Open Innovation - Mandag MorgenOpen Innovation - Case Studies from Denmark represents Denmark’s case study contribution to the OECD project on Globalisation and Open Innovation.The

Working paper Compiled by Monday Morning Ltd. for

Danish Ministry of Science, Technology and InnovationAs a contribution to the

OECD Project on Globalisation and Open Innovation

OpenInnovation

Case studies from Denmark

Mondaymorning 3

Open Innovation – Case studies from Denmark

Table of contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

I Innovation Cup data on Open Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

II Five case studies from Denmark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Gabriel Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Danisco Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Quilts of Denmark Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Exiqon Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21IBM Denmark Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

III Perspectives on Open Innovation in Denmark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Open Innovation - Case Studies from Denmark represents

Denmark’s case study contribution to the OECD project

on Globalisation and Open Innovation. The objective of

the paper is to extract some of the key lessons learned

from five Danish companies with extensive experience in

open innovation. National case studies like the present

have been coordinated by OECD member states to com-

plement desk research and literature studies aiming to

identify how globalisation changes the innovation strate-

gies of companies.

The five cases have been selected as examples of best prac-

tise in innovation management. They have been selected

to cover a wide variety of experience and size. The small-

est company in the study has 70 staff members, the largest

7,400 staff members in Denmark. Four out of five cases

are companies which have participated and done well in

the national competition Innovation Cup in 2007. Three

of the four companies won special prizes in various cate-

gories.

Innovation Cup was launched as a collaborative project by

the Innovation Council of Denmark in 2005 in order to

highlight the importance of innovation management at

national and company level - and to learn from the experi-

ence of the best companies. Innovation Cup was carried

out again in 2007. The fifth case study, IBM Denmark,

represents the case of outstanding open innovation activ-

ities in a multinational company. Hence, all five cases have

been selected for their excellent work as examples of best

practise in innovation management. The report falls into

three main parts:

• DATA: A presentation of quantitative Innovation Cup

data on open innovation

• CASES: Five qualitative case studies of advantages and

challenges in working with open innovation as experi-

enced by five Danish companies

• PERSPECTIVES: A brief discussion of some of the per-

spectives arising from the case studies

The methodology used has involved a combination of

desk study of quantitative data from the Innovation Cup

surveys and individual interviews with executives and

innovation practitioners from the five companies

involved. The interview guide has been developed on the

basis of the innovation management model Seven Circles

of Innovation, the Innovation Cup questionnaire and

OECD documents. The overall approach of the study as

well as innovation terminology like Not-Invented-HereSyndrome and Not-Sold-Here Virus are inspired by the

theoretical work of Henry Chesbrough.

Monday Morning Ltd. has carried out the case studies on

behalf of the Danish Ministry of Science, Technology and

Innovation. The Danish Council for Technology and

Innovation has prepared the action plan

“InnovationDenmark 2007-2010” as a contribution to the

renewal of Denmark’s innovation policy. The most impor-

tant goals of the action plan is to ensure that Danish enter-

prises become more and continuously innovative and to

promote knowledge dissemination and interaction

between research and industry. The Council attaches great

importance to international cooperation. The Danish con-

tribution to the OECD project on globalisation and Open

Innovation is an integral part of the new action plan for

more innovation.

Given the scope of the study, this paper can only provide a

humble contribution to our emerging understanding of

the intricate world of open innovation. However, it is the

authors’ hope that the combination of Innovation Cup

data and the qualitative case interviews will inspire and

add colour to the joint learning process in a field full of

promise.

Copenhagen, June 2007

Mondaymorning4


Introduction

This paper combines quantitative data from a Danish

innovation management competition entitled Innovation

Cup with five case studies of best practise companies with

advanced experience in the field of open innovation. The

objective of the study is to extract some of the key lessons

learned and provide case examples of perceived advan-

tages and challenges when it comes to the overall

approach to open innovation, partner identification and

future prospects. Overall, the findings can be summarised

in three main points: a) Positive attitudes at company

level, b) Rhetoric ahead of practise and c) Small and young

companies as front runners in a fast evolving field

As part of Innovation Cup, more than 1,300 employees

from more than 160 private and public companies have

filled out a comprehensive questionnaire making up the

complete body of Innovation Cup data. The quantitative

data shows that rhetoric is ahead of practise when it

comes to innovation management and open innovation.

The vast majority of respondents knows who their cus-

tomers are and how their input contributes to value cre-

ation for the user. However, specific methodology con-

cerning the users and the more advanced methods for

user-driven innovation seem to be only moderately preva-

lent. There is great versatility in the methods applied and

private companies are at a more advanced stage than pub-

lic sector participants.

The quantitative data is supplemented by qualitative

insights into the relatively advanced open innovation

experience by five Danish companies. This part of the

report is based on interviews with executives and innova-

tion practitioners from the following best practise compa-

nies:

• GABRIEL LTD.

Networking and open innovation is key to Gabriel’s

business strategy - Concern over IPR

• DANISCO LTD.

Varied partnerships have been established over some

time - Careful selection of partners

• QUILTS OF DENMARK LTD.

Increasingly involved in open innovation involving

NASA - Importance of a fair process

• IBM DENMARK LTD.

Long history of open innovation with wide variety of

partners - not just front-end innovation

• EXIQON LTD.

Research background of staff enhances extensive - if

selective - openness in innovation

The companies studied have different starting points for

their work with open innovation and differ significantly in

size and age which stand out as the two main defining

parameters. Smaller and younger companies tend not to

question the use of external collaboration in their innova-

tion practise. Larger and older companies, by contrast,

tend to look inside their own company before they look

out – and to be more systematic when they do look out.

Based on the present case study, proactive networking

stands out as a characterising feature of best practise in

the field. With the exception of one company, the case

studies indicate a stronger emphasis on external involve-

ment in the front end of the innovation process rather

than in the development and implementation phases. The

case studies provide a qualitative insight into the innova-

tion process at company level and show interesting per-

spectives on open innovation in a Danish context. It is dif-

ficult to draw general conclusions on open innovation on

the basis of five case studies. The paper suggests learning

from mistakes and open innovation after the front end of

the innovation process as possible areas of further inves-

tigation.

Mondaymorning 5


Summary

Rhetoric seems to be ahead of practise. This is a key con-

clusion from Innovation Cup. Participating companies in

2006 as well as 2007 have an obvious interest in innova-

tion management but only 37 per cent indicate that they

have a clear innovation strategy. Amongst the ten per cent

best performing participants in Innovation Cup the share

of respondents with a clear innovation strategy totals 64

per cent. By comparison, 70 per cent have a formalised

organisational strategy. Only 21 per cent confirm that

their innovation strategy has been communicated clearly

in the company and to external partners.

On the basis of quantitative data from a web-based ques-

tionnaire combined with qualitative data from assessment

visits to the top performing companies Innovation Cup

identifies and celebrates the most innovative companies

in Denmark. The questionnaire is based on the manage-

ment model Seven Circles of Innovation described in

more detail in Annex B of this report. Innovation Cup

Data covers innovation management in the broad sense

but this section of the report presents quantitative data

regarding open innovation from Innovation Cup.

Innovation Cup 2007 data is focused on user-driven inno-

vation – only one of a number of possible variants of open

innovation – but also includes information on the preva-

lence of other types of open innovation.

Innovation Cup was launched in 2005 by Innovation

Council of Denmark in a collaborative effort with Monday

Morning Ltd. as secretariat and coordinator. Innovation

Cup was carried out for the second time in 2007 and pro-

vides an extensive set of data in the field of innovation

management where rhetoric tends to be more advanced

than factual knowledge. More than 1,300 employees from

more than 160 private and public companies have filled

out a comprehensive questionnaire. General findings of

Innovation Cup include apparent linkages between inno-

vation management success and a learning culture, effi-

cient systems for knowledge sharing and strong market

orientation and are described in the 2007 Innovation Cup

report. The following section details findings specifically

related to open and/or user-driven innovation.

Data on Open InnovationUser-driven innovation was chosen as the Topic of the

Year for Innovation Cup 2007 due to notable interest

amongst last year’s participants. Consequently, approxi-

mately 50 questions were developed for the questionnaire

Mondaymorning6


I Innovation Cup Data on Open Innovation

MM | Strategy and innovation strategy

0

10

20

30

40

50

60

70

80

The company clearly communicatesthe innovation strategy

both internally and externally

The company has a clear innovation

strategy

Corporate strategy is widely known and understood

by all employees

The company has anexplicit corporate strategy

that is written down

I agree to a high degree or always (per cent)

All participants

Public sector organisations

Private companies

on advantages and challenges of working with user-driv-

en approaches in the various stages of the innovation

process. In addition to putting innovation management

on top of the national agenda by celebrating the most

innovative companies as winners, Innovation Cup repre-

sents a learning process for all participants. Revision of

the questionnaire from the first to the second year is a

reflection of the work-in-progress character of the effort.

