Operationalizing Open Innovation

Making the case for open innovation is clear and has been well articulated across industries: rapid pace and cost of innovation, majority of innovation from smaller companies/entrepreneurs, and the realities of constrained R&D budgets. What’s not as clear is how to build the organizational structure and framework to successfully operationalize open innovation. How to embrace entrepreneurial behavior so important for open innovation yet stay focused on key business needs? How to ensure open innovation is not an isolated activity but is embedded in everything we do? How to balance longer term, bigger growth opportunities with the reality of “putting runs on the board” quickly? Should open innovation be centrally led or in individual business units? This presentation will cover some of the approaches Kraft has employed to define the “what” and drive the “how” of open innovation. Organizational design, key success factors, examples of in-bounding of innovation and learning’s will be discussed.

Investing in Innovation

In today’s fast paced market, companies are rewarded for being able to deliver innovative products faster than their competitors. As the need for shorter cycle times increases, it is becoming more important for companies to develop ways to decrease cycle time within product development and to look outside their organization for technology that will allow them to create new and compelling products/services for their customers. As a result, companies are creating groups within their organization specializing in driving innovative products to market. Further, companies are beginning to embrace all aspects of the concept of “Open Innovation.”

Motorola has groups focused on both internal and external innovation. This presentation will give a high level overview of Motorola’s activities in both internal innovation and external “Open” innovation. Time will be provided for discussing:

• Key Success Factors

• Organizational Structure

• Key Learnings

Implementing World-Class Open Innovation to Drive Growth

Can open innovation take you from a 3% growth rate to a 13% growth rate in 3 years? Yes, it can, and GSK Consumer Health’s experience proves it. Join Jo Mohr as she describes how GSK combined a HUB office structure with the “Want, Find, Get, Manage” Model® to change corporate culture. She will share how “not invented here” syndrome was replaced with a totally new way to drive innovation through the ‘Fusion’ of internal colleagues with the outside world. Revenue growth is only one measure of success. GSK’s metrics on time to decision, perceived responsiveness to market, productivity and inclusion of staff in decision-making tell a compelling tale. While the transition from internally-focused to externally-focused was not easy, the rewards are real.

Developing an Open Innovation Strategy

Open innovation for many organizations shifts focus from narrow, internal solutions to the varied solutions offered by the growing marketplace of ideas. Moving an organization to taking advantage of these new and numerous opportunities requires change in strategy and structure. QTG/Pepsico R&D has begun this journey of change.

Key challenges have been:

• the development of organizational structures and culture that will actively insource ideas and technology

• managing multiple, simultaneous idea evaluations; and

• balancing the sourcing of strategic needs and unexpected opportunities.

QTG will become known as a preferred alliance partner, whether involved with small companies/entrepreneurs or large/current suppliers. Our strategy will evolve to focus on the collaboration methods that create the highest value for both partners.

Standards and Intellectual Property: Strategies for Complying with One While Protecting the Other

Standards are increasingly important in today’s global economy. Many government procurement guidelines require compliance with certain standards, and participating in standards setting activities can be critical to a successful product strategy. However, the intellectual property terms associated with contributing to a standardization effort can have far reaching results. It is important that executive management understands when standards are important and how to protect their company’s valuable IP while participating in standards related activities. During this interactive presentation, Michelle Lee will cover the following topics, and answer questions related to your specific standards related issues:

• What are standards - open standards v. open source

• Standardization strategies

• Standards and the development process

• Protecting IP during standards setting activities

Open Source Software: Overcoming the Challenge of Developing in a Mixed Open Source and Proprietary Environment

The use of open source software in the IT environment and in software in general is becoming increasingly widespread. Open source software is not just used in desktop applications, but is embedded in a wide array of consumer products, from refrigerators to cell phones. Executive management must understand the basics of open source software, including when the use or distribution of such materials or products could affect their company’s patent portfolio or other IP.

