Simple Justification for Open Innovation

by Stefan Lindegaard

I stumbled over an interesting paper, "Sourcing External Technology for Innovation", by the Alliance Management Group which has developed lots of great content including the Want--Find--Get--Manage framework below:

• Want - What external resource(s) does the firm want to access from the outside world to meet its strategic intent?


• Find - What mechanisms will the firm use to find these external resources?


• Get - What processes will the firm use to plan, structure and negotiate an agreement to access the resources?


• Manage - What tools, metrics and management techniques will the firm use to implement the relationship?

The article focuses on the Want element of this framework and what I in particular liked is the equation: A + B = C. I have inserted the below edited snippets from the article in order to introduce you to the equation.

We will define our terms:

• Variable A - "Represents the firm's existing 'assets' including its production equipment, core capabilities, intellectual assets, resources and perhaps even its market presence."


• Variable B - "Represents assets that are complementary to the firm's resource base and are only available externally."


• Variable C - "Represents the new product or market offering that goes beyond what the firm is able to deliver utilizing its existing 'assets' alone."

Variable C is a more valuable commercial result that comes from combining the firm's existing 'assets' (Variable A) with those sourced externally (Variable B). This simple equation makes a simple point. If the firm does not access external technology (i.e. there is no Variable B) then Variable C will be limited to what can be achieved using existing capabilities and assets. In other words, Variable C is determined by Variable A.

The goal of the A + B = C equation is to find new value that the firm cannot identify using traditional planning processes. Internal resources (A) retain their prominent role and integrate with external resources (B) to enable a visionary market offering (C) that was unthinkable just yesterday.

When the organization purposefully moves in this direction, senior executives require project managers to redefine C as a variable, enabled by A and B. This is an uncomfortable change for some managers because Variable C is ill-defined, Variable B is fuzzy and Variable A is the only known quantity.


I believe open innovation is about bridging internal and external resources and to identify and execute on the opportunities that arise on this interaction. I like how The Alliance Management Group turns this into an equation and I wanted to share this with you.

Don't forget to read the full article: "Sourcing External Technology for Innovation"


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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.

Open Innovation Summit - Day Two

by Braden Kelley

The first edition of the conference was held in Orlando, Florida at the Crowne Plaza Orlando Universal. The second annual Open Innovation Summit will be held August 11-13, 2010 in Chicago, IL.

The second day of the conference kicked off with Robert Brands. Here are some of the key takeaways from Robert and the other speakers on the second day:

Robert Brands (InnovationCoach) - Creativity x Risk Taking - There is a multiplier effect if you have the courage. Internal innovation projects need a champion to overcome corporate antibodies and those champions need to be part of other teams. Too often we forget to train our people on the basics of doing proper project management, meeting management, new product development (NPD) next practices, etc. Innovation accountability is critical. Robert Brands is right, many companies don't effectively manage projects or meetings - lots of lost $$$ and time as a result. A survey of 100 firms found the most challenging practices in innovation to be risk-taking, accountability, and inspiration.

Stephen Shapiro (Innocentive) - The worst thing we do for innovation in organizations is hire for competency and chemistry. We need diversity in teams. Organizations have personalities too and these dictate how people work with each other in the organization. Organizational personalities tend to be action/planning focused and idea people tend to get squeezed out - hurting innovation.

Ed Rinker (Clorox) - Clorox has embedded Open Innovation teams that pursue business unit opportunities and a centralized Open Innovation team to pursue breakthru ideas. We use a lot of data and our stage gate process to better evaluate which projects to fund and which to continue. Clorox focuses open innovation efforts on Tech Brokerage, Growth Networks, and Global Stewardship. Growth Networks looks for the holes in our growth plans and focuses on external networks to try and fill the holes. Clorox cross-functional innovation teams include tech brokers, external networkers, designers, sales/mktg, market/consumer research. We make up for our disadvantage in patents to P&G and others by leveraging the IP of external partners who have more IP than P&G.