The EU Commission has welcomed Innovation Cup as the

first European attempt to systematically measure the abil-

ity to create innovation at company level. In other words,

Innovation Cup represents pioneering work and the con-

cept is constantly developed and improved.

Mondaymorning 7


MM | External partners in the innovation process

“We collaborate closely with the following external partners on problem solving in the following phases of innovation management” I agree to a high degree or always (per cent)

IDEA GENERATION

0

10

20

30

40

50

60

70

Present customers

Potential customers

Competitors Suppliers Retailers Complemen-tary business

partners

External production

Publicly funded

research institutions

Others (government

agencies, civil society)


TESTING

0

10

20

30

40

50

60

70

Present customers

Potential customers


partners

External production

Publicly funded


Others (government



LAUNCH AND IMPLEMENTATION

0

10

20

30

40

50

60

70

Present customers

Potential customers


partners

External production

Publicly funded


Others (government


All participants


Private companies

The impression of rhetoric ahead of practise is confirmed

when looking at participating companies’ external co-

operation. When asked ‘Are you interested in maintaining

long term relations with customers, suppliers, retailers

and other complementary partners, 96 per cent respond

positively. The share of positive responses is lower when

asked about specific activities. Innovation Cup data shows

that customers seem to be the preferred external partners

when it comes to solving important problems in the vari-

ous phases of innovation management. Customers are

followed by publicly funded research institutions and sup-

pliers as preferred partners. There is a clear trend of

increasing external collaboration as companies move

from idea generation and testing into launch and imple-

mentation. Even the modest extend of collaboration with

competitors increases slightly in launch and implementa-

tion as reflected in the table on the previous page.

The table below lists positive responses to a number of

possible approaches to the maintenance of long term rela-

tions with external partners. Again, the general statement

of encouragement to all staff members to remain open to

input from external sources scores remarkably high with

support for 81 per cent for respondents. By contrast,

financial incentives for staff involved in external collabo-

ration are very modest and reported by only five per cent of

respondents.

Two-thirds of the respondents know who their customers

are and how their input contributes to value creation for

the user. Information on user satisfaction is circulated at

all levels in the organisation in 44 per cent of participating

companies.

When it comes to gathering knowledge of and co-operat-

ing with the users and the customers, the level is lower. 47

per cent of the participants of Innovation Cup systemati-

cally gather knowledge of current customers and 42 per

cent co-operate with them on solving important problem

areas.

The gathering of information of and the co-operation

with potential customers and users are with 33 per cent

and 28 per cent respectively lower in the participating

organisations.

The private companies are notably more committed to

gathering information and co-operating with customers

than the public sector participants.

What specifically do Danish companies and organisations

do in their attempt to create user-driven innovation? This

subject is the theme of Innovation Cup 2007 and it has

been asked which methods are actually applied.

The results show that the methodology concerning the

users and the more advanced methods for user-driven

innovation only recently have gained ground in the Danish

organisations. There is great versatility in the methods

applied. The results also show that private companies are

at a far more advanced stage than the public. In most

cases, twice as many of the participants from private com-

Mondaymorning8


MM | External collaboration and network competencies

0

10

20

30

40

50

60

70

80All participants


Private companies

Staff members are specifically assigned to

manage external collaboration

Management of external contacts is

part of job descriptions

Staff responsible for external

collaboration has sufficient resources

Financial incentives are in place for

staff responsible for external

collaboration

All staff is encouraged to be

open to inputs from external sources

Participation in external networks is appreciated by

the company


panies report that they apply the methods than is the case

with the public participants. The low share among public

sector participants is striking considering what a major

factor user-driven innovation is in the innovation strate-

gies of the public sector participants.

The questions from this year’s theme have not affected the

total score. However, the study clearly shows that the win-

ners of Innovation Cup are more frequent users of the

methods for user-driven innovation than the average.

Eight of the ten organisations, who score the highest con-

cerning user-driven innovation, are on the top five lists

among either the large companies, the small companies

or the public sector participants.

At the same time, a larger part of the top ten per cent

group confirm that the methods for user-driven innova-

tion are prevalent in their organisation than is the case for

the average. This applies for all of the questions.

The participating organisations all consider that they are

well ahead when it comes to users’ and customers’ access

to sharing new ideas. Almost 70 per cent of the partici-

pants think that the customers to a great extent or always

have this opportunity. But only three of ten private compa-

nies and one of ten public sector participants make sys-

tematic evaluations when the ideas have been received.

Also few of the companies make an effort to promote the

ideas from the users and customers. In the study, there is

Mondaymorning 9


MM | Data gathering and problem solving

0

10

20

30

40

50

60

70

80

We collaborate closely on important problems with potential customers

We collaborate closely on important problems with present customers

We gather systematic data on

potential customers

We gather systematic data on

present customers


All participants


Private companies

MM | Methods to extract ideas from customers

We motivate our customers to share

ideas by offering them financial

incentives for good ideas

We motivate customers to share ideas by

offering the opportunity to develop their ideas

We have campaigns at regular intervals

to extract ides from customers

We have a procedure to ensure systematic

evaluation of customer ideas

Our customers have easy access to

sharing their ideas with us


0

10

20

30

40

50

60

70

80 All participants


Private companies

asked about a total of six different ways to motivate cus-

tomers to contribute ideas. None of the methods are espe-

cially prevalent. Generally speaking, no one awards their

customers financially for contributing good ideas, almost

one-fourth have campaign ideas and slightly more offer

their customers the opportunity to co-operate further on

the ideas, as the tables shows. The general pattern that the

most advanced methods are not especially prevalent is

made clear once again when asked about methods such as

lead user involvement and user communities. Only a small

number of the participants use these methods. As shown

in the table on the previous page, private companies are

generally further ahead than the public sector participants

on this specific point.

Scanning of customer complaints for innovations is more

prevalent. About 50 per cent regularly check their cus-

tomer complaints for ideas for new innovation projects.

Customer workshops such as focus groups are prevalent

among almost 40 per cent of the participants, while a

method such as for instance user observations is still very

rare.

Obstacles for involving the usersIn connection with the topic of the year, participants have

been asked if the organisations experience obstacles for

user-driven innovation and customer involvement. The

answers show that only very few respondents experience

notable obstacles in that area. Of fifteen questions it is the

area intellectual property rights which is estimated to be

the biggest challenge in user-driven innovation. Still, only

19 per cent of the respondents from the private companies

point out that their wish for exclusivity on intellectual

rights to a great extent or always is an obstacle for user-

driven innovation. A part of the explanation for the expe-

rience of few obstacles can simply be that the organisa-

tions yet lack extensive experience with the more

advanced methods for user-driven innovation.

Mondaymorning10


MM | Methods of user driven innovation


0

10

20

30

40

50

60

We scan our customers to identify lead users

We support user communities by

providing information or financial incentives

We scan customer complaints

We conduct customer work shops and

focus groups

We observe users

All participants


Private companies

Mondaymorning 11


This chapter presents case studies of five Danish compa-

nies and their approach to open innovation. Four compa-

nies - Gabriel Ltd., Danisco Ltd., Quilts of Denmark Ltd.

and Exiqon Ltd. - have been selected for this case study

because the Innovation Cup competition has identified

them amongst the most innovative companies in

Denmark in 2007. Quantitative Innovation Cup analysis

as well as assessment visits to the companies indicate that

the companies have an interesting approach to open inno-

vation with early mover experience meriting further stud-

ies. IBM Denmark did not participate in Innovation Cup

2007 but has been selected for this case study to get an

additional Danish angle on IBM’s well-published work

with open innovation and to look at their far-sighted use

of the internet in particular.

The case studies are based on desk studies and interviews

with a key person in each company selected on the basis of

his or her experience with open innovation. Appendix A

provides a list of interviewees.

Each case study is introduced by a summary of key find-

ings. The findings of the individual case studies are struc-

tured as follows: 1. Short presentation of the company. 2.

Overall approaches to innovation. 3. Identification of

partners. 4. Advantages of open innovation. 5. Challenges

of open innovation. 6. Open innovation in the future. A

specific examples of innovation in practise is included in

each case description in a box.

II Five case studies from Denmark

Gabriel Ltd.

