Which is the right method for open innovation? Which are the criteria to plan an open innovation project? Which intermediary or service provider has specific knowledge and expertise in, e.g., crowdsourcing, the lead user method, Netnography, idea contests, technology scouting, or broadcast search?  Weigh the pros and cons of turning to a technology provider to help solve your OI needs Understand the landscape of open innovation intermediaries and platforms Make the most of your investment in an OI platform

1. Jose A. Briones, Ph.D.
Twitter: @Brioneja
R&D Innovation Strategies & Process Excellence Summit
Berlin, Germany
November 11, 2016

2. www.Brioneja.com
Twitter: @Brioneja
Agenda
 Background
 Open Innovation Services and Software
 Case Studies:
FVA Group of German engineering companies
in the automotive industry – Dr. Frank Piller
Smarty Ears Use of Open Innovation for
Development of iPad Apps
P&G Yesterday vs. Today
www.Brioneja.com
Twitter: @Brioneja

3. Acknowledgments
www.Brioneja.com
Twitter: @Brioneja
 Frank T. Piller
 RWTH Technology & Innovation Management Group, RWTH Aachen,
Germany
 Barbara L. Fernandes
 CEO – Smarty Ears LLC

4. Objective
 Weigh the pros and cons of turning to a
technology provider to help solve your OI
needs
 Understand the landscape of open
innovation intermediaries and platforms
 Make the most of your investment in an OI
platform
www.Brioneja.com
Twitter: @Brioneja

5. Objective
 But which is the right method for open innovation?
 Which are the criteria to plan an open innovation
project?
 Which intermediary or service provider has
specific knowledge and expertise in, e.g.,
crowdsourcing, the lead user method,
Netnography, idea contests, technology scouting,
or broadcast search?
www.Brioneja.com
Twitter: @Brioneja

6. •“There’s a better way for
management teams to grow their
companies. But they will need the
courage to challenge some of the
paradigms of financial analysis and
the willingness to develop
alternative methodologies”
Clayton M. Christensen
www.Brioneja.com
Twitter: @Brioneja

7. www.Brioneja.com
Twitter: @Brioneja

8. The Open Innovation Paradigm
www.Brioneja.com
Twitter: @Brioneja

9. Open Innovation Management
 What are the options to implement an
Open Innovation program?
Go at it alone:
○ Website and social media
Engage an Open Innovation platform
○ Open innovation software
○ Open innovation services
www.Brioneja.com
Twitter: @Brioneja

10. Open Innovation Services vs. Software
 Open Innovation Services offer a
communities of experts in a variety of
fields.
Problems are posted for a fee to get
feedback from the community
 Open Innovation Software/Platforms
relies in the company’s customer base
and a broader reach
www.Brioneja.com
Twitter: @Brioneja

11. Open Innovation Services
 Source: Frank T. Pillerwww.Brioneja.com
Twitter: @Brioneja

12. www.Brioneja.com
Twitter: @Brioneja
Case Study: Piloting open innovation (co-creation with technical experts) in
the German industry
 Group of German engineering companies in
the automotive industry: Suppliers and users
of driving systems (gear boxes, power train ,
etc.), organized in industry association (called
"FVA")
 Many of them are world market leaders in
their sector
 Very engineering driven, successful, very
"German" engineers. Typical example of
"local search" !
 Problem: For some technical problems, they
did not find sufficient solution
 Project with our group: Pilot co-creation for
technical problem solving ==>
“We took some
problems they could
not solve before and
"crowd-sourced" these
problems to external
problem solvers via an
intermediary (broker)”
Frank T. Piller
RWTH Technology & Innovation
Management Group, RWTH
Aachen, Germany

13. www.Brioneja.com
Twitter: @Brioneja Source: David Feitler 2010
In the project, we selected five problems
from companies and the FVA research
consortium to be "broadcasted" by
NineSigma.
Frank T. Piller
RWTH Technology & Innovation
Management Group, RWTH
Aachen, Germany