James Todhunter (Invention Machine) - People think that Open Innovation is about creating new pathways for getting ideas from outside into the organization - not so. Open Innovation is about integrating our external relationships into our internal processes and capabilities. People who are focusing on Open Innovation as idea generation are finding that the signal to noise ratio is quite high. In Open Innovation, partner relationships are often unstable and pose risks to brand equity if not managed well. Companies run into problems with innovation because they are focused on idea and don't have good processes to support innovation. Alignment, authority, and actualization are needed for successful Open Innovation.

James Todhunter (Invention Machine) - In Open Innovation you have to be careful about a partner going and working with a competitor instead - Have you considered this risk? People need to really think about whether their innovation is coming from an idea-first approach or a needs-first approach. In a needs-first innovation approach, you can do directed-ideation. To address alignment issues, you need to engage constituencies in a needs-first innovation dialog. Open Innovation will not work without bi-directional value. Focusing Open Innovation on extracting value is doomed to failure.

James Todhunter (Invention Machine) - People that submit ideas don't always have all of the insights and knowledge to create fully-formed, valuable ideas. Don't ignore the power of secondary research and bring the information you have together in a cohesive way to drive innovation. Use knowledge-enabled innovation processes, research universe of knowledge, and bring in experts to help break through inertia. Don't forget to do anticipatory failure analysis as part of your innovation process. From Ideation to Product Innovation = Ideation -> Capture -> Research -> Rank/Qualify ->Validate/Refine -> Productize.


"3 F's of Innovation - Fit, Feasibility, Finance" - James Todhunter (Invention Machine)

"Leverage power of Innovation Intelligence Ecosystem" - James Todhunter


BONUS: Here is my video interview with James Todhunter - CTO of Invention Machine - recorded live at the Open Innovation Summit





Greg Fox (Cisco) - The back of every Cisco badge has the principles of Cisco's culture on it. Cisco is looking at new ways to partner - both growing ecosystems and compartnering (comfortable with competing and partnering). Every market adjacency we are seeking to address requires a partner ecosystem. We will compete aggressively with orgs like Microsoft, but at same time we will collaborate with them for good of the customer. Cisco alliance approach = Evaluate -> Form -> Incubate -> Operate -> Transition -> Retire.

Greg Fox (Cisco) - Cisco is trying to move from a culture of competition to a culture of shared goals. Every organization in Cisco (including councils) has a Vision-> Strategy -> Execution captured and communicated. Out of 1,000 potential acquisitions identified, Cisco contacts about 100, does due diligence on about 30, and closes about 9 deals. Cisco has a well-defined acquisition strategy - focus on similar core values, people, technology, and where effective integration is possible. Cisco has alliance extranets to link with partners and share joint business and marketing plans.

On the second Intellectual Property (IP) panel, they spoke about how there is no standardization amongst university tech transfer offices - Some have to get governor approval. Another big problem companies have in working with universities is that they act as if they have an innovation, but no, they usually only have an invention, and they tend to price an invention as if it were an innovation. Many universities make crazy demands in selling IP - sometimes even IP that hasn't issued a single patent yet.

Most university tech transfer offices want to sell the next Gatorade - they need to focus on hitting singles and doubles instead. University tech transfer offices often don't take into account all of the work it will take to commercialize an invention's IP. People who are interested in tech transfer office rankings should check out "Innovation U" - you can Bing it. University of Wisconsin-Madison is an innovator in tech transfer. Eugene Buff made an audience comment that most university tech transfer offices are more focused on faculty retention than on revenue. Carrington Smith says Air Products focuses on university professors in starting their IP licensing process - not on tech transfer offices.


"When world is flat, you don't have to emigrate to innovate" - John Tao (Weyerhauser)


John Tao (Weyerhauser) - Drew a distinction between baseline, trending, control, diagnostic and planning measures vs. results & in-process metrics. Weyerhaeuser also has innovation metrics on leadership & culture. Their metrics for Open Innovation include the percentage of revenue derived from alliances.

Linda Beltz (Weyerhauser) - Measurements are only as good as your measurement capability, and measurement needs change over time. Early in Open Innovation maturity, the cultural measures are most important. Later the financial measures are more important.


