How to reduce cost of Open Innovation

One of the assumptions when firms start open innovation is that it will cost less compare to innovating in-house, and this assumption is mostly true.  The subsequent question however is can Open Innovation itself be cheaper than what it costs today?

The primary cost of Open innovation can be divided into two main buckets.

Cost bucket One – In-house team which takes care of coordination with intermediaries and internal technology team.

Cost bucket Two – Intermediary costs.

For the cost bucket One, 3 key pointers to reduce cost

1) Avoid too many dedicated persons handling Open Innovation, instead time share, say 10% of the time of highly motivated people, who love innovation and would happily give that extra time and energy.

2) Have central budget for Open Innovation; this will offer prioritization decision in the hands of Open innovation team who will take decisions after hearing the ROI pitch from the technology requester team. This is a big cost saver.

3) Define Goals, it is tough to define Goals in innovation, so define goals for processes, for number of interactions, even number of failures. (Must fail 2 more time, nice!)

For the cost bucket Two, 3 key pointers to reduce cost

1) Avoid consulting cost, trust me consulting is overrated and overpriced. You might need consulting in some cases but when you need and how much you need must be scrutinized.

2) Shop around, you might be comfortable with the vendor you are used to work with, but don’t forget open innovation is all about trying out new avenues, apply this logic to vendor selection also. You might be able to see cost reduced to half, while outcome remain comparable. Try ideaken !

3) Make some of your fees to Intermediary linked to shortlisting of the solutions.
Where there any other points which worked for you in reducing the cost of Open Innovation. Do share.

Diversity - hard to define, but has pretty good impact on business & innovation.

When you come across someone very innovative or creative, most probably you would be looking at an intersection of abilities and the breadth of knowledge. If you zoom out a bit, the communities which are rich in diversity are also fun to be in. Take it to another level and you will find companies which are most innovative are also the ones who support diversity – not by chance but pretty much by design.

However diversity is not an overnight change which you can bring into your community or a company.

Let’s examine ‘Why’ diversity has such positive impact and ‘How’ you can make sure you are not leaving this important aspect unaddressed and how you can benefit from it in your quest for the business growth and innovation.

WHY (diversity has positive impact)

a) It all starts from a very unique environment and culture we as individuals are brought up in . The world is so big that no single community can survive with the same outlook, practices and tools. This  localized and trapped knowledge is pretty much accessible via the people who move around the world.

b) Heard of bio-mimicry, the science of looking at nature and solving problems not related to nature or taking an inspiration and innovate. Diversity is a tool using which one can think from different perspectives, which as we all know can result in inventions.

c) Most probably your company strategy is somewhere trying to capture the long tail of a market, you probably need a similar strategy for your research and development activities, where you can reach out to the long tail of talent, the just in time, and the right match and just for the period you really need it.

HOW (you can promote diversity)

a) Companies do not have a bias in their hiring policies, but the person in control could pretty much influence the not so diverse hiring, best place to retrospect. Though one way to bring in diversity is to bring in people from diverse background, another important way is to reach out to them and engage with them in a mutually beneficial way for a short duration of time.

b) Apply tools which bring in diversity, talk to the wrong people (assuming you have already spoken to the right people!), pick the odd country and imagine your product and services there, may not be for your expansion but just to get away from stereotype market you see around you. You may not be able to build a machine which flies like a bee, but you will surely find an idea for improvement, get inspired, and possibly get close to where you want to be.

c) Long tail of a talent match is all about spreading it wide and letting the receiver decide if he or she would like to engage.  Diversify from your conventional methods of engagements; the good news is it does not cost the earth in this connected world.

ideaken enables your engagement with individuals from diverse geographies, connect to the perceived wrong set of people and engage with someone who could be at the long tail you are after!

What can innovation seeking enterprises DO with LEGO set manuals?

LEGO pieces can be converted into far more variety of structures in addition to what is given in its manual. The outcome is usually unusual, and ranges from having no significant beauty to having an extraordinary beauty which has not been created before; and an originality which could carry a class and a value of its own.

Seems quite obvious. Let’s examine it a little closer and see what goes on to make this obvious - the obvious.

1) The child or a parent needs to think that maybe she should try to build something without referring the manual. (Innovative organizations always have involved leadership who understands the unstructured nature of creativity and facilitate this direction.)

2) The child might behave clueless at first, but show him once even the three piece structure done without the manual and see how she takes it further from there. (Besides providing vision, leaders know the importance of enablement.)

3) You won’t fail to notice the pride in her voice when she finally shows it to you. (It is of utmost importance to encourage and reward the effort, in however small or insignificant ways.)

4) You have kept the manual and she does refer it for the fundamentals like - what fits where, once in a while. (Building innovation culture efforts does not need to change the ways you run your company, however it might need a tweak here and a tweak there.)

Hiding them occasionally is what innovation seeking enterprises can DO with the LEGO set manuals.

ideaken team can help your enterprise in planning & implementing points 2,3 and 4 mentioned above and benefit from the power of co-creation and open innovation.