Open innovation became a key success factor for many companies today. But which is the right method for open innovation? Which are the criteria to plan an open innovation project? Which intermediary or service provider has specific knowledge and expertise in, e.g., crowdsourcing, the lead user method, Netnography, idea contests, technology scouting, or broadcast search? This interactive debate will analyze different platforms that are meant to accelerate innovation. You will leave with a better understanding of the options that are out there and whether it makes sense for you to invest in a certain platform. In reaching their conclusion, innovation professionals must: Weigh the pros and cons of turning to a technology provider to help solve your OI needs Understand the landscape of open innovation intermediaries and platforms Make the most of your investment in an OI platform

1. 4th Annual Open Innovation Summit September 11, 2012
Jose A. Briones, Ph.D.
SPOTS Tracking Systems / SpyroTek Peformance Solutions
Twitter: @Brioneja

2. Agenda
 Background
 Open Innovation Services and Software
 Case Studies:
FVA Group of German engineering companies
in the automotive industry – Dr. Frank Piller
Smarty Ears Use of Open Innovation for
Development of iPad Apps
P&G Yesterday vs. Today
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3. Acknowledgments
 Frank T. Piller
 RWTH Technology & Innovation Management Group, RWTH Aachen,
Germany
 Barbara L. Fernandes
 CEO – Smarty Ears LLC
 BW Magazine Sep. 7, 2012
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Twitter: @Brioneja

4. Objective
 Weigh the pros and cons of turning to a
technology provider to help solve your OI
needs
 Understand the landscape of open
innovation intermediaries and platforms
 Make the most of your investment in an OI
platform
www.Brioneja.com
Twitter: @Brioneja

5. Objective
 But which is the right method for open innovation?
 Which are the criteria to plan an open innovation
project?
 Which intermediary or service provider has
specific knowledge and expertise in, e.g.,
crowdsourcing, the lead user method,
Netnography, idea contests, technology scouting,
or broadcast search?
www.Brioneja.com
Twitter: @Brioneja

6. Clayton M. Christensen
•“There’s a better way for
management teams to grow their
companies. But they will need the
courage to challenge some of the
paradigms of financial analysis and
the willingness to develop
alternative methodologies”
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7. www.Brioneja.com
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8. The Open Innovation Paradigm
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9. Open Innovation Management
 What are the options to implement an
Open Innovation program?
Go at it alone:
○ Website and social media
Engage an Open Innovation platform
○ Open innovation software
○ Open innovation services
www.Brioneja.com
Twitter: @Brioneja

10. Open Innovation Services vs. Software
 Open Innovation Services offer a
communities of experts in a variety of
fields.
Problems are posted for a fee to get
feedback from the community
 Open Innovation Software/Platforms
relies in the company’s customer base
and a broader reach
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11. Open Innovation Services
www.Brioneja.com  Source: Frank T. Piller
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12. Case Study: Piloting open innovation (co-creation with technical experts) in
the German industry
 Group of German engineering companies in
the automotive industry: Suppliers and users
of driving systems (gear boxes, power train ,
etc.), organized in industry association (called
"FVA")
Frank T. Piller
 Many of them are world market leaders in RWTH Technology & Innovation
Management Group, RWTH
their sector Aachen, Germany
 Very engineering driven, successful, very “We took some
"German" engineers. Typical example of problems they could
not solve before and
"local search" !
"crowd-sourced" these
 Problem: For some technical problems, they problems to external
did not find sufficient solution problem solvers via an
intermediary (broker)”
 Project with our group: Pilot co-creation for
technical problem solving ==>
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13. In the project, we selected five problems Frank T. Piller
from companies and the FVA research RWTH Technology & Innovation
consortium to be "broadcasted" by Management Group, RWTH
Aachen, Germany
NineSigma.
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Twitter: @Brioneja Source: David Feitler 2010

14. www.Brioneja.com
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14

15. The solutions in general were both from Frank T. Piller
sources new to the companies and did RWTH Technology & Innovation
Management Group, RWTH
contain a new technological solution Aachen, Germany
Evaluation of solution proposals by project steering committees
Institution Solution Technology
RFP
new known new known ?
66198 23 3 16 6 4
66204 10 0 3 7 0
66207 7 0 6 0 1
66201 33 2 22 8 5
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16. Return on open
innovation
Data from VDMA project in
textile machinery industry
Frank T. Piller
RWTH Technology & Innovation
Direct cost of OI project Management Group, RWTH
€ 18 000 ,- + approx. 2 person Aachen, Germany
months
Estimated value of realized
solution
€ 375 000,-
ROI : approx. 2000%
Quality of solution:
Fit to www.Brioneja.com
requirement: 89% in
average of suited solutions
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17. Open Innovation Software
 Spigit
 SpigitEngage for Facebook,
organizations can engage their
customers in social co-creation by
tapping customer insights through
idea generation, free thought,
campaigns, contests, and game
dynamics.
 Ryma
 Ideascope integrates customer
feedback with other systems like
Help Desk, Customer Relationship
Management (CRM), Demand
Management
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18. Open Innovation Software
 Imaginatik
Innovation Central
collaboration platform allows
organizations to include or
exclude whichever groups or
individuals are most
appropriate for the topic
 Nosco
Idea management software
Publish, rate and collaborate
on ideas
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Twitter: @Brioneja