"Open innovation is not about outsourcing." - John Tao (Weyerhauser)


Stephen Hoover (Xerox) - It took a decade for Xerox to further develop Chester Carlson and Battelle's IP into the successful product that gained traction. Innovation and Open Innovation are leaky funnels and that's okay because you can't do everything. Open Innovation efforts should start with suppliers, partners and customers, but of course don't ignore other innovation sources. Xerox focuses on dreaming with our customers - "What if you could print on magnets?" - Now we sell paper shaped magnets for fridges.

Stephen Hoover (Xerox) - We look at customer empathy (latent needs), trend analysis, market surveys, focus groups and non-customer analysis for innovation. Xerox created a CTO-led Open Innovation Council with P&G. We're finding value with P&G that we didn't initially anticipate in the original agreement. He showed partner example with XMPie and Multi-Media personalized Imaging - very cool stuff. Next step is to take personalized imaging to digital - personalized web page linked on a DM piece - 5-10x response improvement.

Stephen Hoover (Xerox) - Too many organizations don't instument to test (or to educate or to market) in the online environment - Don't forget this! Open Innovation helps to share the risk - We only invest in 1 in 10 reasonable ideas. Nothing wrong with collaborating with competitors on foundational research at universities - shared risk - government pays attention. When we go to the state and universities with our competitors saying that a research area is important - we get their attention. Faculty members will get the rest of the system to follow along with what they want to do so.

Stephen Hoover (Xerox) - Xerox is really pushing services innovation research because services is the fastest growing part of the economy. Almost every company has outsourcing partners - UPS or FEDX are your shipping department if nothing else. Sharing the risk by balancing financial investment versus skills investment by partnering with others. How do we respond to competitive copying? - We focus on trying to make it easier to partner with us - It's a race to be faster!

Stephen Hoover (Xerox) - We have done our best to keep projects alive in the downturn with our partners so that we have projects in 12-24 months.

Overall it was a great conference, and it reinforced how important senior leadership support is to successful innovation, along with other things like good processes, cross-silo communications. I look forward to the August Open Innovation Summit in Chicago.


Check out the Open Innovation Summit - Day One wrapup here.

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Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

Open Innovation Summit - Day One

by Braden Kelley

Earlier this month I led a workshop at the Open Innovation Summit on identifying and removing barriers to innovation with special guests: Greg Fox (Cisco Systems), Helene F. Rutledge (GSK Consumer Healthcare), and Hutch Carpenter (Spigit).

The first edition of the conference was held in Orlando, Florida at the Crowne Plaza Orlando Universal. The second annual Open Innovation Summit will be held August 11-13, 2010 in Chicago, IL.

After the workshop I covered the rest of the Open Innovation Summit on Twitter as @innovate - check out the #OIS09 transcript courtesy of @renee_innosight.


"Press has done a good job of turning innovation into the buzzword of the decade." - Philip McKinney (HP)


The conference kicked off with Phil McKinney of HP, and he was followed by innovation leaders from companies such as CSC, Shell, P&G, Whirlpool, Clorox, Xerox, and more. I don't think there was a single company speaking at the conference with an open innovation effort that didn't also have an internal innovation effort as well. Personally, I believe that it is imperative to launch an internal innovation effort first in order to work the kinks out and build up your capabilities internally before opening yourself up to the outside.

Some of the key things that came out of Phil McKinney's talk included the idea that companies and countries will have to choose whether they will be focused on creating ideas or on implementing ideas. Also, as knowledge becomes a commodity and work is off-shored and verified on-shore, creativity is becoming the key to creating value. At the same time, there is often an innovation gap as many ideas submitted are not well thought-out, but at the same time the stupid ideas are often the only ones radical enough to generate big returns.

Never forget that creativity is not a gift, it is a skill that can be developed and strengthened. Ask "killer questions" to force people to look beyond the obvious, and try to prevent people from stopping after they hear the first reasonable solution. Companies do a variety of things with the people who submit selected ideas, HP plucks teams that submit successful ideas out of the business and puts them into innovation project teams focused on creating a successful launch. Change is hard for middle managers. Don't tell them what you are going to do, tell them what you did. Final point - ideas are becoming the oil, the gold - the highly valued - So, does this mean that ideas are becoming a commodity then?


