While open innovation is a defined concept, its methodology differs based on what companies are using it. Two cases - Inwido and Tetra Pak - take an open innovation approach to solving their internal challenges. Having chosen different approach to implement open innovation practices, both projects arrive to successful outcomes. Success factors for open innovation include involvement of top management, setting clear strategy for openness and participation and creation of open ecosystem. his presentation was held at the "Hands On - Open Innovation" one day workshop arranged by Ideon Open in Lund, Sweden. More information about the event is at http://www.ideonopen.com/events

1. Open Innovation –
Experiences and Success Factors
Lars Bengtsson, Professor,
LTH Faculty of Engineering
Lund University

2. Industrial Engineering and Management at
Faculty of Engineering LTH
• Best Engineering Program in
”Industriell Ekonomi” in Sweden
• Competitive research in:
• Operations Management
– Supply Chain Management
• Innovation, strategy and
business models
– Innovation Governance
– University – Industry
innovation

3. Follow-up and evaluation of two Ideon
Open projects
• An independent follow-up and
evaluation of the Inwido and Tetra
Pak-projects
• Important questions: What are the
experiences, effects and results of
these projects? What can be
learned from these projects?
• Inwido – Documents and post
project interviews with Inwido,
project teams, Ideon Open and
Implement
• Tetra Pak – Documents and
interviews and real-time
observations (project not finished)

4. Agenda
• Brief introduction ”Open Innovation”
– What is it? Why? What forms can it take?
– Are companies using open innovation practices?
– Crowdsourcing and Innovation intermediaries
• The two open innovation cases
– Inwido Compete & Incubate
– Tetra Pak – Can you fold it?
• Success factors

5. Open Innovation
• “Open innovation is the use of purposive inflows and
outflows of knowledge to accelerate internal
innovation, and expand the markets for external use
of innovation, respectively. [This paradigm] assumes
that firms can and should use external ideas as well
as internal ideas, and internal and external paths to
market, as they look to advance their
technology.”(Chesbrough, 2006)

6. Why should companies engage in open
innovation?
• Innovation important
– An important competitive factor in more and more markets
– To influence the development of markets/industries
– Development pace has increased
• Specialization
– ”No company can be good at all things”
– ”Not all smart people work for you”
• Overcome Local search
– Search for new knowledge is costly
– People tend to rely on low-cost knowledge (knowledge they
already possess)

7. Intended effects of open innovation
• INBOUND
• Increase competiveness - accelerate innovation (more and
faster innovation projects), better innovation projects (higher
degree of market acceptance), lower cost of innovation
• New business opportunities – new ventures
• Cultural change - Stimulate flow of ideas from employees,
customers etc and stimulate corporate entrepreneuship
• OUTBOUND
• Increased revenues from knowledge commercialization
(licensing, spin-offs, sale of business units)
• Influencing market and industry development
• Establishing/promoting technical standards
• Marketing, branding, creating buzz…

8. Open Innovation – many forms

9. Most common and important inbound
innovation practices

10. Open innovation partners

11. Open innovation intermediaries with an IT-plattform
and a community and those without a community and
primarily working offline
Ninesigma
Implement Consulting

13. Inwido Compete and Incubate’s goal is to
deliver 5 ideas for Inwido to invest in
”Innovate new applications, products and services
from digitalization of Windows and Doors”
Project Vision - Digitalization
”Involve a broad set of people and organizations
for an intense 10 weeks period of time to produce
at least 5 ideas and teams to go into incubation”
Project Mission – Mix, fast and intense
Project Deliverables – 5 ideas and teams
”Compete & Incubate aims at creating 5 ideas and
teams that develop into concrete products and/or
services based on the theme “Digitalization of
Windows and Doors”.”

14. Inwido Compete and Incubate results
• 15 concepts pitched and ranked
– Roughly half of the concepts could not be realized without the
acceptance and support from Inwido’s retailers and installation
partners
– One concept involved a completly new function and technology
for a window
• 6 highest ranked projects received further
investment in time and money
– 3 projects continued as entrepreneurial start-ups by teams (now
discontinued? Or still some entrepreneurial acivity?)
– 2 projects taken further by Inwido and partners for tests and
verification, (2 discontinued or still some activity?)
• 1 project still being tested and still invested
money into (the highest ranked)

15. Tetra Pak – Can you fold it?
• Intended result – one or more
new folds for current and new
packages meeting certain
constraints (product and process
constraints)
• Global broadcast search mainly to
origamists, industry designers,
mathematicians
• Qualifying competition – 119
entries
• 10 participants selected for two
intense workshops in Lund/Malmö
• 5000 Euros to each and bonus
opportunity for the group

18. Comparing the Inwido and Tetra Pak-
projects
Inwido
• Fairly open call
• Market and technology
challenges
• Rewards - ”no clear prize”
• IPR not regulated
• Many types of project
proposals – high complexity
• Many people in Inwido
involved
• No extra time or budgets for
the open projects
• Projects had varying or unclear
fit with current business model
Tetra Pak
• Selective call
• Only technology challenge
• Rewards – ”5.000 Euros”
• IPR regulated
• Focus on folds only – low
complexity
• Four technical experts directly
involved
• Budget and time allocated for
the project, also afterwards
• Good fit with current business
model

19. Challenges in the two projects fairly well
described in research
• Identifying, selecting and motivating
persons/groups/companies
• IPR (collaborating with ”the crowd” unusual)
• Culture of ”Not-Invented-here” and/or ”Already done it”
• Radical or incremental project (fit with current
business model)
• Integration of open innovation projects –
– Allocating resources and time
– Mechanisms for integration into company’s
innovation processes

20. Bengtsson & Ryzhkova (2013) Managing a
strategic source of innovation – online users

21. Effects and results in the Inwido and Tetra
Pak projects
Inwido
• New contacts and new
network
• Looked at 15 new
business opportunities, 6
more in depth
• PR and marketing
• Cultural change (?)
• Inspiration for internal
projects
• 1 new business venture
still under development
Tetra Pak
• First workshop - group
performed well
• Continues to work with a
dozen folds, some
completely new to TP
experts
• New contacts and new
network
• PR and marketing
• New fold in current product
and new prod’s (?)

22. Success factors for inbound
”crowdsourcing” open innovation projects
(from research)
• Strategic factors
– Top management involvement and support
– Strategy for openness and participation (degree of
openness: fit or stretch in relation to current business model)
– In the long term – develop an ”eco-system for proprietary
and open innovation processes”
• Project specific factors
– Strategic alignment of project
– Clear aim of project
– Internal champion(s)
– Complexity of project

23. Success factors cont’d
• Disclosure factors
– Transparent and relevant incentives for external contributors
(money, career opportunities, stakes in project, fun, personal
development, plattform for opportunities, networking etc)
– IP issues negotiated beforehand (or the process of handling
it) and transparent as much as possible
• Appropriation and integration factors
– Internal champion(s)
– Support to external developers equivalent to APIs in software
– Budget, time and other resources on same terms as internal
projects
– Equal internal incentives for R&D, marketing and sales etc
for projects of internal or external origin