties in identifying and working with the right people and too much time spent on patent lawyers too early in the process. If these tell-tale signs appear, a smaller company need to evaluate whether this will become a drain of valuable resources that could be better spend elsewhere.

Where to look versus how to be found
  • Smaller companies need to be more active looking around whereas big corporation can focus more on being found and becoming a preferred partner of choice. Companies can look for projects and partners in their own networks (such as customers, suppliers and partners) or in external networks (such as universities, intermediaries and consultants).

Is the company ready for open innovation?
  • Any company must ask themselves why open innovation is relevant to them, how it should be defined to their situation, how it links with the overall strategy and how it can be implemented. Smaller companies must also prepare the organization for a cultural change, develop and implement a networking strategy and train their employees on innovation, stakeholder management and how to work with external partners.

Open innovation is about communication
  • Companies must understand the importance of communicating internally as well as externally. New social media tools such as Twitter (search and share information) and LinkedIn (identify the right people, search and share information) must be understood and leveraged.

I am looking forward to your comments.

Stefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation.

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Anonymous Stefan Doering said...


Good layout. I think it is crucial to emphasize it requires a completely different mindset of at the CxO level to encourage and support ideas.

Even if the ideas that come through are not ultimately good ones. Just like brainstorming, need the creativity to flow.

Also, how to set up an intrapreneurial structure in-house to encourage team members to innovate and create.

This might include training seminars, internal pitch contests, etc.

Lastly, the fun factor. If it is perceived as work, there may be lack of interest.

I teach environmental intrapreneurism at Columbia's Center for Environmental Research and Education and have done a proposal for GM last year (before they hit the wall.) Unfortunately, by the time senior management decided to act on it, it was too late for them to innovate!

7:44 AM  
Blogger Ricardo said...

so far so good.
I believe it might be a good idea to focus also on how to encourage the participation

8:54 AM  
Blogger Dee Gardner - Management Heretic said...

I agree with Stefan Doering. It is controlled, encourages or destroyed by management.

You have to find people that are gifted with the ability to innovate.

Some innately posses the gift, some can be taught. It is imperative that organizations identify and correctly place the innovators.

9:40 PM  
Anonymous Wolfgang Gruel said...

I like the layout of the post and the topic as I think Open Innovation in small enterprises can be a very powerful approach.

Some remarks that came into my mind:

- ressources in small enterprises are often very limited, so find the role of your buisiness in your Open Innovation ecosystem: If you try to cover all aspects of Open Innovation at once you will probably get lost. Focus e.g. on the Fuzzy Front End as a supplier of innovative concepts or act as a provider for specific solutions in other peoples' business.

- concerning the chances for small enterprises:
there is probably less resistance against ideas from the outside because less people are involved and they are more used to listen to the outside world as they are in large companies. So small enterprises have a speed advatage and thus should play other roles in their Open Innovation ecosystem as large companies (e.g. as an idea catalyzer for large companies).

5:39 AM  

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