"Ideas without execution are a hobby" - Philip McKinney (HP)

"Innovation results from the creative application of intellectual capital in a disciplined manner to a problem." - Lem Lasher (CSC)


Other conference highlights:

Lem Lasher (CSC) - How do you define innovation when employees have different first languages? - Answer: Use lots of visuals

Lem Lasher (CSC) - Innovation is difficult because most innovations will fail. But obstacles are put up because our mindset is to 'not fail'. "We kill innovation by trying to eliminate risk."

Lem Lasher (CSC) - "While management is focused on the seeds of innovation, they get rid of the water, they get rid of the sunlight, the oxygen, etc." - Great management understands innovation tension and focus on improving the quality of the supporting ecosystem. Great innovation leaders create an innovation agenda that is just provocative enough to enable change without stimulating corporate antibodies. CSC focuses on incremental and adjacent innovations, consciously avoiding breakthrough or radical innovation.

Lem Lasher (CSC) - Revolutionaries hate change so much that they seek to create their change with violent efficiency (so they don't have to change). Who is putting their career on the line for improving innovation process and culture in your organization?


"None of us went to school to learn how to fail. The more we try to succeed by innovating, the more we are destined to fail." - Lem Lasher (CSC)


Raj Aggarwal (Rockwell Collins) - Open Innovation for Rockwell Collins is the augmentation of internal R&D efforts with innovation from outside the company. "Internal R&D is a development process, while open innovation is a discovery process." Open Innovation is critical but requires changes in processes - companies that try to force Open Innovation into existing processes will fail.


"75% of firms expect 40% of innovation to come from external sources by 2012." - Raj Aggarwal (Rockwell Collins)


Russ Conser (Shell) - Shell talks about revolutionary versus evolutionary innovation. Revolutionary innovation looks less attractive in the beginning. Innovations follow an S-curve - don't look good early, but in hindsight their value is clear. GameChanger works to try and use different people, process, criteria, etc. to get different outcomes than core business. It's not about the idea, it's about the people and helping them make their idea real.

Russ Conser (Shell) - Shell invests not all at once, but in tranches, and evaluates submissions against six criteria - Potential Value? Could it work? Novelty? Why Shell? Sustainability? Doable Plan? The crazy ideas more likely to get funding. At the same time, your innovation program should be both transparent and below-the-radar. Too much attention, and the corporate antibodies come out.

Ed Harrington and Adam Hansen (Ideas to Go) - Everyone can be trained to be creative, but find the ones who are better at it and train those people instead. Accelerate ideation by bringing in metaphorical thinkers. Insightful people are generally self-revealing. They are happy to share their ideas. Innovators are not always the ones who come up with ideas, but they have a talent for knowing what's valuable.

Ed Harrington and Adam Hansen (Ideas to Go) - With Open Innovation, some people submit, some people have trouble expressing idea, others have no ideas but want to participate. Open Innovation is not a perpetual motion machine... We advocate an episodic approach as opposed to an always open approach when it comes to Open Innovation. Duplicate submissions are one of the key problems to solve for when you go to wide-open innovation. When it comes to duplicates in open innovation submissions - "Let the best expression win."


"I as a business person want to know what my competitors want to own." - Jackie Hutter (Hutter Group)


Jackie Hutter (Hutter Group) - If you are not communicating to General Counsel and IP lawyers what you expect from your IP portfolio, then you're leaving money on table. Some companies prevent people in business from doing patent searches, they fear that somehow it will taint things (create risk). You should be tracking competitive patents because they tell you where competitors are making technology investments. When it comes to patent searching you must frame the question properly so that it yields a narrow & relevant result set. Patent searching can also help you identify ideas that are 'half-baked' (in a good way) that you can acquire and finish off.

Carrington Smith (Air Products) - Keep in mind that by the time it shows up in a patent search tool, host organization has been working on technology for a while. I'm surprised that more companies don't integrate the out-licensing of IP and insourcing of IP and Open Innovation into one team. Many organizations don't look sufficiently at what value their patent portfolio actually has.