This presentation will cover the must-know aspects of open source software, including:

• Why you should care about open source issues

• Managing the use of open source tools and materials in the development of products to be distributed under non-open source licenses

• Managing the development of non-open source products for open source platforms

• Managing developer exposure to open source code

• Bridging the Gap – working in mixed open source and proprietary environments, and a summary of the GPLv3

Relationship to Partnership (R2P) - A Reality at Satyam

Product design in itself is complex and co-developing products can only happen by design and not accidentally. It begins with a mandate and a mindset to do this. Once the buy-in is established (What?), next step is essentially a planning exercise (How?). On most of the occasions there is a fair amount of confusion on both these elements. “What” is essentially is decided by the organization based on core and adjacencies. This is a function of time as what is core to an organization at one point in time may not remain so over a period of time. “How” is the portion that addresses an implementable plan comprising at a top level four basic elements namely:

(a) digitization,

(b) common language and initiatives,

(c) meaningful metrics, followed by

(d) globalization.

Subsequently, competency enhancement and Centers of Excellence pave way for the maturity over a period of time.

Becoming OEM of Choice in a
Constrained Supplier Base

Commercial, Business and General aviation manufacturers are experiencing unprecedented growth. Most OEMs realize that the traditional model of vertically integrating the supply chain isn’t cost effective, and at the same time, competition for talent is increasing. This has resulted in strategic outsourcing, and more recently in partnering for design services as well as manufacturing.

As the major Tier 1 and 2 suppliers have been consolidating to meet the growing demands of a select few OEMs, the competition for suppliers / partners has become fierce.

Hawker Beechcraft (HBC) set out to become the “OEM of choice” within the tier 1 & 2 supplier community by using collaborative product development within an Alliance Framework. As an OEM -- accustomed to working alone -- it was necessary to:

• Define “What” the expectations were, to ensure alignment between internal functions

• “Find” the Tier 1 & 2 suppliers with the right capability and capacity

• “Get” the selected partner secured for a long-term relationship

• “Manage" the relationship using a documented framework to focus decisions and execution on end-customer value

By following this process and identifying the partnerships that would (or would not) work, HBC was able to minimize the investment of the suppliers and gain advantage for future opportunities.

Building Effective CoDev Alliances - Partnership Selection, Evaluation and Relationship Management

The traditional approaches alone, growing companies either by internal product development and/or through acquisitions, are no longer adequate in today’s environment. In supporting and executing strategies that leverage Open Innovation practices through the formation of powerful relationships with external entities, revenue growth for firms will result. Accessing technology and business models early, creating options and flexibility for the future, can provide a competitive advantage for the firm.

Over the past few years, Kodak has undergone a monumental transformation from analog (film) technologies to a digital world –- one of complete internal vertical integration to a world where the boundaries between the numerous players are not always crisply defined. Hence, the ability to efficiently and effectively build strong alliances is critical.

So how does one go about building effective alliances? How are the right partners selected and evaluated? How should one measure success along the way? How does an entire culture become more open and externally focused? What are some examples of success? These and many additional questions relating to building external alliances will be addressed during the session.

Finding the Right Partner

Partnering with external companies to drive identification, development and commercialization of new products and services is no longer a competitive advantage but a competitive necessity within many markets and industries. With the marketplace for new technologies and products changing at an unprecedented speed, as well as the increasing costs of doing business, few companies can develop innovative new products quickly enough on their own. The question today is not whether to co-develop, but instead, how to do it well.

Partnering for co-development can dramatically grow the capability of your organization to quickly deliver profitable innovation. It can also create greater opportunities for breakthrough leaps in leveraging technologies against customer needs and wants. Partnering can open the door for expansive new business models – including new classes-of-trade, aisles and consumers – that you wouldn’t be able to do otherwise. Finding the right partner can be a journey in and of itself – creating questions, uncertainties and challenges within your new product development process.

This presentation will address what it takes to get the right partner, including:

• Strategy Assessment (truly knowing your end in mind, assessing your needs, how to enable your organization to be a good partner)

• Nuts and bolts process of getting the partner (key criteria for selection, identifying issue areas, creating “win/wins”, frameworks and principles for structuring the relationship, creating shared ownership and accountability)

• Setting up for executional success (getting projects off on the right foot, establishing trust, creating venues for strong communication, defining metrics and driving performance)

Optimizing Open Innovation Initiatives

Through its General Mills Worldwide Innovation Network (G-WIN), General Mills is building relationships that are enhancing, complementing, and accelerating existing innovation programs. While external partnerships are not new to General Mills, the more focused effort to build a formalized program has taken the external initiative to new levels and has created unique business opportunities for the company.

