Organizational set-up for Open Innovation

SLIDESETORGANIZATIONANDPROCESSES.PPTX
© innovation-3; Any unauthorized copying, reproduction or distribution is strictly prohibitedSlide Set Organization and Processes.pptx
Service Offering
Designing the organizational set-up for
Open Innovation

© innovation-3; Any unauthorized copying, reproduction or distribution is strictly prohibitedSlide Set Organization and Processes.pptx - 2 -
HOW SHOULD YOUR FIRM ORGANIZE FOR OPEN /
COLLABORATIVE INNOVATION
AFTER IT DIPPED ITS TOE INTO THE WATER?

Is this your situation?
In the past, your firm has used quite a number of open approaches to innovation – including relatively new ones such
as e.g. using intermediaries.
Not in every case, results were satisfying – But there is enough substance to think about how to weave Open
Innovation into the organizational fabric of the firm
- 3 -
● You hear some voices that argue for a decentralized, non-regulated approach
● There are also voices argue for the opposite
● Some of your colleagues argue with a formalized approach
● Others want to keep a high degree of flexibility
● You wonder how other leading firms take on the challenge of organizational embedding of Open Innovation
and what can be learned from their discussions and decisions
● You are also wondering what the best steps are to drive decisions on how to embed ooi

Then, innovation-3 might provide the solution
● We are sharing with you our insights about how leading firms are taking on the challenge of organizational
embedding
● We advise on how to gauge the key factors that are influencing the optimal Open Innovation organization
and Open Innovation processes
● We help you in deciding which of the potential approaches is the most appropriate for your firm
● We support you in breaking down this challenge into small steps that provide an optimal benefit /
investment and risk position
● We help you on the implementation of the individual steps along the way
- 4 -

„Organization“ defined in the innovation-3 sense
- 5 -
„Change the business“
● Re-alignment
● Organizational innovation
● Kaizen
„Run the business“
● Value-add for internal /
external customers
Systems Information / Reporting Recruiting / Talent Development
Objectives
Operative value-adding processes
Key Performance Indicators
Communicationflowand
Co-ordinationmechanisms
Enabling infrastructure
Hierarchy / Responsibilities
Goals, rewards and
incentives
Decision making /
Management processes
Distribution of decision rights;
Structuring, investigating,
analyzing, decision-making (steps
and committees), communicating
Formal / codified components Informal / “hidden” components
Hierarchy / Roles

The innovation-3 thinking model for answering the organizational part of Open /
Collaborative Innovation
- 6 -
Central
Decentral
In-
formal
Formal
?
?
?
Find the
optimal
balance in
formality /
centrality
Key influencing factors are among others
● Innovation strategy (Extent of cross-x
innovation, innovation timing, innovation
paradigm)
● Open Innovation maturity
● General organizational design (Monolithic vs.
autonomous Business Units)
● Search focus (innovation funnel)
● Other (CoE thinking, HR considerations)
External-
facing hubs
Relevant
corporate
functions
KPIs and
funding
Alignment includes orchestration
● … of internal Open Innovation organization
with external portals / hubs
● … of Open Innovation with IP Management
● … of Open Innovation with M&A
Weaving the Open Innovation organizational
design into the org fabric (see page 5)
Alignment
Embedding

Some thoughts of our clients on designing the Open Innovation organization
● “We are a horizontally integrated company and aim at leveraging our market position and
network of suppliers/clients to become the nexus of the evolving open innovation network.
By doing so we want to increase the number of ideas coming in while decreasing R&D costs.”
● “As our strategy is horizontally oriented we need to put Open Innovation in the context of
standardization (on non-competing areas) and leveraging the ecosystem of upstream and
downstream players.”
● “We need to make sure that our Open Innovation organization reflects our timing strategies
(First-to-market in …, early adopter in …).”
● “We are a ‘need seeker’. Walking in our customer’s shoes is the core of our innovation under-
standing. Therefore our Open Innovation locus needs to be more in Marketing than R&D.”
- 7 -
Find the
optimal
balance in
formality /
centrality
Alignment
Embedding

● “Our optimal mix of de-central vs. central depends on the choices we make regarding break-
through vs. incremental innovation. We have strong Business Units, so a decentralized
model would favor incremental innovation. If we want to shift our innovation attention more
on breakthrough innovation, we need to isolate our Open Innovation team from the
powerful Business Units.”
● “The organizational design we are looking for depends on the maturity of Open Innovation
of our company. Should we find that a strong culture change is necessary then a lot of
processes with a more formal structure will be needed to achieve it. It our culture is ready
for openness and cooperation then a more decentralized design will be successful.”
- 8 -
Find the
optimal
balance in
formality /
centrality
Alignment
Embedding