19. Smarty Ears’ Open Innovation
Program
 Smarty Ears is the largest
app publishing company in
the segment of speech and
language development.
 Over 40 total Apps
 Most for iPhone and iPad but
some for Android.
 Promotion is via Social
Media and Website
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20. How The Program Works
 Just like in traditional publishing,
there are authors to
books/therapy materials and
there are publishers.
 Smarty Ears is the App
publisher and the submitter is
the author
 Submitters continue to own the
idea and materials they
provide, and therefore they get
paid royalties for it.
 The final application, coding,
and any art work developed
belongs to Smarty Ears.
www.Brioneja.com  Typical contract is 5 to 10 years
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21. Open Innovation Program
Results
 ~10 ideas for new
apps/month
 1 out of 10 becomes an
app.
 10 new apps are a result of
this process
 More apps to market - faster
 Recent app release from
Open Innovation program
“Fun and Functional” is
currently on top 50
educational app list on
www.Brioneja.com
iTunes
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22. P&G
 Connect and Develop – Model for Open
Innovation Launched in 2000
 P&G needs are posted on website in classified
categories, and then anyone can propose their
ideas and get assessed by a specialized team.
 By 2006, 35% of all P&G products had an
external component vs. 15% in 2000
 R&D productivity increased 60%
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23. P&G Today – BW Magazine Sep. 7, 2012
 P&G CEO Lafley decentralized R&D, making
business-unit heads responsible for developing
new items.
 R&D chief Brown says that inadvertently slowed
innovation by more closely tying research
spending to immediate profit concerns.
 Between 2003 and 2008, the sales of new product
rollouts shrank by half.
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24. P&G Today – BW Magazine Sep. 7, 2012
 Spending on research and development in fiscal
2012 ended June 30 was $2.03 billion, or
2.4 percent of sales, the same as the prior year
and down from 3 percent of sales in 2006
 P&G’s most recent homegrown blockbusters --
Swiffer cleaning devices, Crest Whitestrips, and
Febreze odor fresheners -- all went on sale at
least a decade ago.
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25. P&G Today – BW Magazine Sep. 7, 2012
 By the time McDonald became CEO in 2009, the
number of what the company considered to be big
product breakthroughs had fallen to an average of
fewer than six per year as unit heads focused on
short-term results and smaller inventions
 McDonald has said he hopes cost-cutting will free
up more money for product development
 Assembled a team of researchers, marketing managers and
senior executives from across the company to chart a bolder
innovation course.
 Created new business creation and innovation unit
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26. Keys to Success
 OI is a way to speed up time to market and increase
probability of success
 OI includes sourcing for products, technology, intellectual
property and ideas.
 OI is NOT outsourcing. OI requires constant interactions
between companies and inventors. It requires huge
partnering capabilities on both sides.
 OI will not decrease a company’s costs – it will only move
it among line items. R&D budget may be less over time,
but Legal and Business Development budgets will
increase immediately.
 Source: Open Innovation – Paradigm Shift or Program?
September 21, 2009 by Suzanne Harrison
www.Brioneja.com
Twitter: @Brioneja

27. Lessons Learned
 Using the right approach
to open innovation is
critical for success The SpyroTek™ Method for Innovation Management
Depends on the type of Quadrant IV
Resources
Launch
Roadmap/Timeline Quadrant I
problem/industry Level Idea
Generation
Risk Analysis 3
 Open Innovation is NOT Customer
2 VOC
Testing 1
a substitute for R&D and Time Time
a long-term innovation Supply Chain
Analysis
Technology
Assessment
program Value in Use
Analysis
Business
Case
Regulatory
Must use a non-linear Quadrant III Prototype
Development
IP Strategy Quadrant II
Resources
management approach Twitter: @Brioneja
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designed for radical or
disruptive innovation, e.g.
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Spiral Approach Twitter: @Brioneja

28. Questions for the Panel/Audience
 Q1. What is the "customer job" (Clay Christensen sense)
that needs to be filled by innovation management software?
 Q2. Which employees are "right" for participating in the
innovation process?
 Q3. How do you find high potential ideas from a high
volumes of them?
 Q4. What are some models for engaging employees in a
process that falls outside their "day jobs"?
 Q5. Isn't this a popularity contest for ideas, and what
company would operate that way?
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29. Questions for the Panel/Audience
 Q6. What does it mean to "evaluate" an idea?
 Q7. How to say 'no' to an idea, and not discourage
future participation?
 Q8. What are some best practices for running an
employee innovation program?
 Q9. What about expanding beyond employees,
and bringing customers directly into the innovation
process?
 Q10. Where does a crowdsourced innovation
management platform fit
within the enterprise software ecosystem?
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Twitter: @Brioneja

30. Resources
 Making Open Innovation Work. Author: Stefan Lindegaard
 Open Services Innovation. Henry Chesbrough
 A Guide to Open Innovation and Crowdsourcing. Paul Sloane
 The Open Innovation Marketplace. A. Bingham and D.
Spradlin
 Open Innovation – Paradigm Shift or Program? September 21,
2009 by Suzanne Harrison
 Innovation Killers, 2008 - HBR http://hbr.org/product/innovation-killers-how-financial-
tools-destroy-you/an/R0801F-PDF-ENG?Ntt=innoation%2520killers
 The Market for Open Innovation – Frank T. Piller, K. Diener
 The Spiral Approach to Disruptive Innovation Management.
Jose A. Briones.
www.Brioneja.com
Twitter: @Brioneja

31. Contact Information
 Jose A. Briones, Ph.D.
 Brioneja@SpyroTek.com
 Twitter: @Brioneja
 www.Brioneja.com
www.Brioneja.com
Twitter: @Brioneja