change management

5 Reflections on Open Innovation

What is the big buzz about open innovation? What’s the big change? The subject was discussed at the Connecta 2010 Congress in São Paulo and at Stefan Lindegaard´s workshop (during The Hub SP Winter School). It´s been approached in books and web communities and accounts for more than 12 million links at google search. Here are some thoughts about the theme from the last few weeks.

Social network mapping by Felix Heinen
1. All innovation is open. This conception was clear both in the speech of Matthew Heim, CEO of NineSigma, at Conecta 2010 as in Stefan Lindegaard´s.

Today open innovation has become a “buzz word” because new online tools have opened up possibilities that where not devised before, but in a few years all innovation will be open, or connected, as Jeff Bellairs, director of General Mills worldwide Innovation Netwwork, puts it in Lindegaard´s book. In addition, all innovation has always been somewhat “open”, since it requires a huge range expertise to be implemented. The mith of the Genious is far behind, we all know innovation is in most cases a collective achievement.

The difference nowadays is the availability of new mechanisms for building conversation networks around innovation. There are far more sophisticated ways of searching, connecting and managing such networks. Any company that has a well defined innovation question, a good “Elevator Speech” (making its innovation vision clear) and the right tools can have access to virtually any connected professional in the world. (That is not enough to keep an innovation network alive, but it might be a good start).If each person is a portal as Augusto de Franco put it during Conecta, the possibilities are endless.

So although basic characteristics of innovation, such as the need to coordinate a diversity of players and the inevitable stumbles inherent to the creative process, are the same, there is a significant increase in the complexity and connectivity of innovation networks and of organizations themselves. New questions emerge in this context, such as how to stimulate agents to connect and generate value in an innovation network and how to deal with and profit from these new possibilities. Open innovation potentiates the creative capacity of individuals and organizations, but it is a new way of discovering, relating and doing business.

Perhaps the big issue is creating a management paradigm to fit such a connected business environment. The verb manage has to be reinvented to deal with elements such as control and instability, creativity and organization. Innovation lies at the edge of chaos but it takes very wise management to deal with the paradoxes inherent to this state. Who is ready? How will partners in a network collaborate and deal with power relationships, for example? Which network patterns will emerge from open innovation?

2. It must start at home. One point that is placed as a success factor by several experts and case studies is to start articulating the organization’s internal network. It may seem trivial, but creating a network culture in which the relevant innovation questions can be shared with staff members and direct partners is a big issue.

The lives and conversations inside companies are still largely organized into “clusters” (work areas, processes) and it is difficult to visualize the larger map of innovation when time is short and accountability for results relentless. One must deliver the planned. How will organizations deal with emerging issues that change nonstop?

In this sense there are great challenges in terms of culture and organizational environment, such as to enable engagement in innovation projects (not only those projects that are already the responsibility of each one), to open space and to recognize that engagement. Most organizations are still far away from a “project” culture, where one can engage by his or her own desire to put to use the top of one´s knowledge. How will that be proposed to the external network if it is not the proposal internally?
3. Networking is bonding. There is a good discussion about how to promote the engagement of different actors in open innovation. There are two clear paths, and in Matthew Heim´s vision they are complementary. In the first case, actors enter the network to help answer a specific innovation question. In the second case, a permanent network is formed, and individual actors have a lasting bond.

There’s a difference between these two paths. In the first case, thinking of network management can make sense: you need to manage the innovation questions and the actors that can help solve them.

But in the second case, who manages the permanent network if each organization is (at principle) just another actor? And in the case the network is managed by a big company, how will creativity and self organization emerge? How will power affect the development of fair share relationships, as Umair Haque suggests in his behavior innovation approach?
Sustaining a permanent network implies network ethics. Today it is very common for large corporations, for example, not to respond to work proposals developed by their partners. Imagine how this behavior would be seen in a network, where spontaneous contributions among agents is what brings value to reputations.

Relate this to the theme of “being the preferred partner,” posted by Lindegaard in his book, and imagine how network relations represent a change for organizations. It must be a new way of living if you really want to have it in its full potential.
4. The network builds on diversity. Venessa Miemmis, who defines herself as a digital ethnographer, provides some inspiration to think of win-win relationships not as equality, but as something to be built from the different roles that actors play in networks in which they participate.

Venessa has posted a very interesting chart about the different roles that actors have in networks (which was deeply discussed, if you have the patience to read the comments).

When I looked at the chart I thought about the level of complexity of any sort of “management” or even setup of a network. Each actor takes on different roles in the networks it participates, and those roles change as time passes. To maintain a network with an ecology that allows both the diversity of actors and the diversity of roles played by them is pretty challenging. It is worth reflecting on how this affects  open innovation.
5. Creating conditions to be affected by a network is one of the biggest open innovation challenges. I’ve been reading It’s Alive by Christopher Meyer and Stan Davis where I found a wise statement I play freely: networks make us more sensitive but also more vulnerable to chance.

It is not just a question of demanding solutions from a network, though that can lead to good problem solving. The point is also to improve organization sensitivity and improve the quality of its problem finding capacity. Being connected increases the capacity to perceive transformations in business environment, but that depends on the network pattern you are living. This is about asking and being asked, to demand contributions and contribute as well. That is why understanding network patters will be so important to open innovation.

Finally, a question that maybe just time will respond: will open innovation undermine the organizational models as we know them? How?