Pramod Reddy (P&G) - P&G has 9,000+ people in R&D but there are 2,000,000 researchers working in science areas of interest to P&G. Anything outside the inner circle of project teams is considered part of P&G's Connect + Develop program. The second deal with the same partner takes half as long and is worth twice as much as the first. The speed of review is very important to Open Innovation success, as is communicating to people "no thank you" instead of no response. P&G has done joint ventures with competitors. Why are others so afraid to do the same?

Pramod Reddy (P&G) - P&G is now undertaking proactive approach to Open Innovation through developed networks of potential providers. P&G is now trying to make it so that Connect + Develop (C+D) is the way we work, not a separate program with success stories. Team of 70+ technology scouts around world and must have broad technology understanding and good social skills for networking.

Moises Norena (Whirlpool) - Check out this article for presentation details


"Innovation is all about Enablement" - Robert Zivin (J&J)

"Innovation is Polytheistic" - Robert Zivin (J&J)


Robert Zivin (J&J) - When choosing to pursue innovation, you are choosing internal disruption - we have to be in the business of disrupting ourselves. We have to manage the disruption of ourselves. We have pharma, medical devices, and over the counter stuff too. The more it costs to manufacture a product, the easier it is to do Open Innovation. Capital costs are a hurdle to IP theft. We train a co-operative of people to help respond to the external Open Innovation submissions and help triage. We have a 30-day SLA on our Open Innovation web site - We've got to get back to people (even with a "no") rather than say nothing. The John Hopkins/J&J/Entrepreneur/Philanthropy partnership they've created, could serve as an alternative to the typical University tech transfer process


"In early stage innovation, relationship trumps ownership" - Youseph Yazdi (Johns Hopkins)


Helene Rutledge (GSK) - GSK looked at Samsung, Apple, Roche, P&G, and others in building their approach to Open Innovation. The GSK Open Innovation Model is Want -> Find -> Get -> Manage. The GSK Consumer Innovation Team workspace - The Hub - has people sit in different desks every day in an open plan flexible workspace. GSK's Open Innovation Model requires idea to have scientific proof, solid business case, be unique & have competitive advantage.

Helene Rutledge (GSK) - Aquafresh Isoactive was an Open Innovation example that involved partnering with four different external partners, and idea came from adjacent industry (shaving gel). 'What's In It For Me?' applies to open innovation as well. Hiring for open innovation at GSK involves finding people with a balance of technical licensing and product development experience.

Cheryl Perkins (InnovationEdge) - The soft things are often the hardest when it comes to innovation culture change. Iceberg of Organizational Culture - below water you have norms, unwritten rules, shared assumptions, values, and shared beliefs.


"The future of innovation strategy is all about optimizing relationships." - Cheryl Perkins (InnovationEdge)


Overall it was a great conference, and it reinforced how important senior leadership support is to successful innovation, along with other things like good processes, cross-silo communications. I look forward to the August Open Innovation Summit in Chicago.


Check out the Open Innovation Summit - Day Two wrapup here.

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Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

Optimizing Innovation - Simon Dewulf of Creax

by Braden Kelley

We are happy to bring you some of the key points and insights from Simon Dewulf's talk at the Optimizing Innovation Conference, which was held October 21-22, 2009 in New York City.

Simon Dewulf, Managing Director of Creax, spoke about how there are 67 million patents in the patent database and that a majority of them are 20+ years old and so they are free to use. And, how the other half are patents that could be applied for free to another purpose.

Simon spoke about an intersection example involving a Kraft need and a Goodyear expertise - cutting of viscous elastic material (cheese versus tires). There is no reason these two companies couldn't collaborate because they don't compete.

Amongst other things, Creax has software that helps people visualize connections and search terms from the information in the patent database. Apparently, less than 3% of patents make more money than they cost to file.


"Research is often re-search - the solution is often already existing."


In addition to companies with problems that are looking for solutions, there are also a lot of materials companies that have developed lots of solutions that are in search of a problem. This can be solved somewhat using the patent database.

Four ways of looking at your search for innovation:

1. Value and function

• What values do we want?

2. Out of the box in time and space

• What resources do we have?