This presentation will address the ways in which the G-WIN team has evolved and optimized its approach to open innovation over the past few years. This presentation will cover lessons learned – from both project successes and project challenges – in the areas of:

• Organizational structure: building stronger internal alignment and relationships to improve the odds of success of external partnerships

• Corporate culture: creating a portfolio of external tools and resources to support a broad range of business needs and opportunities across the organization

• Partnership selection: evaluating partnership opportunities for the strongest fit and best potential to create unique business relationships that benefit both General Mills and its partners

Executing and Implementing Alliances:
The Challenges

The pharmaceutical industry, like most industries, needs a flow of new products to remain financially healthy. Given the complexities of human disease, the highly regulated business environment, the high risk of failure and the tremendous costs of bringing new products to patients, sourcing new products from internal efforts is not sufficient to sustain growth. In addition, the biotech industry, which emerged in the 80’s as a focused R&D business model, often doesn’t have the infrastructure or expertise to engage in the costly late stage development and commercialization. These two dynamics have led to a natural progression of alliance formation.

The more typical alliance of recent years is one of both co-development and co-promotion, the later being used by the biotech industry to build their commercial infrastructure and to gain experience often at the cost and oversight of the pharmaceutical partner. This broad sharing of work and costs, along with the necessary governance, has come with multiple challenges in execution and implementation.

What are some of these challenges? What approaches are used to help mitigate these challenges? How do we manage consistently across the multiple alliances that exist? What has not worked? These and many additional questions relating to executing and implementing external alliances will be addressed during the session.

Applying the Open Innovation Advantage to Build New Business

How can a Fortune 500 company apply open innovation concepts to build an entirely new business within an existing global business? Martha will share the open innovation strategies and tactics used to establish the Advanced Materials Business at Air Products and Chemicals, Inc.

Using case examples she will:

• Present three very different and recent examples of how to develop new offerings based on open innovation; including what worked and what didn’t.

• Outline methods used to address risk and manage options in an open innovation portfolio.

• Discuss the best practices Air Products has found to be necessary to operate and be successful developing new offerings and new technology in an open innovation environment.

In closing, Martha will share some advice about how big companies can innovate successfully with small companies.

Focus on the Baby, Not just the Wedding
10 Factors for Success in Co-Development / Open Innovation

Drawing on experience in negotiating and managing a range of co-development and open innovation initiatives, Dr. Lukacsko will share what she has observed to be key lessons learned. In addition to presenting 10 critical success factors drawn from her Open Innovation implementation experience at Church & Dwight, she will also examine key areas that small to medium sized businesses must consider before embarking on external innovation including boundaries, alignment and due diligence. Dr. Lukacsko will also highlight tools to help you manage co-development decisions and relationships effectively.

Leveraging Partnerships When M&A Impacts Internal Resource Capacity

When a small (300 employee) Specialty Pharma Company wants to develop a medical device capability to control the direction of its pharmaceutical delivery device needs, it looks to development partners for the detail design and manufacturing of those medical devices.

When unexpected M&A left just a few key design architects of the product, the new company had to leverage partners’ resources to develop multiple products in a short period of time. Mr. Montgomery will address how the strategy evolved, the key decision points and lessons learned throughout the co-development process.

Specifically, he will examine:

• Device Strategy / Startup

• Selecting a Design Partner

• Product Definition

• Detail Design and the Split of Responsibilities

• Selecting a Manufacturing Partner

• FDA Approval and Product Launch

• Lessons Learned

From China to Canada.
From San Diego to Israel.
Spanning the Globe for Co-Dev Partners

A story of two new products set to launch in 2008…involving global partners that include: an industrial design firm, based in Toronto, working with us in San Diego; an Irish owned, Shenzhen, China-based manufacturer; a Boulder, Colorado partner; a USA company, owned by a Croatian and finally, another Chinese manufacturer.

It’s not a spy novel, not a movie…but for innovators maybe more fun!

Two new product paths, from very different sources – for WD-40, a potential partners’ location is secondary to it having the right attitude. We see one market...it is global.
We see one source of supply...it is global. We see one partner pool ...it is global.

Learn how a small company leverages world class partners. We will never be the biggest client… but we can aim to be the best. The keys to successful co-development efforts lie in selecting the right partner for the job, setting clear expectations, and managing through inevitable delays and hiccups.

Mr. Milner will discuss lessons learned and shared from WD-40’s journey down the Co-Development trail with multiple global partners.