• Networking and open innovation gives Gabriel a bettergearing of their investments

• Introduction of balanced scorecard has made advan-tages of open innovation visible

• Car manufacturing technologies have been adopted byGabriel and partners through open innovation

• Open innovation has turned former competitors intopartners

• Some concerns over intellectual property rights, espe-cially with regards to China

Short presentation of company Gabriel situated in Aalborg Denmark was founded in 1851

and is one of Europe’s leading suppliers of furniture tex-

tiles. The company has 122 employees and a turnover in

2006 of 32 million euro. In 2007 Gabriel was identified as

the most innovative company in Denmark by Innovation

Cup.

Overall approach to open innovationGabriel sees open innovation as part of the company’s

strategic development through networks. It is a natural

thing for Gabriel to practise open innovation, as they are

not specialists in everything. Through open innovation

they get to co-operate with the best in their business, and

they get another gearing in their investments, as they can-

not implement the same projects alone in the same way as

in a network. Through open innovation Gabriel takes

advantage of the expertise that their partners have built

through many years, which they offer Gabriel when they

build a network around a given product that both parties

find interesting. On the incremental part Gabriel has 35

open innovation projects at the moment, and on the radi-

cal innovation side they have between three and five.

Gabriel has been working with open innovation for many

years. But they feel that things fell into place, when they

introduced balanced scorecard as a management tool in

the company. The introduction of balanced scorecard

helped Gabriel to execute its strategies, and the company

got a clear picture of what their efforts gave in return. The

introduction of balanced scorecard forced Gabriel to

become considerably more process-oriented. Now

Gabriel is a fully process-oriented company and it is clear

to Gabriel that the company must concentrate on four

value-creating core processes. In that way, the introduc-

tion of balanced scorecard has had an effect on the work

with open innovation, as it is more obvious for Gabriel

where innovation and value is created. Services from sup-

port processes are traded internally and externally to mar-

ket price to get the true value and quality of their services

compared with what they can buy it for outside the com-

pany.

It is second nature for Gabriel to participate in diverse net-

works. All areas of the company participate in networks,

just as it is a natural thing that groups are invited to the

company. This contact with external partners generates a

lot of ideas to Gabriel and vice-versa. But as it is hard to

say when exactly an idea arises, as this often happens in

interaction with their partners in organised idea-generat-

ing processes, it is hard to say if Gabriel gives away or

receives more ideas.

Gabriel acquires new external technologies when a net-

work partner is interested in making use of a technology.

In that way they gear their own development costs by

being open and achieve a benefit.

Globalisation has meant a deliberate strategic focus on

innovation for Gabriel. Gabriel has gone from being a tra-

ditional production company to being a virtual production

company where logistics is a core process instead. Earlier

Gabriel delivered to Western Europe, now a large part

goes to low-price countries and therefore they need to be

in low-price countries with their production. Gabriel is

now situated in China (2003), but they are very careful

about being open because of IPR concerns and they do not

develop in China yet.

Identification of partnersWhen Gabriel engages in co-operation with others on

innovation activities, they want to make sure that they and

their partners have the right competences in view of what

is being developed, and they also want to make sure that

they have a mutual clear understanding of what is meant

by open innovation. They do not just open their door for

everything and everybody, and when they engage in open

innovation, they always sign a confidentiality agreement

with their partners to be able to work freely.

Gabriel has always had quite an open approach to the out-

side world which also includes their competitors. They

have been evaluating their core concepts from a strategic

point of view for a number of years. They have asked the

competitors what their core processes and strengths are

and in some cases maybe drawn the value chain. By asking

themselves what really justifies them, they have often

found out that they did not have to be competitors, but

they could actually improve products together.

Mondaymorning12


Gabriel has mainly been working on incremental innova-

tion and Gabriel is used to developing together with their

customers around their wishes along with other partners.

For many years they have been developing their products

up against the market with approximately 60 large inter-

national furniture producers who are their strategic cos-

tumers, but they also develop with substitute producers.

Gabriel has often undertaken the task of finding a pro-

ducer somewhere in the world, and they have often ended

up with someone who does not have a metier in the furni-

ture business.

In the area of radical innovation, which is a relatively new

approach for Gabriel, they often work with Danish univer-

sities on organisation and innovation. It is especially after

their collaboration with the large European development

company Pera that they have begun working in other areas

than they have done traditionally. However, the areas are

still part of their value chain just as the projects are within

areas that will solve problems or add value for their col-

laborators. At the moment they have three radical devel-

opment projects in the pipeline. In this kind of open inno-

vation new technologies are often very important, but

Gabriel was not aware of all the relevant technologies

available. Pera has one of Europe’s most extensive data-

bases regarding technologies and they are also well

known in these networks. They have daily contact with

i.net that consists of 25.000 scientists in Europe and has a

reputation that Gabriel does not have so they use Pera as

spearhead. On the three radical projects Gabriel will

receive the IP rights. Pera has had a special interest in

Gabriel because of the way that they are organised by

processes, and Pera will move into Gabriel’s new innova-

tion centre and collaborate with Gabriel on their new

business unit called InnovationMaster which is aiming at

Gabriel’s value chain.

Advantages of open innovationGabriel is convinced that the work with Open Innovation

has had a positive influence on their development costs.

They find that the right co-operating partners have a clear

gearing in Gabriel’s development costs. Gabriel has actu-

ally evaluated on this together with Pera. If three percent

of the turnover is used on development and they do not

use open innovation they probably get an effect around

three percent. But if they use the same three percent in

open innovation Gabriel is convinced that they will end up

with an effect that is the double. If you include significant

EU funding you get an additional effect because it requires

open innovation and you get an output on 13-14 per cent if

you invest three per cent of your turnover.

On the other hand, Gabriel has not experienced that the

speed of development has been shortened, rather the

reverse, but the result has still been considerably better.

Mondaymorning 13


Case: Introducing technologies from thecar industry to the furniture industry

Throughout the years Gabriel has often been inspired bythe car business. For some reason the car businesshas been more specific about what is expected of aseat compared with the other areas that Gabriel is invol-ved in. Gabriel has only been involved in the car busi-ness with some special seats. But car seats have formany years been more innovative-looking than furnitureseats and even flight seats. Gabriel has also transfer-red production processes from the car sector. In a closecorporation with a furniture company called HAY, theyhave introduced a fabric electro-welding technology tothe furniture industry that for example is used by Fiat.The special method in which the fabric and the filler arelaminated rather than sewn together provides a majorreduction in production costs.

Gabriel also engages in open innovation with an Italianpartner who delivers to the car industry and who is alsoa competitor for Gabriel in some niche areas. The com-petition does not play a role as they can lift much morevalue together than they miss by competing againsteach other. This collaboration develops constantly.Gabriel finds that the Italians have a distinct sense foropen innovation. Gabriel has another Italian collabora-tor that has also been a distinct competitor, but nowGabriel has taken over their sales functions and at thesame time Gabriel’s development people run in and outof their door, because the Italians are so keen on openinnovation.

So far, it has primarily been the customers who Gabrielhas been developing their products with, but they alsodevelop with substitute producers who can also think ofa solution in the development of a new work chair. Thepartner could be someone who has at special compe-tency in furniture foam and who can easily satisfy therequirements by law that goes along with Gabriel’s fur-niture textiles and the manufacturer’s wooden or steelconstructions. In the case of the foam they found a typeof foam that was usually not used in traditional furnitu-re business. Gabriel has often undertaken the task offinding a producer somewhere in the world, and theyhave often ended up with someone who does not havea metier in the furniture business.

Challenges of open innovationThe biggest challenge in open innovation is to make sure

that the partners have adjusted their expectations. Related

to other cultures, and even similar cultures, one might

assume, that everybody has the same expectations, but

this can not be taken for granted. Gabriel does a lot to

make sure that the partners know each other’s positions.

Gabriel has not had negative experiences with open inno-

vation. Gabriel cannot think of legislation or other exter-

nal factors that have complicated the work with open

innovation. But if Gabriel must drive through the radical

projects, they readily admit they depend on large EU

grants.

Gabriel has not experienced complications with interme-

diaries spinning in and out of the company. By contrast

the employees find it enjoyable that there are new people

in the staff cantina every day. As it is a part of Gabriel’s

culture to look for help and ideas from the outside, the

company does not experience the Not-Invented-Here syn-

drome or the Not-Sold-Here-Virus, although unused ideas

that are developed by Gabriel often are handed over to

other companies.

Open innovation in the futureGabriel will also work with open innovation in the future.

Open innovation is the model for the way that Gabriel

develops and essentially conditions the co-operation with

Pera.

Gabriel is not using the internet in their work with open

innovation yet, but they can see the advantages and possi-

bilities. They consider it very likely that they will use the

internet more in the future. Currently, Gabriel gets a lot of

approaches from prospective partners, and the fact that

they have taken part in Innovation Cup has given them a

number of contacts that they did not get before.