• Utilizes the 9 windows method from TRIZ (surrounding, before/box/after, components)

3. Analogy across domains

• Where do we look for inspiration?

4. Variation of properties for new or improved functions

• What do we change, what do we gain?

All customer value requirements can be attributed to four main values:

• More performance


• Less harm


• More convenience (aka interface)


• Less price (aka cost)

They have simplified the TRIZ methodology down to properties and functions and brought in the patent database.


"Can you connect something that is different to something that is better?"


Finally, here are five questions you should be asking yourselves:

1. What can you achieve by changing properties?


2. What other industries should we be following?


3. Who should we be partnering with?


4. Who should be licensing to or from?


5. Why does it take so long to apply in a different domain?


• If you apply a surface similar to a golf ball to trains, you get 30% less friction.

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Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

Managing Innovation is about Managing Change

by Braden Kelley

Innovation is about change. Companies that successfully innovate in a repeatable fashion have one thing in common - they are good at managing change. Now, change comes from many sources, but when it comes to innovation, the main sources are incremental innovation and disruptive innovation.

The small changes from incremental innovation often come from the realm of implementation, so the organization, customers, and other stakeholders can generally adapt. However, the large changes generated by disruptive innovation, often come from the imagination, and so these leaps forward for the business often disrupt not only the market but the internal workings of the organization as well - they also require a lot of explanation.

The change injected into organizations by innovation ebbs and flows across the whole organization's ecosystem:



Let's explore the change categories visualized in this framework using the Apple iPod as an example:

Changes for customers - Any disruptive innovation requires a company to imagine for the customer something they can then imagine for themselves. Go too far past your customers' ability to imagine how the new product or service solves a real problem in their lives, and your adoption will languish.

• Customers had to try and imagine Apple as more than a computer hardware manufacturer, and begin to see them as a company to trust for reliable consumer electronics. They also had to imagine what it might mean to download music digitally (without any physical media).

Changes for employees - Disruptive innovations often require employees do things in a new way, and that can be uncomfortable, even if it is only your employees imagining what you are going to ask them to help your customers imagine.

• Employees had to acquire lots of new knowledge and skills. Apple support employees had to learn to support a different, less-technical customer. Other employees had to learn how to effectively build partnerships in the music industry.

Changes for suppliers - Innovations that disrupt the status quo may require suppliers to work with you in new ways. Some disruptive innovations may require suppliers to make drastic changes akin to those they had to make to support just-in-time manufacturing.

• Apple had to work with suppliers to source components at the higher volumes and shorter lead times required for success in consumer electronics. This meant finding some new suppliers who could handle the new volumes and market requirements.

Changes in distribution - Often big innovations disrupt whole distribution channels and this can cause challenges for incumbent organizations (think Compaq and big box retailers versus Dell Direct).

• Going into consumer electronics meant that Apple had to build relationships with the big box stores including people like Target, Wal-mart, and Costco. They also had to build a completely new distribution system - iTunes - for distributing digital music.

Changes in marketing - New products and services (especially disruptive ones), can require marketing to find and build relationships with completely different types of customers and/or require marketing to speak to customers in a different way or to reach them through different channels.

• Marketing had to begin moving the brand from computing to lifestyle, including changing the company name from 'Apple Computer' to 'Apple' in 2007.
• Marketing also had to learn how to connect with mass market consumers, and help them imagine how this new hardware/software combination would enhance their life - no small task.

Changes in operations - In addition to changes in the supply chain, the organization may have to adapt to disruptive innovations by hiring different types of employees, re-training existing employees, accounting for revenue in a different way, or going about production in a new way.

• The Apple iPod was an experience sell, which highlighted the fact that Apple didn't really have a place where they could help customers experience their products. This led to the opening of Apple retail stores. Apple's finance and operations had to adapt to the change from low volume, high price items to high volume, low price items. Apple also had to build out a resource-intensive online operation that didn't exist before (lots of IT investment).

Note that the chart has arrows going in both directions, but not simultaneously. There is a push-pull relationship. At the beginning of the innovation process the satellites influence what the innovation will look like (new production capabilities, new suppliers, ideas from partners/suppliers, component innovations, new marketing methods, etc.). But as the innovation goes into final commercialization, the direction of the change becomes outwardly focused.

