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How Open should you be with Open Innovation?

Tue, 07/27/2010 - 14:23 -- admin

Classical “Not Invented Here (NIH)” approaches are usually associated with a secretive and highly protective approach to business. Such companies are keenly aware of the risk of disclosure, the danger of handing even the most minor advantage to competitors and the personal career risk of doing something wrong. The default position is usually legally-driven, involving heavy non-disclosure agreements (NDA), concern about only reviewing non-confidential information, invalidating Intellectual Property and not letting junior people loose.

One of the dilemmas these organizations face in the early stages of implementing Open Innovation is to decide just how open they want to be. This is not intended to belittle genuine concerns. Every company should be professional about Open Innovation relationships and yes, that does include ticking all the legal boxes. Any company representative meeting prospective partners should be appropriately trained and experienced in the legal side of things, and know the right time to move from useful non-confidential information to a NDA, what to say and what not to say. But this only gets you to base camp. If you want to engage potential partners in a relationship, you need to give something and be open to get something back. This goes for direct discussions as well as what you publicize on a corporate Open Innovation portal.

So I’d like to suggest some guidelines.

1. Don’t surprise a competitor. Most companies know their competitors’ businesses very well, and are generally looking for the same things. They are technical experts in their fields, they know what’s hot and what’s not, so they are unlikely to be surprised by the technical depth describing your search. You can go into great detail about your technology requirements on your Open Innovation portals without surprising a competitor. In conversations with other companies, you can use the same principle to describe what you want while still at the non-confidential stage. For example, Procter & Gamble are currently looking for “A breakthrough solution to improve carpet cleaning”, and Reckitt Benckiser want “Technologies to help reduce or neutralise allergenic species in air and/or on surfaces.” Their competitors, like Unilever, Clorox and Henkel, won’t panic. Even if they could use this information to extrapolate what the overall brand strategy may be, they are unlikely to add much value.

2. Ask yourself “what’s the worst that can happen”? You need to be realistic here. Don’t think of bad outcomes that have a very low probability. Use common sense and weigh the upside against the downside. The danger is you don’t seize a large opportunity because of a small risk.

3. Be very specific about what it is you are looking for. At this stage you don’t need to explain why you’re looking. The reason to be as specific as you can be is to help people who don’t know you so well. Competent Open Innovation companies are expert at finding the “adjacencies”, technologies that are used in other industries that have application to yours. Specifying what you need helps people in those adjacent segments find you with what they have to offer. It also helps intermediary technology brokers who may have something valuable for you. As shown above, P&G and RB are quite happy to go into detail.

4. If you’re still not sure, use intermediaries. If you’re still concerned about disclosing your identity, you can stay anonymous and post your technology or product requirement with an Open Innovation Intermediary, like Innocentive, YourEncore or Hypios. The added advantage is these networks directly access large populations of solvers, or use semantic web techniques to find people who may have the solution you need. Finally, Open Innovation needs open minds and open processes. You need to let go of some of the false security that tight legal certainty gives you. Developing an open mindset doesn’t mean you’ll encounter problems, you may actually have more problems if you do nothing and let your competitors snap up the innovation of the future. If you're still not sure - call us.

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