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Presentation by Cesar Castro, DiscoveryCast CEO, on open innovation.
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Open Innovation and the Future of Organizations
Cesar Castro
Founder and CEO
DiscoveryCast, Inc. ©Copyright2010DiscoveryCast,Inc.allrightsreserved
Topics
2
1‐OpenInnova,onStrategies
2‐PreparingforTheNewInnova,on
Paradigm
3‐Innova,oninanIncreasinglyCollabora,veEnvironment
4‐ManagingConfiden,ality/IP
5‐GeIngStarted:DevelopingAn
Innova,onStrategy
6‐Examples/CaseStudies
8‐Brainstorming/Idea,on
Topics
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1980’s
1990’s
2000’s
Today
My Background
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4
Innovation is…….
(to be filled in later)
©Copyright2010DiscoveryCast,Inc.allrightsreserved
5
Open Innovation is……
(to be filled in later)
©Copyright2010DiscoveryCast,Inc.allrightsreserved
6
IBM CEO Survey - March 2006
What Has Changed In The Innovation Landscape?
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Innovation Is Everywhere
Seeingtheunseenor,“…theeurekamoment…”
Op,mizingthevaluecrea,onopportunity
Scien,ficDiscovery TechnologicalInnova,on
NewMarketInsight Market/RetailInnova,on
NewProduc,on/ProcessInsight SupplyChainInnova,on
NewBusiness/FinancialInsight BusinessModelInnova,on
NewHRPolicies HumanCapitalManagementInnova,on
NewSocial/EcologicalInsight SocialInnova,on
Regulatory/Legisla,veChange Business/Marke,ngInnova,on
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8
Closed Innovation
Model
Open Innovation
Model
Market Revenue
Market Revenue plus New Revenue
What is Open Innovation?
(traditional definition)
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9
Large firms/ social networks
Academia/SME’s
Individuals/consultants
individual firm
innova6ongroup
INTERNAL INNOVATION
customerscompe6tors
suppliers
re6rees
New Explanation of Open Innovation
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10
individual firm
innova6ongroup
customerscompe6tors
suppliers
re6reesLarge firms/
social networks
Academia/SME’s
Individuals/consultants
OpenInnova*onBeginsInternally,ThenGoesExternal
INTERNAL INNOVATION AND EXTERNAL INNOVATION
New Explanation of Open Innovation
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11
Companieshave…..
loweredtheircostofinnovaAon
broughtnewideastooldproblems
generatednewrevenuestreams
acceleratedtherateofinnovaAon
Why Is Open Innovation Important?
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Open Innovation Strategies
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13
Open Innovation Requires A Portfolio Approach
Internal External
Indirect Direct
Social
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14
Characteristics of An Open Innovation Approach
Distributed
Rapid Prototyping of Ideas
Shared Financial
Risk
Anyone Can Contribute
Share and Co-create IP
Diversity
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16
17
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19
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How To Prepare For The New Innovation Paradigm
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Principles Of The New Innovation Model
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Develop More Transparency
Engage with networks
Embrace community
Competitors can be collaborators
Discourage the “Not Invented Here” syndrome
Engage with failure
Maintain a “memory” bank of successes/failures
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FailCon
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Key Skills For Individuals
24
Learn to frame the question properly
Think of yourself as a solution finder
Learn to collaborate and share
Stay informed with filtered information
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Key Skills For Companies
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Prioritize and incentivize innovation
Move to a higher risk profile
Adapt the company structure
Reinvent company culture
Promote experimentation and weather change
Innovation in an Increasingly Collaborative Environment
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27
Engagement in social networks
Source: Forrester Research
The Engagement
Ladder
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Managing Confidentiality / Intellectual Property
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Confidentiality/Intellectual Property
29
RULE#1
Noteverychallenge/technologyneedissuitableforexternalinnovaAon
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Confidentiality/Intellectual Property
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LookforopportuniAestosharenon‐confidenAalinformaAonfirst
FramingthequesAoncanalsohelpmanageconfidenAality
Risk‐takingneedstobehigher
80/20rule(80%ofofcorporateIPisnotuAlized)
IPownershipisshiWing;smallbusinessesareaccounAngformoreandmoreoftheinnovaAonpie(patents,technology,etc)
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Getting Started
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32
Getting Started
The innovation dial
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Creative Bazaar Jam Session
Orchestra MOD Station
INN
OVA
TIO
N T
YPE
NETWORK LEADER central diffuse
emer
gent
de
fined
Source: The Global Brain, 2008
4 Strategies to Leverage External Networks
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MIT Open CourseWare ✖
Nokia ✖
Kraft Innovation Portal ✖
My Starbucks Idea ✖
Clorox ✖
Intuit ✖
Dell Ideastorm ✖
Unilever ✖
Android OS ✖
Conclusion
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44
Innovation is…….
A process by which new ideas fuel developments in products or services that
capture value in the marketplace.
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45
Open Innovation is…….
A mindset, not a type or category of innovation
A means of production for innovation
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Key Takeaways
46
OpenInnovaAonisallaboutculturechange
PorZolioapproachisimportant
SocialnetworksarepartofinnovaAon
FramingthequesAonisacriAcalskill
ConfidenAality/IntellectualPropertyCANbemanaged
Diversityofthenetworkisimportant
©Copyright2010DiscoveryCast,Inc.allrightsreserved
Bibliography
47
TheOpenInnova6onRevolu6on,StefanLindegaard,Wiley,2010.
TheGlobalBrain,SaAshNambisanandMohanbirSawhney,WhartonSchoolPublishing,2008.
OpenBusinessModels,HenryChesbrough,HarvardBus.SchoolPress,2006.
Crowdsourcing,JeffHowe,RandomHouse,2008.
OpenInnova6on:TheNewImpera6veforCrea6ngandProfi6ngfromTechnology,HenryChesbrough,HBSPress,2003.
©Copyright2010DiscoveryCast,Inc.allrightsreserved
Open Innovation and the Future of Organizations
Cesar Castro
Founder and CEO
DiscoveryCast, Inc. ©Copyright2010DiscoveryCast,Inc.allrightsreserved