You can see that as an organization is imagining how to take their creative idea and transform it into a valuable innovation in the marketplace, they also should be imagining all of the changes that are going to be required and how they will implement them. This is no small feat, but with proper planning, organizational learning, and adaptation over time, any organization can improve its ability to cope with and even anticipate the change necessary to implement its next disruptive innovation.

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Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

What is Government's Role in Innovation?

by Jeffrey Phillips

Recently a number of bloggers and Tweeters have linked to an interview with Greg Bialecki, who works for the governor of Massachusetts on economic development. The question posed to Bialecki was "What is the appropriate role for state government in accelerating innovation?". Bialecki does a good job of straddling the many sides of the question, noting that many businesses are against more government involvement, since they believe it will lead to regulation and taxes, or favortism.

But the question is a good one. At any level of government, from a city to state or province to a federal or national government, what is the appropriate role for the government in an innovation policy or strategy? It seems to me to break down into three likely outcomes.

The first is based on the Apollo program. In this instance the government identifies a significant need or opportunity and challenges itself and industry to achieve it (put a man on the moon before the end of the decade). Note that the statement doesn't dictate specific technologies or vendors. It is a challenge that created excitement and enthusiasm. Government agencies, private industry and other organizations then asked themselves - OK, if we are going to achieve this seemingly difficult mission, what is necessary for us to do? Then they went on to solve a number of engineering challenges and captured the attention of the nation. Thousands of kids (I'm one) wanted to become an astronaut because of the excitement and glamor. I think that this kind of effort - creating a challenge that engages all of the population - is one involvement in innovation that governments should have continuously. Right now, rather than creating a 1000 page health care plan, the government should set a specific goal and ask all of us to help achieve that. Perhaps the goal is universal coverage with no increase in healthcare outlays. We need big challenges to come together and overcome these hurdles.

This leads to the second possible government involvement - selecting preferred industries or technologies. Government involvement in selecting the "best" or preferred industries or technologies is fraught with hazard. Left to its own devices, the government that created ARPANET might still be monopolizing the ability to communicate and interact. Clearly any government with research facilities should be responsible for generating new research, but not selecting which technologies are approved or disapproved. Government involvement at that level and scale is bound to be tied up with political favoritism and will be showered on the largest and most powerful (see for example the GM bailout, or the bailout of larger banks).

The third kind of involvement is something rarely seen in the US outside of the Defense Department - a public/private partnership. The government could easily define specific issues or challenges it faces and create opportunities for innovation to address these specific issues. While this does occur on a limited basis today, the contracting rules and the size and influence of incumbents make it difficult for smaller firms or new entrants to compete. This means that many of the same old tired ideas and concepts are constantly recycled. If the Federal government could open itself up to more innovation around its biggest challenges, and invite a wide array of innovators and reduce the issues around contracting, it could create an entirely new innovation community which might significantly impact its ability to govern and its ability to deliver services. Secondarily to these outcomes would be the scaling of new ideas which could then flow back into the private sector. Thus, the government could be an incubator of ideas that eventually benefit the private sector. To a certain extent, this was true in the 40s, 50s and 60s, but as significant government research has dwindled, less innovation flows out of the government. We could easily turn the tables by asking the citizens and industries to respond to innovation challenges.

From my perspective, I don't want to see any government picking industries or technologies. I do want the government to identify key challenges and needs, and bring together the best minds to create innovative solutions. Currently, one of the biggest stumbling blocks to innovating with, or for, any government is the bureaucratic hurdles involved in contracting, and the over-reliance on existing "beltway bandits" who have long incumbancy but little innovation incentive. Let's open up the interactions, bring more people and firms into the innovation arena and have governments define the big challenges and turn the rest of us to work.

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Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of "Make us more Innovative", and innovateonpurpose.blogspot.com.

Innovation as a Team Sport - Intuit

by Stefan Lindegaard

YOU: Fresh, dynamic, innovative entrepreneur or company. Relishes out-of-the-box thinking. Eager to deliver new product or service that improves the lives of millions. Web and social savvy. You think in the cloud - as in computing.

