Making Open Innovation a Reality Some Practical Approaches and Experiences Mike Hield Chief Executive IXC UK Ltd

Connecting Innovation For Business Growth Some Challenges of OI The IXC approach Use of Intermediaries Some practical examples Improving Serendipity

Decimate Collaboration times. Connect internal programs to external networks, whilst preserving anonymity. Accelerate innovation and product development. Securely access external IP and find better ways to exploit their own. Helping companies to Knowledge Dating Agency Effective Serendipity

Barriers to Innovation Make Time for Serendipity

Innovation ? Considered imperative for competitive advantage 38% of UK enterprises engaged in it A contact sport in which collaboration is essential We dont know what we dont know We will fight our battles not on the low road to commoditization, but on the high road of innovation. Howard Stringer, Chairman and CEO, Sony You can only win the war with ideas, not with spending cuts. Klaus Kleinfeld, President and CEO, Siemens AG4 Essential Serendipity

Connecting ideas with the right technologies and capabilities. Invention + Enterprise = Innovation Innovation?

Connecting ideas with the right technologies and capabilities. Invention + Collaboration = Innovation Innovation? The game has changed Thinking in Other Peoples Boxes

Closed Innovation Principles Open Innovation Principles Hire the best people so that the smartest people in the industry work for us Not all the smart people work for us – we need to engage with the best inside and OUTSIDE our company To bring new products to the market we must discover and develop them ourselves External R&D can create significant value; internal R&D is needed to claim some portion of that value We need to discover it ourselves to profit from itWe dont need to originate the research to profit from it The company that gets an innovation to market first will usually win Building a better business model is better that getting to market first Industry leaders in R&D investments will discover the best and most ideas, and will come to lead the market as well Companies that make the best use of internal and external ideas will win Control intellectual property to ensure that competitors do not profit from our ideas Source: Henry Chesbrough (2003) Company can profit from others use of our IP and we should buy others IP whenever it advances our own business model. The Lab is our World The World is our Lab

Concerns about the protection of IP Is it: –protected and at what cost? –worthwhile protecting? When do you know this? –adequately protectable? Fear of IP Contamination Difficulty in identifying suitable partners/networks Lack of trust between external parties Problems in managing relationships between potentially disparate cultures/scale of operation/clock-speed Need to find appropriate doors and help in Interpretation. Open Innovation Constraints

The trusted Go-Between The InnovationXchange IXC UK Providing confidential links to extensive external networks around the globe Connecting the brightest and best Embedded Serendipity

The Prize Something special happens when intermediaries are embedded : Creativity - the spark of innovation - and a sharper edge to internal processes Smart observation by, and a technical sounding board with, a commercially astute highly motivated go-between Better Collaboration Faster

Business information

Important Features International Network – Local Access Embedded Go-Between Confidentiality & Ethics Commercial Neutrality Proven Process Potential for Client Anonymity Practical Serendipity

OI In Practice £60m per annum new collaboration for £6k advice – accelerating product launch by 18 months – nutraceutical development New product sector created from unattainable packaging technology solution – food-pharma link Rail/Aerospace technology transferred into medical devices creating new products and re-engineering existing Mining industry solution adapted to food manufacturing applications Clever corrosion resistance ideas harnessed by oil/gas industry Pharma Manufacturing technologies re-applied in food processing Archaeology department linked to automotive manufacturer Old Aerospace technology solves Railway problems Healthcare trust finds new ways to reduce costs and learn. 4x impact of other innovation initiatives

OI Key Lessons OI is an innovation itself Role of effective and Trusted intermediaries Appropriate form of IP protection Realism in expectations of fortune generation Importance of SME sector – how to be open Speed to Market

OI Key Lessons OI is an innovation itself Role of effective and Trusted intermediaries Appropriate form of IP protection Realism in expectations of fortune generation Importance of SME sector – how to be open Speed to Money Create appropriate OI culture, skills, procedures and motivation

Specialist Innovation consultants/brokers/networks Virtual networks and data-bases/exchanges Technical research associations and providers University commercial exploitation managers General management consultants Incubator and science park managers Business service providers – accountants, lawyers, etc. Marketing services providers Business Links - MAS Old friends and friends-of-friends. Intermediary Sources

Innovation is a contact sport Virtual networks – generally in public domain Play in the right leagues – comfort/trust Who generates the creativity? How far can they really be trusted? Blend of technology understanding and business connections – how current is expertise? Problems with Intermediary Services

Keys to Success What are your real expectations? Ensure Focus, Fit and Experience How do you measure success/failure? Use a proven process/network What happens when trust/confidentiality is challenged? Intermediation is only part of the solution Talk to me !

Those that live by the sword …. will be shot by those that dont! Gary Hamel Harness Serendipity A Final Caution Why Innovate?