APQC launched the Open Innovation: Enhancing Idea Generation Through Collaboration study to examine the open innovation practices of five leading global organizations: Amway, British Telecommunications plc (BT), Cisco Systems Inc., Corning Inc., and General Mills Inc.
Due to the increasing rate of change in many markets, organizations are seeking new ways to get to market faster, deliver greater value to customers, and more adequately manage costs. This blog post focuses on the motivation behind best-practice organizations’ use of external collaboration.
In the early 2000s, Amway’s senior leadership realized that, to maintain its growth rate, the organization needed to expand its focus to increasing its share of the markets in which it already operated. Senior leaders launched an initiative called Growth Through Innovation, which increased Amway’s focus on developing and acquiring new products. The R&D function was also encouraged to think about innovation in broad terms and re-evaluate how it conducted market research, the processes that guided product design, and how products were packaged. Business model innovation was also part of the initiative, with Amway looking at new ways to market and distribute products and services. Amway could not accomplish its new goals without collaborating outside of its organization.
BT determined that a formal internal innovation team was needed with the resources necessary to address BT’s needs. This team is connected to and services the organization’s business units. BT’s innovation strategy includes obtaining ideas from customers, partners, employees, research, and academia. BT’s research and academic partnerships provide more traditional ways of obtaining new ideas, but the organization has also adopted less traditional methods of sourcing innovation, such as collaboration events and employee competitions.
Cisco’s innovation strategy is, simply stated, to build, buy, and partner in order to accelerate its growth in key markets. The company builds products and solutions, partners with innovative companies, or acquires new technologies and companies. Cisco believes in retaining and integrating entrepreneurial leadership from its startup acquisitions in order to gain a competitive advantage. Cisco is seeking to balance the acts of focusing and leveraging its assets and energy in existing markets with the acts of continuing to push into new areas in targeted ways. If Cisco did not focus on innovation, then from a business standpoint it would not survive in its fast-moving industry.
In the late 1980s, Corning shifted into new market areas, as well as the increased use of external partners that brought diverse knowledge to the company. This diverse knowledge compliments Corning’s efforts and propels new products to market at a faster rate. For Corning, market dynamics are changing such that collaboration is of increasing importance in order for organizations to distinguish themselves from their competitors.
Corning also collaborates with external groups in order to access expertise, equipment, and facilities that it does not have. The benefits of its university collaborations are new knowledge, accomplishing objectives faster, reduced costs, avoided capital expenditures, and the identification of prospective employees. The vast majority of such collaborations are focused on early-stage research.
General Mills’ attitude toward open innovation has evolved within a relatively short period of time. The organization shifted from a culture focused on internal innovations to one that actively seeks innovation both within and outside the organization. In 2004, General Mills launched a record number of new products. However, the organization found that many of the products launched that year were small, close-in line extensions. These products most likely were not sustainable in the marketplace and reflected the organization’s focus on quantity of innovation rather than quality of innovation. General Mills’ leadership realized that it had to get feedback and ideas external to the organization in order to develop products that will be sustainable.
How is your organization collaborating?