US: $3 billion innovative software company. Searching for passionate, spirited people who want to bring new ideas and products to life. Believes innovation is a team sport. Seeking possible long-term relationship. Hope to grow rich together.

No, this is not a dating agency. It is a quite unusual message from Intuit which on October 5 hosts their first Entrepreneur Day.

Entrepreneur Day is part of Intuit's broader initiative to drive mutual growth through open innovation and partnerships. They invite a select group of entrepreneurs, start-ups and small but more-established companies to meet and talk with a broad group of senior Intuit leaders including their founder and CEO.

Such an event is not a new thing in the IT-world, but I hope companies in other industries can learn from Intuit as I find this to be a great example on how you can establish relationships with external partners. Here are a couple of reasons:

1. Well-defined goals

• Intuit has set some clear goals on what they want to achieve from this initiative. They want to partner with young, dynamic companies to develop and launch innovative product offerings. Specifically, they are looking for:


• New business opportunities that align with Intuit's core markets and strategic direction, such as small business, personal financial management, taxation, online banking, personal health care information management and emerging markets.


• Leading edge technologies that Intuit can source to improve existing offerings or to create novel technology-enabled solutions, such as social software, mobile applications, data analysis, and Web 2.0 services relevant to our businesses.


• Such clear goals make it easier for Intuit to be successful at the event and it also makes it much easier for potential partners to judge whether the Entrepreneur Day is something they should consider attending.

2. A filtering process

• Besides the clear goals, Intuit also seeks quality rather than quantity and they have setup a filtering process to get this. Applicants need to fill out a form that is not too long and yet makes sense for both Intuit and the applying company. I also like this sentence taken from the website: "Although we'd like to meet everyone, we can't." Less is often more.

3. Intuit's contribution is clearly communicated

• Intuit does a pretty good job on explaining what the participating companies can expect from Intuit. It goes like this:


• "The potential rewards for collaboration are considerable: access to our leading brands, our large customer base, our award winning product lines, our developer ecosystem and our extensive marketing and distribution channels."

4. Strong commitment

• Intuit shows a strong commitment having their senior people and even Scott Cook, their founder and Brad Smith, the CEO present. It is not only a strong signal to the external partners that Intuit is serious about this event. It is also a strong signal internally that Intuit really wants to build strong external relationships.

5. Commitment to quick follow-up

• Intuit promises the participating companies a timely, candid and direct feedback on proposals and on next steps, if appropriate. You should not expect less as an external partner, but as we have seen in some of my recent blog posts this is not the case at other large companies.

I think Intuit has done very well so far. Hopefully, I can get my contacts at Intuit to share what they learn from their first entrepreneur day with us. It would also be nice to talk with some of the participating companies to check whether Intuit really follows up on their promises.

All in all, nice work by Intuit!

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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.

incentive2innovate - Global Development & Partnerships

The final panel on the second day at the incentive2innovate conference at the United Nations was on global development and partnerships. The panel was moderated by Michael Green (Co-Author "Philanthrocapitalism: How the Rich Can Save the World"):

Andreas Widmer, Co-Founder, S.E.VEN (Social Equity Venture) Fund
Amir Dossal, Executive Director, United Nations Office for Partnerships
Charlie Brown, Executive Director, Ashoka Changemakers
Carol Armistead Grigsby, Deputy Director, Office of Development Partners (ODP), US Agency for International Development (USAID)



Rather than trying to recount the discussion, I thought I would present the Top Insights from the panel:

1. "Innovation requires the use of appropriate technology for your target markets (whether corporate or non-profit)." - Andreas Widmer


2. "When a non-profit is looking to run a contest, it shouldn't be focused solely on the ideas or the solutions, but on the total impact." - Charlie Brown


3. Ashoka's Changemakers seeks to act as an accelerator for external foundations who provide sponsorship for its challenges.


4. "There are lots of social efforts going on and sometimes it can feel overwhelming but you have to get involved." - Charlie Brown


5. USAID plans to launch "innovation springs" similar to the "innovation jams" at IBM.

What do you think?


Braden Kelley (@innovate on Twitter)