Mondaymorning14


Danisco Ltd.

• Open innovation requires an externally oriented organ-isation that can respond quickly and systematically toinputs from partners

• Phthalates substitution technology is an example ofNGO involvement in vision-creation in the front end ofinnovation enabling Danisco to discover trends early

• Untraditional partners like chefs inspire Daniscoemployees

• Concerns on IPR leads to careful selection of openinnovation partners

Short presentation of companyDanisco’s history reaches back to 1872 but in 1989 three

companies merged under the name of Danisco. Today,

Danisco is one of the world’s leading producers of ingre-

dients for food and other consumer products. The com-

pany has around 1,500 employees in Denmark and a total

of more than 10,500 employees in some 46 countries. The

revenue in 2005/06 was 2.8 billion euro. In 2007 Danisco

was awarded a second place in Innovation Cup and

received the special price for user-driven innovation for its

approaches and methods on user-driven innovation.

Overall approachDanisco sees open innovation as a close collaboration

with other external partner i.e. NGO’s, customers, con-

sumers or other people that may have an input on the

future of their company. They consider it extremely

important to have an open eye towards the outside world.

A large portion of Danisco’s development time is on incre-

mental innovation and how they can improve their prod-

ucts. This often happens in collaboration with their cus-

tomers. Danisco does not only sell a bag of ingredients to

their customers, but they also include services. They help

their customers optimize recipes just as they help them

with their processes in bread or ice cream production. If

there are problems in the process, they help their cus-

tomers identify the problem and resolve it. This is how

they differ from their competitors, and this is what they

live off. They have done this for the last 30 years, but to a

higher extent.

The main approach at innovation at Danisco is that they

see themselves as a service business. They live of selling

physical products, but if they do not offer service it would

only be a question regarding price, whereas now they can

offer more value through their knowledge on food ingre-

dients and food production. In that way, Danisco involves

their customers in the development and they get new

ideas and knowledge from the meetings. Helping others

in the field gives them inspiration so this interaction is

important for development.

Danisco finds that open innovation requires an organisa-

tion that is open towards input from the outside, and an

organisation that can respond quickly on these inputs. It

also requires a trusty organisation where you do not have

to ask too much, but a management that trusts their

employees do what is important for the company. The

management must give the employees the possibility to

make decisions. The scopes and the vision of the compa-

ny must be clear. If their project is inside this, employees

do not have to ask anyone else.

Danisco experiences that collaboration with external par-

ties can occur everywhere, and the company needs to be

open to this. In this regard, it is very important for

Danisco that their employees get around and that they try

to identify new ideas. But it can be hard to bring the ideas

home when the focus mainly is on incremental innovation

and demands for efficiency and optimizing processes. But

the balance between efficiency and new business is in

focus, and Danisco is aware that they need to look at both

at the same time, so it is important to create an organisa-

tion that makes this possible. Therefore, they have

changed the organisation. Earlier they had an innovation

department that covered the entire organisation and all

divisions at the same time, but now every division has its

own product development and process development

department. The division of the departments have made it

clear what is in between the departments, and who is

responsible. The Danisco committee still meets regarding

development across the divisions.

The internet makes it possible to get in touch with far

more people, but Danisco has not taken full advantage of

that fact yet. They have got a website where one can ask

questions regarding ingredients, but it is not a site where

one captures challenges in the world.

It is hard to measure the balance between ideas from the

“outside-in” process and the “inside-out” process as it is

hard to measure how many people are inspired in the col-

laboration with Danisco. On the other hand, Danisco does

not deliberately trout for business with their unused ideas.

But it often happens as a result of informal discussions

when people are inspired talking to Danisco employees.

Mondaymorning 15


Danisco occasionally buys external technologies. They

know that they are not world champions in everything. It

is also important not to start with Adam and Eve and

develop everything from scratch. Danisco buys technolo-

gies and companies that appear strategically interesting.

But Danisco does not experience the Not-Invented-Here

Syndrome because the collaboration has often occurred

prior the buyout. And when they buy a new technology it

is because it is interesting, and employees typically find it

interesting.

When they sell technologies this often involves entire divi-

sions including the employees and they therefore do not

experience the Not-Sold-Here syndrome. When the

employees do not follow the technology that they have

been working on it can be hard.

Danisco has more than 2,000 active patents and patent

applications, and they have a procedure for not used

patents which is very commercially based. They look at

how much value is in the technology, and how much they

believe in the technology together with how much they

will pay for the patent rights. When they try to sell tech-

nology, and this is not possible, they give up the patent

when it gets too expensive to keep it. But patents can have

many purposes for Danisco. Patents can be used to protect

their business but they can also prevent others from tak-

ing out a patent for something that is peripheral for their

business. But as times go by and the business develops,

they might give up the patent. In that regard, they are quite

active. They do not pay for something that has no value.

But often, when they sell patents, they have to sell the

entire technology. This also happens for Danisco but they

do not develop a technology without a clear purpose.

Therefore it is rare that they end up with a technology

which they do not know how to use.

Globalisation influences Danisco’s work with open inno-

vation, as they have been an international company for a

long time. They have innovation centres all over the world.

In Danisco’s own view the company could benefit more

from the ideas of the two to three billion people in devel-

oping countries, where Danisco is also located, and where

people have different eating habits. If Danisco wants to be

a truly global food company, they must ensure that they

also involve users in open innovation in these parts of the

world.

Danisco works on setting fixed global standards within

the company. They are an international company and what

is done in one country should be implemented in other

countries too when adopted to local cultures and markets.

Danisco would like to make employees aware that it could

be interesting for them to work with other people in new

ways in open structures. However, open innovation can be

a costly affair and management must be convinced that it

is worthwhile. It is a challenge to move resources from the

incremental area to new businesses. But it is an important

process to explore the unknown potential even if immedi-

ate output can not be guaranteed. It is important that

managers can cope with this type of uncertainty.

Identification of partnersDanisco has always been very open to the needs of their

customers. The customers are naturally interested in their

own solutions and there is an issue of confidentiality. Of

course Danisco cannot take a solution from one costumer

and add this to the products of another customer.

Mondaymorning16


Case: Open innovation with NGO’s andchefs

Danisco involves NGO’s in the definition of challengesto be tackled with their technological expertise.Danisco wanted to solve the problems of phthalatesand has invented a substitution technology forphthalates which is called GRINSTED® SOFT-N-SAFE.However, it would be attractive from an idealistic as wellas a commercial point of view to establish mechanismsfor identification of these types of challenges on anongoing basis. Collaboration with NGO’s is vision-crea-ting but not necessary solution-oriented. NGO’s areinvolved in the front end of innovation where Daniscoseeks the visions and goals relevant to go for.

In a sense, Danisco does not see the cooperation withcustomers as true open innovation. Open innovation israther the identification of people who have come upwith something that Danisco can partner up with. In thiscontext they have had collaboration with a chef whowould like to open a restaurant around molecularcocking. The chef asked if he could visit Danisco andlearn more about the ingredients that one uses for mol-ecular cocking. He then worked with three employeesfrom Danisco around developing his dreams. One of hisdreams was to serve a plate of air for people. He wouldlike to serve an edible soap bubble that did not taste ofsoap. Through this collaboration Danisco got some ext-remely inspired employees that experienced that thereare other ways of thinking quality, that you make a soapbubble that tastes of lime on the outside and of ras-pberry on the inside is interesting. This inspires theemployees to do other things.

But when Danisco innovates in more open environments,

the conditions are different. If they join open collabora-

tion relations with public organisations, Danisco solves a

problem for them and gets the IP rights or they share

them. Danisco would like to help someone solve a partic-

ular problem, but in return they want to use that technol-

ogy and apply it elsewhere.

In the last five to ten years collaboration with universities

and other co-operating partners has been intensified.

Danisco identifies more universities to benefit from their

knowledge just as they look for partners who work with

technologies that have an interesting oblique angle to

what Danisco does. Danisco also tries to influence the

universities in a direction that they can use.

Advantages of open innovationGenerally, Danisco sees far more advantages than chal-

lenges in open innovation and expects to do more open

innovation in the future. Danisco does not find that the

work with open innovation has had a direct impact on the

development costs or speed. But it will have an impact in

the future, because they have begun to identify some of

the issues in society at an early stage. The scanning of

open innovation opportunities will make them able to dis-

cover these trends earlier.

Challenges of open innovationAs an organisation Danisco has issues to deal with in open

innovation. The legal department is concerned with legal

rights and clarification of the roles in external collabora-

tion.

