Frank Piller of MIT and Rick Wielens of NineSigma published an article in Innovation Management about how going beyond the boundaries of your industry to solve technical challenges can create real value. They document the case of FVA, a German chain-drive industry consortium.
Open innovation is not an automatic success but one that demands thorough preparation and rigid implementation. Their main key success factors for any open innovation project with external stakeholders in solving technical challenges are:
- Clearly defined problem definition, ownership & objectives.Perhaps the most important factor is to have a problem or task that is suited to being crowd sourced. Start with the problem and challenge owner. Determine the objective of your open innovation venture before hiring an intermediary. Intermediaries differ, and not all are equally suited for the same kind of task.
- Create a good open innovation environment. A dedicated team is critical to make open innovation a success. This starts by installing a central project competence for your open innovation initiative. Successful companies have nominated an internal OI champion who is passionate outwardly focused and capable to coordinate different crowd sourcing projects. Equally important, is to educate other team members and employees about the objectives and principles of the open innovation project so that they understand what is expected from them and what they should expect of open innovation.
- Decide about the span of control. Open innovation is about opening up to the periphery of your firm. But you can decide about the control you want to keep during the knowledge transfer process and the exploitation of the results by selecting an appropriate method and intermediary. For example: Shall potential solution providers learn who you are and see your name and company logo on the RFP? We know that RFPs that reveal the challenge owner’s identity can receive significantly more and sometimes better proposals. But revealing who you are also may inform your competitors. Knowing about these trade-offs is crucial for open innovation success.
- Create realistic time-lines and budgets. First of all, be fast. RFPs and also solution proposals will get to competitors sooner or later. So before you start, get the buy-in for the implementation of returned solutions that match your requirements. Reserve a budget for this. Be sure about the human capacities and resources required for the review process of the solution proposals and for making a technology sourcing decision.
- Decide about your resource allocation. Consider what’s next in the short term: Are you seeking for an intermediary that also provides support before and after the RFP broadcasting, e.g. with evaluating the solutions or negotiating the licensing terms? Or do you want to perform these activities in-house. Both options are available, and have their distinctive pros and cons. Also consider what’s next in the long term: Think of, e.g., community management. Shall the intermediary help you to manage a community of potential solvers? Or are you prepared to take these tasks by yourself?