14. www.Brioneja.com
Twitter: @Brioneja
14

15. www.Brioneja.com
Twitter: @Brioneja
The solutions in general were both from sources new to the
companies and did contain a new technological solution
Evaluation of solution proposals by project steering committees
RFP
Institution Solution Technology
new known new known ?
66198 23 3 16 6 4
66204 10 0 3 7 0
66207 7 0 6 0 1
66201 33 2 22 8 5
Frank T. Piller
RWTH Technology & Innovation
Management Group, RWTH
Aachen, Germany

16. www.Brioneja.com
Twitter: @Brioneja
Return on open
innovation
Data from VDMA project in
textile machinery industry
Direct cost of OI project
€ 18 000 ,- + approx. 2 person
months
Estimated value of realized
solution
€ 375 000,-
ROI : approx. 2000%
Quality of solution:
Fit to requirement: 89% in
average of suited solutions
Frank T. Piller
RWTH Technology & Innovation
Management Group, RWTH
Aachen, Germany

17. Open Innovation Software
 Spigit
SpigitEngage for Facebook,
organizations can engage their
customers in social co-creation by
tapping customer insights through
idea generation, free thought,
campaigns, contests, and game
dynamics.
 Ryma
Ideascope integrates customer
feedback with other systems like
Help Desk, Customer Relationship
Management (CRM), Demand
Management
www.Brioneja.com
Twitter: @Brioneja

18. Open Innovation Software
 Imaginatik
Innovation Central
collaboration platform allows
organizations to include or
exclude whichever groups or
individuals are most
appropriate for the topic
 Nosco
Idea management software
Publish, rate and collaborate
on ideas
www.Brioneja.com
Twitter: @Brioneja

19. www.Brioneja.com
Twitter: @Brioneja
Smarty Ears’ Open Innovation Program
 Smarty Ears is the largest
app publishing company in
the segment of speech and
language development.
 Over 40 total Apps
 Most for iPhone and iPad but
some for Android.
 Promotion is via Social
Media and Website
www.Brioneja.com
Twitter: @Brioneja

20. www.Brioneja.com
Twitter: @Brioneja
How The Program Works
 Just like in traditional publishing,
there are authors to
books/therapy materials and
there are publishers.
Smarty Ears is the App
publisher and the submitter is
the author
 Submitters continue to own the
idea and materials they
provide, and therefore they get
paid royalties for it.
The final application, coding,
and any art work developed
belongs to Smarty Ears.
 Typical contract is 5 to 10 yearswww.Brioneja.com
Twitter: @Brioneja

21. Royalties
 Authors receive a
royalty of 5% to 15%
on all sales for their
app.
 The amount of royalty
is decided based on
 Level of expertise
 Amount of material
provided by you to us on
the creation of the app
 Complexity of the
application.
 Apps have name, bio,
photo of author www.Brioneja.com
Twitter: @Brioneja

22. Program Growth
 In the past Smarty Ears’
open innovation program
was limited
Apps that Smarty Ears could
not do on its own because of
lack of expertise.
 Today the program has
expanded to include apps
that Smarty Ears could do
Looking for submitters that
can devote the time to Co-
development and not just
submit ideas.
Higher probability of success
www.Brioneja.com
Twitter: @Brioneja

23. Benefits of Co-Development
 Submitters are
passionate
about their
idea
They want it to
be perfect
Test with their
heart
Become the
most effective
salespersons
www.Brioneja.com
Twitter: @Brioneja

24. App Creation Flow
 Create mockup
 Create content
Questions
 Select images
 Create flow of product
 Coding
 Bug testing
 iTunes description
www.Brioneja.com
Twitter: @Brioneja

25. www.Brioneja.com
Twitter: @Brioneja
Open Innovation Program
Results
 ~10 ideas for new
apps/month
 1 out of 10 becomes an
app.
 10 new apps are a result of
this process
More apps to market - faster
 Recent app release from
Open Innovation program
“Fun and Functional” is
currently on top 50
educational app list on
iTuneswww.Brioneja.com
Twitter: @Brioneja

26. Program Lessons
 Win-Win Scenario
Not a one-time payment
Both the company and the
submitter benefit from the
success of the product
 % Revenue sharing goes
down if author does not
participate in updates with
content.
Does not include bug fixing
www.Brioneja.com
Twitter: @Brioneja

