Innovation, whether traditionally executed or open, is widely identified as a key ingredient in any business strategy, however not all organisations are successful in delivering real, leveraged value through innovation. Even after decades of public and corporate attention innovation still encounters internal silo thinking & political barriers. Now Open Innovation is identified as the next “big thing” in innovation, raising expectations of explosive business growth. How many companies are really ready, internally and externally, to delivering it? www.xpotential.co.uk

1. Creating and Connecting
Communities of Innovation
Steve Sowerby Dr Kevin McFarthing
XPotential Innovation Fixer
ESOMAR Innovation Detonation
Barcelona, 15 November 2010

2. Communities of Innovation
• Building a community of
innovation starts with mindset
• There are practical steps needed
to create communities
• The internal innovation community
needs to be created before moving
externally
• There are several different
external communities that can be
created

3. The Formula for Innovation Acceleration
Rate of innovation connectivity
between people
Degree of connectivity intensity of
community

4. The Formula for Innovation Acceleration
Intensify the community
By
Strengthening connections
With
A sense of common purpose
Supported by
Leadership
Process
People
Leading to
More innovation

5. Community
• Common purpose
• Clear and distinct identity
• Sense of belonging and contribution
• It’s how you feel
• It’s what you do

6. Building an internal
innovation community

7. It’s all about the brand

8. Case study example:
Beiersdorf
• Organisation focused on creating and delivering brand
equity
• Development of the centralised process trained across 1500
individuals
• Organisational changes to reflect innovation focused roles
and responsibilities
• Corporate challenge to focus on bigger, better, faster and
fewer innovations with supporting KPIs

9. Skills and competencies of the
“complete innovator”
• We can identify the characteristics and
behaviours of individuals and teams required for
becoming the “complete innovator”
• Assessment tool, Pathfinder, can enable
organisations to identify individuals and develop
team to maximise innovation

10. Characteristics of the complete innovator
Ch
g
in
an
er
ge
st
Fo
To be really innovative
requires an attitude and work
environment that fosters
innovation, and new ideas
that could improve the way
things are done.
G
en
er
at
ng
in
An innovative idea must be g
ivi
The guiding premise of The
Dr
embraced by the
organization before it can be Complete Innovator asserts
implemented. Anyone who that developing unique, clever,
Im tries to implement without imaginative and creative new
ideas is the starting point of
pl
s
“buy in” will only isolate
ea
em those whose support is vital. establishing change in an
Id
organisation.
en
ta
tio The complete process of
n innovative change requires the
ability to convince, persuade,
excite and motivate others to
embrace new ideas and to go
beyond our natural tendency to
seek the status quo.. t
W
in en
ni itm
ng m
om

11. Key success factors for the internal
community
• Obsessive focus on the consumer and the brand
• Leadership from the top cascaded through
leaders across the organisation
• Common language and process
• A deep understanding of the characteristics of a
‘complete innovator’
• A willingness to break the rules of the classical
organisational structure

12. Building an external
community

13. Innovation needs to change
From command and control,
vertically integrated, resource
controlling
TO
A sense of community with diverse
partnerships, seamlessly integrated
with the core company
USING
Networking, relationships,
structures, processes and trust

14. Brand communities
Company
Intermediaries Consumers
BRAND
Inventors Lead users
Suppliers

15. Brand communities
Company
Intermediaries Consumers
BRAND
Inventors Lead users
Suppliers

16. User Communities

17. LEGO® Mindstorms
• Programmable robotic and
mechanical version of LEGO
• Estimated 40,000 users (20k
“AFOLs”) spending ~$10k per
year
• Much of LEGO’s design is done
by their community, and the
MUP (Mindstorms User Panel)
• They are open source – they’re
not a software company

20. LEGO® Communities
• LEGO club • Brickjournal.com
– ~3 million members • MasterBuilders
– >8 million visits a
• LEGO-certified
month
professionals
– Average visit 28
minutes • AFOLs
• Lugnet.org • LEGO Ambassadors
• 1000steine.de • FirstLEGOLeague.org
• Brickshelf.com (MOCs) • LEGO learning
• Brickish.co.uk institute
• Brickmaster • Designbyme.lego.com
• BrickLink

21. Supplier communities

22. Building an external community
• WIN BALANCING
– If an Open Innovation project comes off,
everybody wins
– If it doesn’t, Clorox compensate the supplier
– There is always money on the table for the
supplier – so they come back to Clorox
• Clorox “HiveLive” site
– Crowdsourcing
– OI meets social networking
– Direct access to large company
– Indirect search for solutions
– Blog
22

23. Building an external community
23

24. Nestle
• “Sharing is winning” philosophy
• Nestle shares its future needs for all its business units
with innovation partners
• Work to a Master Joint Development Agreement
• Intellectual Property ownership principle
– Every physical solution is owned by the
competency-providing partner
– The smart applications are owned by the receiving
party (Nestle)
• >$200M from new business in 2009
24