Danisco has had negative experiences in the collaboration

with competitors, and this has a tendency to stick. An

organisation is influenced by past experience. If the past

experience involves problems with patents, the legal

department is aware that patents are something you must

look after and maintain. Consequently, collaboration with

competitors is kept at bay.

The biggest challenge in working with open innovation is

the legal aspects of IPR. Danisco is keenly aware of that.

There must be clear management guidelines in the devel-

opment stage. At the same time it is important that staff

and partners do not get scared when you ask them to sign

a confidentiality contract of twenty pages before they enter

a workshop and share thoughts about the future. Methods

must be developed that do not scare off people, but ensure

that if anything comes out of the collaboration IP can be

protected. Without a confidentiality agreement patent

agreements become difficult. While the dispersion of roy-

alty is not always that important, time to market is a key

factor. It is important to get as fast as possible to market.

It is important to develop new methods and identify

lawyers who have the same thoughts around open innova-

tion and see new possibilities in making new types of con-

tracts.

Danisco does not experience that legislation or other

external factors complicate the work with open innova-

tion. External funding is considered too troublesome by

Danisco. If a company is serious about something, they

must do something about it no matter what the govern-

ment says or does.

Open innovation in the future The way that Danisco works with open innovation is like-

ly to change in the future. They feel they can approach it in

a much more interesting way. If they want to use the com-

munities on the internet, they need different kind of peo-

ple with more soft skills, like for example anthropolo-

gists, than the engineers that are more prevalent in the

company today. Soft skills include communication, trend

spotting and interesting connections. Danisco feels they

need to change the profile of the people that work with

these issues to benefit even more. All employees must

focus even more on open innovation to make it more of a

calculated and planned process. Danisco would like to

have more double loop learning in regard to open innova-

tion and make people think about the implications for the

rest of the organisation of solving one problem for one

particular customer. Employees need to reflect systemati-

cally on what they do, and how the experience can be used

in the rest of the company. Every contact with the cus-

tomer or other external co-operations should create a

reflection.

Mondaymorning 17


Quilts of Denmark Ltd.

• Open innovation has reduced development costs asQuilts of Denmark share the development costs withexternal partners

• Partnerships ranging from sleep researchers to NASAhave given a small company like Quilts of Denmark theadvantages of a big company

• Open innovation has given Quilts of Denmark newangles to the real product requirements and the entire-ty of the innovation process

• From the point of view of a small company open inno-vation requires rules to ensure a fair process

Short presentation of companyQuilts of Denmark was founded in 2000 and is behind a

number of international brands in the field of high quali-

ty sleep. The company is situated in Vamdrup, Denmark,

and has 75 employees. In 2005 the gross profit was 2.7

million euro. In 2007 Quilts of Denmark was chosen the

most innovative company in Denmark by Innovation Cup

in the category of small companies (less than 100 employ-

ees).

Overall approachThe work with open innovation in Quilts of Denmark has

come along the way since 2000. Today the development of

new products always includes external partners. As it is a

young company, and co-operation with external parties

was a part of the conceptual framework from the begin-

ning, it has not been necessary to change the organisation

to work with open innovation.

Quilts of Denmark works systematically with open inno-

vation. They form different development consortiums

where the partners determine the rights to the technology

and the wishes on benefit from the beginning. The size of

the consortiums differs and depends. From three or four

partners to the biggest at the moment which has knowl-

edge partners form Lund University Hospital and cus-

tomers and technology partners from Italy, Spain and

Denmark. The project, which has a million Euro budget,

will probably receive EU funding and runs for four years.

Quilts of Denmark would probably never join such a large

development project themselves, and therefore they have

organised it together with a large European development

company called Pera. Pera is responsible for the project

management, and Quilts of Denmark mentions profes-

sionalism, their access to 500 engineers in Europe, a big

network consisting of experts in all areas and the experi-

ences from working with thousand companies as the

main reasons for engaging in open innovation with Pera.

But a routine or system on open innovation is also used in

smaller projects. Quilts of Denmark finds it important to

make it clear which competences the different parties pos-

sess and who owns the rights to the new technology very

early in the process.

Quilts of Denmark has not sold technologies, but they

have thought about the possibility of using their technol-

ogy in other areas. They have also developed some patents

that their competitors would like to use, and a couple of

these competitors have also been given licenses to use

them. In those cases they make agreements on which

areas and markets their competitors may use their tech-

nologies. The competitors have not been in the same

areas and markets as Quilts of Denmark or in areas and

markets that Quilts of Denmark plans to enter.

Quilts of Denmark has about fifteen large patents and a

number of small patents which are all in use. They have a

procedure for patents, in the sense that they evaluate the

commercial value of the patents compared with the costs

of maintaining them and the value of the protection.

Quilts of Denmark sees itself as a born global company

because of their international background. They wanted

to be an international company from the beginning, and

today they operate in 35 countries. If they are to invest in

expensive development, the new product must have a

global potential.

Identification of partnersThere were areas where Quilts of Denmark had no knowl-

edge and knew no one, i.e. sleep research, when they first

started. Therefore they actively sought a network in this

field by calling and asking different sleep researchers to

collaborate. Quilts of Denmark finds that they are very

good at using their network and it is important to have

some partners around as they give the company more

strength. From the beginning they also had an informal

advisory board.

Today they have many good contacts to well-reputed sleep

researchers. Quilts of Denmark has been able to say that

they do not have big budgets for the collaboration, but

they would like to work seriously with solving relevant

issues. On the other hand, when Quilts of Denmark dis-

tributes products, they write something about sleep, and

here the sleep researchers are always involved. The sleep

researchers find this interesting and they are interested in

Mondaymorning18


spreading knowledge about the good sleep just as this it is

part of their clause. Therefore, the sleeping researchers

can work with Quilts of Denmark.

Apart from sleeping researchers they also use companies

and technology experts in the co-operation on develop-

ment if the external partners can provide knowledge that

they do not possess themselves.

Advantages of open innovationThe use of external partners has had a positive influence

on the development costs at Quilts of Denmark. When

they develop new technologies with external partners i.e.

suppliers they share the development costs, and the sup-

plier invests in the development of the expectation of

orders. The work with open innovation has also shortened

the development time as their employees can work on

more projects at the same time.

Challenges of open innovationQuilts of Denmark finds that one of the challenges with

open innovation is to establish a fair process. It is impor-

tant that everyone in the development project gets owner-

ship and interest in the project. But it is equally important

to have the same time schedule. Quilts of Denmarks has

had a few negative experiences with open innovation due

to the development with partners far away like for exam-

ple China. Therefore, they experience that the physical

contact is important.

Quilts of Denmark has not experienced the Not-Invented-

Here Syndrome. There is an understanding in the compa-

ny that it is a large advantage for a small company to

acquire external knowledge and technologies which gives

them some of the advantages of a big company. They also

find that this is the possibility for Denmark if companies

can handle and get the right projects.

Quilts of Denmarks does not experience that legislation or

other external factors complicate the work with open

innovation. But there are some demands to the products

that make it complicated. They are engaged in the work

with international standards, as different standards in dif-

ferent countries have a very negative effect on the compa-

ny. As it is now, Quilts of Denmark has to make different

products for every country in Europe as the product

demand on size differs.

Open innovation in the futureQuilts of Denmark is convinced that they will work more

with external partners in the future. The approach to open

Mondaymorning 19


Case: Working with NASA on a healthysleep

The quilts made by Quilts of Denmark are based onknowledge provided by sleep researchers. The sleepresearchers could tell Quilts of Denmark what the realneeds on quilts were. Normally quilt producers concen-trate on comfort, and this of course has significance.But when it gets to insomnia the important issue istemperature regulation. It is not enough to producesomething that isolates and gives you an immediatecomfort. The temperature regulation in the middle ofthe night is more important which the sleep resear-chers could tell them.

Quilts of Denmark worked on a technology inside thecompany that could regulate the temperature in quiltsbut the technologies did not work. In some scientificmagazines they read that NASA had solved this problemand invented a technology called TempraKON®. Theythen contacted NASA. At that time many people askedthem, if they could just call NASA. And actually theycould. When Quilts of Denmark got on to right people,the people at NASA were quite surprised that a smallcompany from Denmark was interested in what theyhad worked on. So NASA kindly shared their knowledge.It took two weeks before Quilts of Denmark got troughto the right person, so stubbornness was important.

NASA sells some of their rights for technologies thatcan be used at peace full purposes. It is a part ofNASA’s objects clause that they receive public fundingfor research, but in return the technologies must beused to improve the quality of life on earth. The com-pany Outlast had bought some of these rights and usedit on insulation materials for house insulation. Quilts ofDenmark contacted Outlast and they agreed on a jointdevelopment. Basically Outlast kept the rights on insu-lation materials and Quilts of Denmark received the rig-hts in relation to down quilts and down pillows.