27. www.Brioneja.com
Twitter: @Brioneja
P&G
 Connect and Develop – Model for Open
Innovation Launched in 2000
 P&G needs are posted on website in classified
categories, and then anyone can propose their
ideas and get assessed by a specialized team.
 By 2006, 35% of all P&G products had an
external component vs. 15% in 2000
 R&D productivity increased 60%
www.Brioneja.com
Twitter: @Brioneja

28. P&G Update –
 P&G CEO Lafley decentralized R&D, making
business-unit heads responsible for developing
new items.
 R&D chief Brown says that inadvertently slowed
innovation by more closely tying research
spending to immediate profit concerns.
 Between 2003 and 2008, the sales of new product
rollouts shrank by half.
www.Brioneja.com
Twitter: @Brioneja

29. Keys to Success
 OI is a way to speed up time to market and increase
probability of success
 OI includes sourcing for products, technology, intellectual
property and ideas.
 OI is NOT outsourcing. OI requires constant interactions
between companies and inventors. It requires huge
partnering capabilities on both sides.
 OI will not decrease a company’s costs – it will only move
it among line items. R&D budget may be less over time,
but Legal and Business Development budgets will
increase immediately.
 Source: Open Innovation – Paradigm Shift or Program?
September 21, 2009 by Suzanne Harrison
www.Brioneja.com
Twitter: @Brioneja

30. Lessons Learned
 Using the right approach
to open innovation is
critical for success
Depends on the type of
problem/industry
 Open Innovation is NOT
a substitute for R&D and
a long-term innovation
program
Must use a non-linear
management approach
designed for radical or
disruptive innovation, e.g.
Spiral Approach
www.Brioneja.com
Twitter: @Brioneja
Resources
Resources
TimeTime
Level
1
2
3
VOC
Idea
Generation
Technology
Assessment
Prototype
Development
Customer
Testing
Business
CaseValue in Use
Analysis Regulatory
IP Strategy
Supply Chain
Analysis
Roadmap/Timeline
Risk Analysis
The SpyroTek™ Method for Innovation Management
Launch
Quadrant I
Quadrant IIQuadrant III
Quadrant IV
Twitter: @Brioneja
www.Brioneja.com

31. Questions for the Panel/Audience
 Q1. What is the "customer job" (Clay Christensen sense)
that needs to be filled by innovation management software?
 Q2. Which employees are "right" for participating in the
innovation process?
 Q3. How do you find high potential ideas from a high
volumes of them?
 Q4. What are some models for engaging employees in a
process that falls outside their "day jobs"?
 Q5. Isn't this a popularity contest for ideas, and what
company would operate that way?
www.Brioneja.com
Twitter: @Brioneja

32. Questions for the Panel/Audience
 Q6. What does it mean to "evaluate" an idea?
 Q7. How to say 'no' to an idea, and not discourage
future participation?
 Q8. What are some best practices for running an
employee innovation program?
 Q9. What about expanding beyond employees,
and bringing customers directly into the innovation
process?
 Q10. Where does a crowdsourced innovation
management platform fit
within the enterprise software ecosystem?
www.Brioneja.com
Twitter: @Brioneja

33. Resources
 Making Open Innovation Work. Author: Stefan Lindegaard
 Open Services Innovation. Henry Chesbrough
 A Guide to Open Innovation and Crowdsourcing. Paul Sloane
 The Open Innovation Marketplace. A. Bingham and D.
Spradlin
 Open Innovation – Paradigm Shift or Program? September 21,
2009 by Suzanne Harrison
 Innovation Killers, 2008 - HBR http://hbr.org/product/innovation-killers-how-financial-
tools-destroy-you/an/R0801F-PDF-ENG?Ntt=innoation%2520killers
 The Market for Open Innovation – Frank T. Piller, K. Diener
 The Spiral Approach to Disruptive Innovation Management.
Jose A. Briones.
www.Brioneja.com
Twitter: @Brioneja

34. Acknowledgements
 Thanks to Smarty Ears, LLC for allowing
me to be part of this exciting new field of
product development
 www.smartyearsapps.com
www.Brioneja.com
Twitter: @Brioneja

35. Contact Information
 Jose A. Briones, Ph.D.
 Brioneja@SpyroTek.com
 Twitter: @Brioneja
 www.Brioneja.com
www.Brioneja.com
Twitter: @Brioneja