Transparency is Key to Open Innovation

In order to compete and win in today’s global marketplace, innovation-driven companies have to find ways to create and develop products and services faster than ever before. Going outside their own four walls to source ideas and solutions in order to expedite the time-to-market cycle — commonly known as open innovation (OI) — has become a widely accepted and applied strategy for companies ranging from global chemical producers and automotive giants, to bioengineering and pharmaceutical companies, sports equipment, consumer and packaged goods makers – even state governments and the National Football League.

In the past, many organizations used open innovation as a “fix” when their R&D bench hit a roadblock or ran out of time.  Or there may have been a lone ranger in the department that went outside to source solutions - but only for his or her particular product line.  These situations required a modicum of transparency.  The seeking organization had to share enough detail about the desired solution to generate high-quality submissions from outside engineers, technologists, inventors, and research laboratories.

Increasingly, though, significant players in their industries such as General Electric, Mondelēz International, Johnson Controls and Siemens have incorporated OI as a core process – not just for discrete situations.  Instead of cracking the doors to R&D just enough to allow the rest of the world to peek in, they’ve flung them wide open.  As a result, innovation flows through their organizations and powers them forward on a daily basis.  How did they get comfortable with being so transparent?  What did they realize that many of their competitors do not?

They realized this: a significant portion of their R&D strategies weren’t such a big secret.  It’s common knowledge within their industries what everyone is looking for and what the current solution needs are.  Candy companies are trying to develop packaging that can prevent chocolate from melting during shipment in the hot months.  Automotive suppliers need smart textiles, and pharmaceutical companies need energy efficient alternatives to distillation to produce pure, sterile water. Instead of carefully guarding their R&D initiatives through the development cycle, managers are openly sharing them. They know they can be transparent with the global innovation community about much of what they are trying to achieve without compromising their competitive position.

Moreover, the increased transparency makes companies more competitive.  It allows R&D departments to build ongoing relationships with external providers that come to know their strategies and even anticipate their needs.  Instead of waiting for a specific request, these external providers can take the initiative to push ideas and present solutions; sparking further innovation with approaches that the company’s R&D departments have not previously considered. These ideas can seed the way for the disruptive innovations that keep companies ahead of their industries. PARC, a Xerox company, is a great example of this practice in action. The company positions itself as in “the business of breakthroughs” and demonstrates this commitment through publicly visible open innovation collaborations that are sparked through a variety of connections, for instance online OI communities like NineSights.

Institutionalizing transparency compels R&D managers to be open by default, not exception.  As a core practice, it requires them to evaluate their portfolio of initiatives using open innovation as a filter to help determine which products to focus internal resources on, and which to advance in partnership with external solution providers.  A company can have many great ideas and plans across its divisions, but these ideas can lose visibility in the absence of a methodology for understanding and prioritizing their viability and development cycles. By the time they are surfaced as priorities again, another organization may have a similar product ready to go to market.

At this level, there is truly no such thing as just a little transparency.  To successfully transform the innovation process, an open paradigm must be embraced and supported company-wide as standard operating procedure.  Not only will this energize innovation across all divisions, it will deliver additional benefits including economies of scale, greater cross-divisional collaboration and solution sharing, and a unified R&D approach that demonstrates to the world that the company is truly innovation-driven.

Of course, changing something so fundamental to a company’s culture is not an easy goal to achieve.  Normalizing transparency as part of procurement and R&D means managers have to become comfortable with sharing information early in the product development process.  For many companies, online open innovation platforms have proven to be an effective way to wean procurement and R&D managers off their traditional process.  These platforms feature managed innovation galleries that are sponsored by the seeking companies, who post their solution needs the way HR managers post job positions on a recruitment site. As a result, sponsors immediately reach a new worldwide network of experts across scientific and technical disciplines.

Practically speaking, innovation galleries present a relatively easy way for companies to shift to a more open process.  Providing R&D managers with a managed online gallery as a tool for sourcing innovation allows them to wade in and get comfortable with the transparency. It will also become clear as connections with solution providers are made and relationships established, that the gallery enables the company as a whole to grow its own worldwide network of potential collaboration partners across scientific and technical disciplines.

Michael J. Thomas, former manager of technology scouting within the Automotive Experience division of Johnson Controls, crystallized the benefit of shifting solution sourcing to an online innovation gallery: “By using OI, we have realized a larger portfolio of high-quality technological innovation opportunities.  For Johnson Controls, OI is not just about finding partners to help us bring our ideas to reality. It’s increasingly about partners finding us, bringing their ideas and new technologies to us.” The Johnson Controls innovation gallery on NineSights.com features several technology searches for solutions including one for smart fibers for automotive seats and another for alternatives to chrome and zinc coatings. These are diverse technology needs and should surface submissions from a range of potential providers that will help grow Johnson Controls’ open innovation community.

As transparency becomes a more accepted and adopted R&D practice, it has the power to significantly impact a company’s success in leveraging innovation. While this initial adoption of transparency contributes to innovation as a core strategic focus, it can also transform the very culture of the organization into one that is more open, collaborative and innovation-driven.