But the technology invented by NASA could not be dire-ctly transferred to the company’s quilts. The problemwith the technology was, that Quilts are soft and thetechnology invented by NASA was stiff as chipboard. Sothe technology had to be modified and they issuedsome demands and a long development work withOutlast to make it work. A producer of winter jacketsnow has a licence production where they use thetechnology owned by Quilts of Denmark.

The collaboration with Outlast did not require muchlegal work. With NASA it was different. Actually the col-laboration started out at as development work wherenot much was written down, because they had not cal-culated the actual commercial value. Also no confiden-tiality agreements were signed, which they would pro-bably do today.

innovation may also change. They have recently estab-

lished a joint company in America with three partners. It

started out like a project, but it has now developed into at

joint company.

They have not used the internet (blogs or communities) to

a very significant extend in the work with open innova-

tion. They find that they should do so in the future and it

is probably coming up, but they have not taken specific

steps so far.

Mondaymorning20


Exiqon Ltd.

• Exiqon’s staff of researchers have brought with themacademic traditions of open innovation

• Partnerships with cancer researchers reflects Exiqon’smutually beneficial approach to open innovation

• Open innovation at Exiqon has had an positive impacton development costs and time to market

• Exiqon tries to avoid licence agreements as they areseen as inflexible

• Exiqon has systematised the work with external net-works to align co-operations with internal develop-ment needs

Short presentation of companyExiqon was founded in 1995 and launched its first product

line in 2004. The company is a leading supplier of high-

value gene expression analysis products for the life

sciences, research and drug discovery industry, has 70

employees and reached a revenue of 5.7 million euro in

2006. In 2004 Exiqon was selected as a top 100 innovator

by Red Herring.

Overall approachFor Exiqon there are two key approaches to open innova-

tion. If Exiqon has applications that they wish to develop

they contact people who have expertise that would help

them in the development. The second approach to open

innvoation is user driven innovation. This can be external

partners who contact Exiqon with an issue or a solution

on their products.

Confidentiality agreements just as material transfer agree-

ments are often used by Exiqon. Exiqon tries to avoid

licences when they develop with external partners,

because a licence agreement is complicated to work out.

Licence agreements are considered time-consuming and

must be worked out very early in the process where the co-

operators do not know what the benefit of the develop-

ment is. Secondly a licence agreement will often limit the

development because they may find out five years later

that the area is much broader then first assumed.

The business also has a very large number of products and

it is a challenge to follow small licenses and royalty pay-

ments.

Exiqon builds on a technology which they bought. In this

sense they have always been working with open innova-

tion. At an intermediate stage open innovation was actu-

ally the strategy. From Exiqon’s point of view there is so

much administration around EU grant applications for a

company like Exiqon that the potential economic benefits

are overshadowed. On the other hand EU collaborations

can be a way of financing useful projects and get connect-

ed with new groups of researchers. It was a part of their

strategy at a certain time; to take part in these networks

knowing that there was no immediate economic gain.

The organisation has not been changed to make Exiqon

benefit from open innovation, but they have systematised

the work with external networks and have tried to make

some evaluation criteria. University researchers are always

interested in co-operations with Exiqon, but it is impor-

tant for Exiqon to align their co-operations with their

internal development needs and if the external parties can

solve their issues. For that purpose Exiqon has a commit-

tee that keeps track of which co-operations they enter

into.

Mondaymorning 21


Case: Working with researchers for thebenefit of both partners

Exiqon wanted to develop a technology that could visu-alize genes in intact tissue. They had some idea that atechnology they already had might be well suited forthis. They contacted a cancer researcher from theNetherlands who had a specific expertise in this areaand had all the biological samples that were relevant totest this. In many cases it is important for Exiqon, thatthe researchers have access to the biological samples,which is one of the longer steps in a development pro-cess. If they start the process from scratch with biolog-ical analysis Exiqon can do a lot from a technologicalpoint of view, but when they want to test in a biologicalproblem definition, they need to have access to tissue.Access to biological resources is critical to Exiqon’sdevelopment work and therefore one of their key bene-fits from doing open innovation.

Sometimes external partners contact Exiqon with anissue or a solution. For example they cooperate with anAmerican university which contacted Exiqon regarding atechnology that Exiqon possess. The university wantedto use this technology in some applications. Exiqon wasinterested in a co-operation and the university wasgiven the use of the technology. The university develop-ed some new interesting methods that Exiqon benefitsfrom today. The university contributed with an issue thatExiqon had a part of the solution for, but the final solu-tion was developed by the university via Exiqon’stechnology. Exiqon acquired new methods for theirtechnology and the university solved a problem andobtained scientific publications and grants.

Exiqon has 150 active patents and patent applications,

including 75 issued patents. They do not use them all, and

they do not have a formal procedure for handling unused

patents. As the costs on patents rise they evaluate on the

commercial potential. When the patents go into a nation-

al phase they have to be translated which means large

costs. In this phase there is a reality check. Do the patens

have value and in which countries?

In the last couple of years Exiqon has not disposed any

unused technologies, as they have been in a rapid growth,

and they believe that they can use the technologies some

day. But people have called Exiqon for licenses and they

have evaluated and considered every case. If the buyer has

patents in the same area they do not lose that much and

consider it.

Exiqon has always been a global company, and 95 per cent

of their production is sold in foreign countries. They have

opened a sales office in America, and this has resulted in

a more extensive network in America. This has also had an

impact on the development, as they get more input from

the users of their products.

Identification of partnersWhen Exiqon enters into development co-operations with

external partners they look at different things. They would

like to recruit ambassadors, and therefore the look at their

CVs, but they also work on defining what sort of issues

they have and to make it clear weather this collaborator

can solve this issue.

Exiqon looks for external development partners in all

phases of the innovation process and they often have more

external partners around the development of one product

at the same time. The projects are then formally coordi-

nated and typically very project-oriented. In small projects

the work can go on in small satellites – which can be seen

as a form of skunk work combined with open innovation.

Advantages of open innovationThe work with open innovation has had an impact on the

development costs in a positive way, and Exiqon at present

has around twenty development co-operations with exter-

nal partners. Exiqon finds that there is no doubt they have

saved on development costs. Open innovation has also

had a positive impact on the development speed. In both

cases savings are obtained because Exiqon does not have

to build the knowledge inside the company.

Challenges of open innovationAccording to Exiqon there are two key challenges on open

innovation. It can be time-consuming to manage your net-

work and time must be allocated to harvest the knowl-

edge. Secondly there can be a significant cost factor

around the contractual issues.

The employees welcome it when Exiqon engages in exter-

nal co-operations and therefore they do not find that they

experience the Not-Invented-Here Syndrome. Exiqon

finds that this probably is interrelated with the fact that

Exiqon has experienced rapid growth and that any help is

most welcome.

Exiqon has had a few negative experiences with open

innovation, when they have not made a clear agreement

on when scientific publications may be published.

Researchers would like to be the first to publish articles,

but Exiqon would like to time publications with their mar-

keting strategy.

Exiqon often releases products for researchers which are

not fully developed. This is a calculated risky option as

researchers also write about the things that do not work in

the open as with the things that work.

The patent legislation is the only legislation or external

factor that has a negative impact on the work with open

innovation for Exiqon. In America and a couple of other

countries they have a grace period which means that the

inventor can patent an invention up till one year after he

has disclosed it. This is a quite unique American inven-

tion. Exiqon has used this from time to time in relation to

co-operations where they find something that a

researcher has published and they think is interesting.

They have a dialogue with the researcher and maybe file

patents inside the grace period. But this is not possible in

Europe.

Open innovation in the futureExiqon will probably be slightly less engaged in open

innovation in the future as they grow and employ more

people inside the company. However, they do not have

deliberate efforts to reduce open innovation. The way that

they work with open innovation may change over time, as

they also improve their internal processes on an ongoing

basis. Changes in internal processes could have an impact

on the work with open innovation just as it can make the

pros and cons around open innovation more visible.

Mondaymorning22


Exiqon does not use the internet (blogs or communities)

in their present work with open innovation. But their

rapid growth has challenged the knowledge sharing

inside Exiqon for which reason NEWS (Now Exiqon

Works Smarter) an intranet for internal knowledge shar-

ing has been introduced.

Mondaymorning 23


IBM Denmark Ltd.