25. Key learnings for supplier communities
• Key suppliers selected on basis of importance of
business to both companies
• Key information shared on both sides
• Everyone understands the reward
system at the start
―Nestle – “sharing is winning”
―Clorox – “win balancing”
• Relationships are worked at

26. Technology research
communities

27. External research communities
• Eindhoven High Tech Campus
• 1998 – Philips relocates all NL-based R&D to
Eindhoven
• 2003 – opens up the campus to other companies
• 2010 - 100 companies and 8000 researchers
“The hotspot for human-focused innovation”

28. So how?
Leadership, process, people

29. “We’ll look at ideas from
anywhere. Some come
from our competitors;
we see if they are doing
something new and see
if we can do it better.
We’re not proud.”
Set the target of
delivery – full stop.
Bart Becht, CEO
Bart Becht, CEO

30. “Inventors are evenly
distributed in the
population, and we're
as likely to find
invention in a garage
as in our labs.”
Set the goal of
delivering 50% of ideas
coming from outside
P&G.
A G Lafley, CEO
Bart Becht, CEO

31. Core processes
• Integration of external partners to internal
processes
• Market research
• Strategic Alliance processes
• Software
– From Microsoft Project to integrated systems
like PAM (Alliantist)
Idea
Gate Define needs Gate Prototype Gate Production
Analysis

32. People
• Technology Scouts need
– Experience
– Wide knowledge
– An engaging personality
– Empathy
– Street “savvy”
– Negotiation skills
– A sense of humour
– Courage
• Communities need communicators

33. People
• Unilever train Open Innovation
staff in 7 soft skills
– Intrapreneurial skills
– Relationship building
– Strategic influencing
– Quick study
– Tolerance for uncertainty
– Balanced optimism
– Passion

34. The Formula for Innovation Acceleration
Intensify the community
By
Strengthening connections
With
A sense of common purpose
Supported by
Leadership
Process
People
Leading to
More innovation

35. Ultimately –
Innovation

36. needs
minds

37. processes

38. and
Communities

39. Thank you!!

40. The Authors
Steve Sowerby:
An experienced Business Professional, Dr Kevin McFarthing:
Marketer, General Manager & Senior An innovation specialist with over
Consultant with over 30 years 25 years of senior executive
corporate and consultancy experience experience including his recent
across numerous categories including position as Head of Strategic
FMCG, pharmaceuticals, financial Alliances at Reckitt Benckiser where
services, luxury goods & food. An he led the development of RB’s
inspiring and articulate speaker, Steve open innovation portal. An
has recently presented to professional inspiring global expert on Open
audiences around the world on the Innovation, Kevin has presented on
topic of “Building Brands in Turbulent the topic in Germany, USA and UK
Times”

41. Who are XPotential?
XPotential is a brand focused strategy consultancy
that helps to align individuals, functions and
organisations throughout the world to create and
deliver Brand Value.
We work with some of the world’s biggest brands to deliver
outstanding results. We orientate individuals and teams in
the organisations to focus their responsibilities to deliver
value to their most important asset - their brand. We are
proud to have worked with over 30 companies in over 50
countries and touched tens of thousands of individuals,
delivering some of their most impressive business results.
We do this through working closely with the leadership of
organisations to develop Brand Centric Vision and Strategy
through a deep understand of the challenges and
opportunities for the Brands and the Company, the Brand
Vision and the key audience for change.
We then design and implement a programme of brand
centric change including communication, engagement,
training and follow up. We have worked both cross
functionally and also through specific areas including sales,
supply chain, innovation, marketing, R&D, finance and HR.
www.xpotential.co.uk

42. What is Innovation Fixer?
Innovation Fixer improves the output and impact of your
innovation. Starting with an Innovation Checkup using the
Innovation Fixer Wheel© as the framework, we deliver perceptive
recommendations and implementation of real improvements.
WORKING WITH INNOVATION FIXER
We are passionate about innovation and what it can do for
business. That’s why we want to help. We will deliver a perceptive
assessment of what you can change to improve the growth
delivered by innovation, with clear recommendations for action.
You’ll find us easy and straightforward to deal with. We won’t
disappear too early (unless you want us to, of course). We’ll be
there to guide and mentor you through the implementation stages
of the project, but at the same time ensure that you implement
and own any changes you make.
WHY INNOVATION FIXER?
Innovation Fixer is led by Dr Kevin McFarthing based on many
years of experience at the heart of innovation, the last 17 years
spent with Reckitt Benckiser (RB). RB have an outstanding track
record in innovation, and are in the top 20 companies of the UK
FTSE 100.
Kevin has leading edge senior experience in Open Innovation,
Strategic Alliances and R&D. He has led product development in
many areas, including consumer healthcare, household products,
prescription medicines, diagnostics and molecular biology.
His passion for innovation includes exploiting it no matter what
the source, using resources efficiently and delivering fantastic
products and services.
Innovation Fixer also works closely with experienced consultants
and associate companies with expertise in key areas.
www.innovationfixer.com