● We have found it very helpful that an 'External Interface' works through the nitty-gritty
logistical issues that can be real roadblocks. In particular, dealing with IP issues.”
● “Leading US and German firms are integrating Open Innovation and M&A. We will see a lot
more venturing departments (now often treated as part of M&A) migrating into OI hubs.”
- 9 -
Find the
optimal
balance in
formality /
centrality
Alignment
Embedding

● “We have found that Open Innovation allows for ad-hoc OI initiatives, informally directed,
driven by individual functional or Business Units. We have also found that in order to achieve
impact, at some point the efforts need to be stitched together, provided with a more strategic
direction, and aligned with the organization's objectives.”
● “One of the hybrid models to be considered should be Open Innovation-as-a-shared-service.”
- 10 -
Find the
optimal
balance in
formality /
centrality
Alignment
Embedding

Four roles are key in order to drive support of the adoption of Open / Collaborative
Innovation by the organization
- 11 -
● Mediators between the firm and the
outside world.
● Paramount facilitators of Open
Innovation, driving the cultural change
needed within a company.
External broker
Internal broker
Scout
Champion
● Vision, passion and drive, talent for networ-
king, decision-making, communication skills,
and persistence
● T-shaped people
● Maintain strong relationships between
technical groups and market-facing teamss.
● Mediators across functions and business
units within the firm
● They know a lot of people, utilize all
communication channels and thereby
facilitate exchange of information and
assets across the firm
● Extroverted, communicative people
● Vast reach across different areas of the firm
● Managers and senior technical experts,
identifying future trends, needs and
technologies outside
● Assume a strategy-focused or consulting
position within the firm to identify global
trends and technology shifts
● Deep expertise in a number of defined fields
● Collaborate with a network of peers (inter-
nal and external) who are usually globally
dispersed
● Senior leaders, usually executives, owning
a portfolio of innovation initiatives.
● Determine the right mix of projects within
their portfolio – including where / how to
be open
● Responsible for executing collaboration
with external resources once these have
been identified and evaluated
● Through their senior position within the
organization, they have great influence on
incorporating Open Innovation into the
corporate DNA.

Processes: The innovation-3 Want–Find–Get–Integrate–Manage framework
Manage
network
Get
Find
Want Inte-
grate
● Definition of “Where
to be open”
● Briefing
● Definition of OI
approach (“How to be
open”)
● Cross-BU Internal search
● Refinement of Briefing
● Positioning in OI approach /
Selection of OISP
● Preparation of win/win
negotiations
● Win/win negotiations
● Integration in running
innovation work
● Onboarding of external
co-innovator
Foresight
- 12 -
Strategy
Scouting
Ideation Concept Validation Scale-up

Network
management
For every process step, innovation-3 has Best Practices on hand
Get
Find
Want Inte-
grate
● Definition of “Where
to be open”
● Briefing
● Definition of OI
approach (“How to be
open”)
● Cross-BU Internal search
● Refinement of Briefing
● Positioning in OI approach /
Selection of OISP
● Preparation of win/win
negotiations
● Win/win negotiations
● Integration in running
innovation work
● Onboarding of external
co-innovator
Foresight
- 13 -
Strategy
Scouting
Ideation Concept Validation Scale-up
● Business model (Licensing, product acquisition,
contract research, proof of concept leading to scale-
up to manufacturing, joint development, supplier
agreement, others)
● Description of problem (Text for external
target audience, maybe even from totally different
background; Images)
● Benefits of proposed solutions (ideally,
quantified)
● Approaches of interest
● Approaches not-of-interest (non-scope)
● Timing
● Confidentiality / IP position
● Decision process
Example

© innovation-3; Any unauthorized copying, reproduction or distribution is strictly prohibitedSlide Set Organization and Processes.pptx - 14 -
Would you like to start our conversation?
Frank Mattes
Founder and CEO, innovation-3
Grillparzerstr. 4 II / III
65187 Wiesbaden
Tel.: +49-(0)611-59057-0
frank.mattes@innovation-3.com
www.innovation-3.com

Organizational set-up for Open Innovation

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