• The internet has provided IBM Denmark with inspira-tion for new ways of working with open innovation,Innovation Jam, which has resulted in many new busi-ness ideas

• Open innovation has increased development costs butgiven IBM Denmark competences that they would nothave been able to build themselves

• Technologies developed for container monitoring atMaersk has through well-functioning internal knowl-edge sharing at IBM Denmark resulted in technologiesdeveloped in one business area being used in otherbusiness areas

Short presentation of companyIBM Denmark was established in 1950 and is Denmark’s

largest IT-company with some 6,100 employees in the

country. IBM Denmark delivers IT services and sells hard-

ware and software products that are mainly developed at

their research and development laboratories. A leading

global player in its field IBM Denmark has a long history

of open innovation experience.

Overall approachAlthough IBM is a large company with around 360,000

employees, they are aware that a lot of the ideas are out-

side the company and that the bright minds are not only

inside IBM.

In 95 percent of the cases IBM does not innovate for the

sake of the innovations. They innovate because they know

that the innovation has significance and can be commer-

cialized. Therefore, they find it is important to get impuls-

es from the outside. Open innovation according to IBM is

when you include customers, business partners, universi-

ties, research institutions and others outside IBM in the

innovation process. But IBM also provides external part-

ners with their knowledge and they sell their patents and

their innovations: ODIS (On Demand Innovation Services)

is a part of IBM where they mix their research and their

consulting competencies and sell innovation projects to

customers.

The work with open innovation in IBM has changed over

time. In resent years the pace of change has increased.

The research became much more outwards in connection

with the crisis in the early nineties. They found that if they

wanted to survive, they had to listen to their customers.

IBM has introduced new roles for certain parts of the

organisation who are given the task of working with

strategic customers. ODIS is an organisational change.

Relationship managers in research have one-on-one rela-

tion with two or three big customers. EBO (Emerging

Business Opportunities) is another area that developed

around seven or eight years ago. EBO are principally some

temporary global encored organisations that identify

potential business areas where they can see a growth

potential for IBM, of a certain kind of size (typically

around one billion dollars) with a time frame of three to

five years. They can work long term and across traditional

organisation and they are not in the same way measured

on quarterly revenues as the most of IBM.

As they mature these projects IBM reassesses on the prod-

uct portfolio as the products are produced and get a part

of the normal organisation while EBO focuses on some-

thing else. EBO might also shut down the organisation if

their mission is accomplished or they may have built a

community of business partners around the project. It

may also turn out that this is not an area for IBM, as there

is not a market, or the customers go some were else. In the

last case they may shut down the organisation and move

their resources somewhere else or they might sell it to

external parties.

Identification of partnersIBM Denmark engages in open innovation projects with

other parties. The projects must create value and have a

commercial potential just as the external parties must

have competencies that IBM does not have on its own or

the external parties can bring new technologies to the

project. This may also include very small companies that

have some sort of core competence. There are no special

demands on how external parties must contribute in the

work on open innovation.

An example of open innovation is ElderTech where IBM

Denmark has made a public private co-operation contract.

They look at how one can monitor elderly in their own

homes and create some technologies that the elderly can

handle so that one can meassure their blood pressure and

weight on an ongoing basis. Another project in health-

care-IT is on how one can predict that elderly get a stag-

gering walk and fall over to prevent this from happening.

This collaboration involved a technology that IBM knew

that DTU was controlling as they had developed some

thread less censors that could monitor this which they

used it to monitor how pigs walk. Therefore IBM included

some knowledge from DTU and tested the technology on

elderly. The knowledge was given back to DTU who was

Mondaymorning24


made aware of that there were other applications for this

3D accelerator.

Advantages of open innovationIBM Denmark finds that open innovation has an impact

on the development costs because they involve some com-

petencies that they do not have to develop themselves. The

development might get a little more expensive and slow

but they get some competencies that they could not build

themselves. Open innovation can slow down the process

because of the external decision making process.

In recent years IBM has run specific activities to get input

on innovation. Innovation Jam is a very fast process which

they run over 72 hours. Via a special website all at IBM,

universities, thought leaders, family members and cus-

tomers are invited to participate in a debate about topics

that IBM decides. Last time it was big global issues: envi-

ronment, healthcare and traffic, and ran in two rounds. In

July they raised some topics and started the discussion

that ran over 72 hours. They had quite a few people and

software that could analyze the incoming data: What is

the trend? What is especially discussed? What are made

suggestions for? In September they then ran a second

round where ten areas were crystallized out and they could

identify needs and interest. They then began to allocate

resources for related innovation processes and were fund-

ed with approximately 100 million dollars. Around

150,000 people participated, and 46,000 qualified propos-

als were collected. They have used some time on analyzing

the data. To be a success the process has to be managed

and some areas must be pointed out.

In one of the projects on healthcare, IT and electronic

patient records IBM Denmark (Acure) is involved because

they have special competences in that area.

At IBM Denmark they are interested in making an

Innovation Jam on issues where Denmark has special

competencies. IBM also offers the technology behind

Innovation Jam for other companies and their customers.

“Thinkplace” is an intranet site where all employees at

IBM have access and can submit proposals on new prod-

ucts and processes. People can be catalysts and rate the

incoming proposals in their area. Just like on YouTube.

The product or process may then move on to the next

level, and managers can sponsor an idea and take owner-

ship of the idea. A team of typically three or four people

from all over the world with the right competences can be

formed. They might get allocated one day a week to work

Mondaymorning 25


Case: A global collaboration on containermonitoring solutions

IBM Denmark has a global competency centre on logi-stics. They have an organisation that only services logi-stic companies and especially the company Maerskwith a lot of the very specialised systems that theyhave. Maersk is a strategic customer and IBM oftenmakes a value creation centre with their strategic custo-mers, where innovative core employees from both par-ties are brought together. Employees from research areappointed and they have a direct relation to the custo-mer and they start looking at which areas they wouldlike to develop inside. One of the things that were bro-ught up was the monitoring of containers, as there weresome demands from the American government. IBMwas already looking at that area so they decided to joinforces with Maersk and exchange some of the ideasand IP rights that they had, and they actually mergedthese IP rights and made a joint development project.Together they developed a global container monitoringsolution, which is very unique device that can be placedon the container. It communicates in different ways sothat one always knows where the container is, if it hasbeen opened or shook and if there are dangerousthings in it when it approaches the American harbour.

This co-operation included people from Maersk, exter-nal experts in telecommunications where they neededcompetencies from the outside, and their research inZurich, their ODIS (On Demand Innovation Services)people which are their consultancies. At team ofapproximately 40-50 people worked on a solution thatwas found nowhere else in the world for a couple ofyears. The project was global as they have people situ-ated in America and Zurich, just as they had quite a fewpeople situated in Denmark because this is where thecustomer, Maersk was situated, and this is where theygot the business knowledge and were told which requi-rements the solution had to fulfil.

The project also integrated other companies with simil-ar demands for this kind of technology. A big transportcompany that works with flight transport was interestedin wether this technology could be used on containersthat are loaded into aeroplanes or transportation byroad.

When IBM works on projects they create knowledge andmake sure of telling about this inside IBM. This canmake people from other industries interested. At IBM itis very easy to locate who is on a project. This createsthe possibility for employees to present knowledge toother customers who have related issues.

on and develop this technology or business model.

Thinkplace is as a starting point internally. But the later

idea development might just as well include external part-

ners as in the normal business model. IBM also has some

programs that are called “extreme blue” which are inno-

vation development projects that involve universities in a

short development period around six weeks, and an idea

from “Thinkplace” might just as well go to “extreme

blue”.

Challenges of open innovationOne of the challenges regarding open innovation in IBM

is to find funding. There must be a commercial aim.

Corporate social responsibility can also generate funding.

Other challenges can be IPR rights which are handled by

the legal department. The biggest challenge is probably to

allocate the money, which is often taken from the normal

business. Open innovation often needs to be seen in a

long term perspective.

IBM Denmark does not find that they experience the Not-

Invented-Here Syndrome, rather on the contrary because

their partner concept is such an integrated part of IBM.

They also find that people in IBM are proud of working

with other people. In the same way IBM Denmark does

not find that they experience the Not-Sold-Here Virus.

Employees are proud when a patent is sold, and they get a

certain amount of the sales value.

IBM Denmark does not experience barriers for open inno-

vation. A study on e-readiness carried out by IBM and The

Economist even ranks Denmark with the highest e-adapt-

ability in the world measured by six parameters. IBM

Denmark considers this to be a big advantage.

IBM Denmark runs about five to ten open innovation proj-

ects on radical innovation and they sign confidentiality

agreements when they engage in open innovation. Patents

are managed globally.

IBM Denmark does not find that the globalisation has had

an impact on their work with open innovation as they are

a global company. They have been working with partners

all over the world for a long time. But they are building

facilities for video conferences at the moment because

they want to level the earth also inside IBM, in relation to

their customers, as customers can get access to

researchers all over the world without travelling. The

globalisation has only had the impact that they can use

their network and offer this to our customers. But not in a

negative way. They also experience that their customers

are more open towards using experts form other parts of

the world, among other factors because of their techno-

logical tools which makes this easy.

Open innovation in the futureIBM Denmark is certain that they will work more with

open innovation in the future. IBM Denmark has recently

been established in second life and open innovation is

seen as an essential part of this. They find it interesting to

look at whether second life can facilitate open innovation

as a place to meet and develop in three dimensions. IBM

Denmark sees second life as a place where everyone can

look at and comment.

Mondaymorning26


Open innovation - and active involvement of users in par-

ticular – is recognized by the vast majority of participants

in Innovation Cup as a key priority in strategic business

planning. However, if this general recognition is cross-

checked with the prevalence of specific innovation meth-

ods it would appear rhetoric is ahead of practice. What is

known to be important is not always practiced.

Seen in a positive light, rhetoric ahead of practice means

an unexploited potential awaits businesses aware of the

possible benefits but have not yet realized the full poten-

tial.

The five Danish companies, subjected to the present case

studies, practice open innovation to a very high degree. It

comes natural to the case study companies to practice

open innovation. Neither does it appear to be a result of

direct pressure from globalization, nor – necessarily - a

very calculated strategic choice. The Danish leg of the

international giant IBM is the exception from this last

point. They practice open innovation due to a more strate-

gic global focus.

Intellectual property rightsA shared experience by all five companies is the fact that

open innovation draws attention to the challenges of

intellectual property rights. The challenges do not stop

any of the companies from doing open innovation or rec-

ommending it for the future but establishing the rules of

the game from the beginning is seen as key to avoiding

subsequent conflicts over IPR issues. Small companies

draw particular attention to the need to establish rules for

a fair process. There needs to be clear benefits for all par-

ties involved.

Open innovation is practiced with varying degrees of

openness and formalisation. A shared understanding of

the objectives of open innovation is seen as important to a

successful process. Companies who see contracts as key

to handling potential conflicts over IPR stress the need to

involve lawyers with a clear understanding of the objec-

tives of and particular mind set involved in open innova-

tion.

Different starting point for open innovationThe studied companies have very different starting points

for their work with open innovation. They differ signifi-

cantly in size and age. More than anything else, size and

age seem to be the two defining parameters. The smaller

and younger companies tend not to question the use of

external collaboration in their innovation activities. The

larger companies are generally more internally oriented

and tend to look in before they look out.

The size and age also effect how the companies organize

themselves internally for open innovation. The smaller

companies can easily adapt to the work pace and proce-

dures of external partners, whereas larger companies

seem to be more troubled by the fact that other actors have

different development systems and traditions.

All companies are systematizing – in one way or the other

- their collaboration with external partners. High on the

agenda is making out and signing agreements enabling

the partners to collaborate more freely with less ambigui-

ty.

The use of intermediates is mostly applied when develop-

ment technologies and innovations are transferred from

one organization to another. In collaboration on develop-

ment projects the connections are often more direct

between the involved actors.

Push and pull on the networkOn the basis of the present case studies Danish companies

would appear to be very active networkers. In achieving

optimal benefits from collaboration in networks there are

both pull and push effects that work simultaneously. The

companies experience that their networks push new ideas

to them that prove very useful. But they also sometime

Mondaymorning 27


III Perspectives on open innovationin Denmark

have to put a lot of effort into pulling ideas from new and

old contacts.

Open in the front end of innovation The five cases in this study are mostly focused on open

innovation in the front end of the innovation process.

They are most keen on getting ideas from others and not

so much on developing their own in other organizations

or selling them to others. Some of the companies like

Danisco that actually push their innovations on to the

market through their customers do not perceive this as

open innovation, probably because the innovation is not

marketed by themselves.

Issues to be exploredThe case studies provide a qualitative insight into the

innovation management processes at company level and

show many interesting perspectives on open innovations

in the Danish context. Younger and smaller companies

tend to be more open than larger and more established

ones but due to the limited scope of the study, it is difficult

to draw general conclusions on open innovation in

Danish companies as such. However, the study sheds

light on a number of relevant, yet unclear, elements that it

would be interesting to study in more depth.

For one thing the method of studying best practices limits

the knowledge about challenges with regard to open inno-

vation. It would be very interesting to investigate cases in

which open innovation has failed. Rather than looking at

success drivers only, such a study could focus on obstacles

to successful open innovation and how these may be over-

come. Learning from mistakes and recognizing the trial

and error nature of innovation processes requires confi-

dentiality and respect for the companies involved. The

prize to be won might be useful insights into the black

box of open innovation. From a Danish point of view,

open innovation experiences by small and medium-sized

companies would be of particular interest.

Although Open Innovation is practiced to a high degree in

the companies studied, little focus is given to openness in

the later phases of the innovation process. Licensing out

technologies or spinning out companies would be inter-

esting aspects to look into in the context. It would there-

fore seem relevant to try to make companies more aware

of the potential benefits to be derived from open innova-

tion. A mapping of the challenges to openness in the later

part of the innovation process could prove useful in this

respect.

Mondaymorning28


Gabriel Ltd.Mr Jørgen Kjær Jacobsen, CEO

Danisco Ltd.Mr Flemming Vang Sparsøe, Senior Scientist

Quilts of Denmark Ltd. Mr Hans Erik Schmidt, Development Director

ExiqonMr Søren Morgenthaler Echwald, Vice President

IBM Denmark Ltd.Mr Anders Quitzau, Business Development Manager

Mondaymorning 29


Appendix AList of Interviews

Innovation Cup builds on a method measuring the most

important management parameters necessary to be suc-

cessful with innovation. The method is developed into a

model entitled – “Seven Circles of Innovation” – in co-

operation with:

• A range of Europe’s leading innovation research scien-

tists, including professor in innovation, Anders Drejer

from Aarhus School of Business, Sören Salomo from

the University of Graz, professor John Bessant from

Cranfield University, professor José Santos from

INSEAD

• A wide range of leading Danish companies, including

Radiometer, Coloplast, Novozymes Danmarks Radio

and Jyske Bank

• Danish Centre for Leadership, one of Denmark’s lead-

ing development centres on management, and

Fremtidstanken, a forum for innovation thinkers

The model uses the latest knowledge and practise regard-

ing innovation management and has been tested on 450

Danish private and public companies. On the basis of this

extensive research a web-based questionnaire has been

developed thus providing quantitative data for the identi-

fication of the innovative capacity of the individual com-

pany.

Innovation Cup analyzes the organisation’s innovation

competences on the basis of the results of a web-based

questionnaire, filled out by ten employees. Together with

assessment visits at selected companies, the steering

committee behind Innovation Cup works out an

Innovation Profile. The profile gives a picture of the inno-

vation competences of the organisation, both strengths

and weaknesses, in three main areas:

• Innovation framework – fundamental conditions for

innovation are the cornerstones for all organisations.

Strategy, organisation, competences, culture and exter-

nal co-operation. The quality of the framework defines

the ability for continual innovation

• Innovation processes – Innovation requires well-func-

tioning processes. The innovation process is divided

into a number of different activities from idea genera-

tion to implementation. Each phase can influence the

total success.

• Innovation success and results – Innovations are cate-

gorized as successful if they have created value. Either

by the way of increase in sales and profit, better service,

increased customer satisfaction or if the innovations

have created completely new markets or contributed to

more effective internal processes.

With the Innovation Profile lined up the companies can

focus on selected parameters under the three main areas

as for instance market flow, internal co-operation,

resource application, external co-operation, team compe-

tences, information gathering and project management.

The company’s results are benchmarked with other par-

ticipating companies and organisations – private and

public – in Innovation Cup. This provides a unique per-

spective on their profile and serves as basis for an

Innovation Profile (18-20 pages), summarizing their

strengths and weaknesses, opportunities and challenges.

Innovation Cup 2007 culminated with an Innovation

Camp on 27 March 2007. Innovation Cup participants

met with leading experts at an interactive “camp” and

developed new ways of handling challenges and making

use of opportunities on the basis of their individual

Innovation Profiles. More details can be found in the

report ‘Innovation Cup 2007: Vindertræk – perspektiver

fra danmarksmesterskaberne i innovation’ (in Danish).

Mondaymorning30


Appendix BInnovation Cup

Documents

Open Innovation - Mandag MorgenOpen Innovation - Case Studies from Denmark represents Denmark’s case study contribution to the OECD project on Globalisation and Open Innovation.The