Introduction
Open Innovation involves organizing collaboration between companies, across the value chain, with customers, such as municipalities, schools or hospitals, and with knowledge institutes. The goal is to jointly create generate valuable innovations: new products, services, strategic collaborations or business models.
Several Lighting Clusters participate in the SSL-erate project: Cluster Lumière, Cluster d’Il-Luminació de Catalunya, the Danish Lighting Innovation Network, Groen Licht Vlaanderen, and Luci in Veneto. These Lighting Clusters have organised a series of Business Development Experiments. These are practical ways to organize Open Innovation.
The need for Open Innovation
State Lighting (SSL). We will not be able to capture the real potential of intelligent SSL solutions if we stick to the ‘current business’ and doing ‘more of the same’. We need to explore and create radical innovations to realize the potential value of SSL. We can use SSL to create new business opportunities, by focusing on improving health and wellbeing, and on developing green business growth—see Figure.
To develop such radical innovations, it is crucial to understand the needs of potential customers and users. We need to facilitate open dialogues and jointly explore and develop new products and services. Such dialogues need to involve companies across the value chain, and institutions, governments and municipalities, which can act as launching customers.
A mini-quiz:
- Do all the smart people you know work within the organization for which you work? No?
- Does your organization have all the resources that you need for its/your ambitions? No?
If you answered ‘No’ for both questions, you are ready for Open Innovation.
Benefits and challenges of Open Innovation
- Use knowledge and resources of, e.g., from experts, suppliers, customers or users (‘outside-in’)
- Use sales and distribution capabilities of other parties, e.g., to serve ‘new markets’ (‘inside-out’)
- Opportunities to create a ‘new market’: collaboration between suppliers and customers
- Combining one’s own knowledge and competences with others’ knowledge and competences
- Faster or better innovation process by learning from others (‘lessons learned’, ‘best practices’
- More efficient and effective innovation process, e.g. by sharing costs and/or by sharing risks
Challenges: To facilitate communication and collaboration
- Less control over the innovation process; other parties are involved and also exercise control
- More complexity, e.g. regarding management, control, governance, and leadership
- Risk of ‘loosing’ valuable information or intellectual property to others—unintended, of course
- Difficulty of aligning different innovation processes, e.g. vis-à-vis ‘Closed Innovation’
- Resistance… e.g., ‘Not Invented Here’ (‘outside-in’) or ‘Not Sold Here’ (‘inside-out’)
- Various challenges in communication, collaboration, transparency, and making agreements
What is Open Innovation?
- Using scientific knowledge and customers’ ideas concerning ‘green business development’ and/or ‘lighting for health and wellbeing’
- Inviting and using input from ‘lead customers’, e.g. cities, local governments, schools or hospitals, or from ‘lead users’, e.g. citizens or the people working in schools or hospitals
- Articulating and sharing ‘lessons learned’ and ‘best practices’ in collaborative innovation within and between the participating local lighting clusters.
- Co-branding, e.g. combining the identity and communication of a city and a company, as a way to highlight the potential synergies between various interests and actors.
Typically, there will be different partners with different backgrounds, roles and interests, e.g., from the supply side as well as from the demand side who share a common goal. They collaborate to solve a specific problem, to seize a particular opportunity, to create something new together, e.g., a new product, service, process, or business model. They collaborate to achieve something that each one of them could not have done individually.
Open Innovation can make the innovation process more effective and efficient, and it also poses challenges regarding communication and collaboration.
Business Development Experiments
- One or more companies, e.g., a developer and a manufacturer—in order to develop and manufacture the product or service
- One or more launching customers, users or distribution channels, e.g., a hospital, city or an architect office—in order to learn about their needs
- One or more knowledge institutes, e.g., a university department—in order to access and apply state-of-the-art scientific knowledge
The goal of these Business Development Experiments is to innovate collaboratively and to accelerate innovation in SSL. Based on a series of BDEs, we identified several critical success factors.
Open Innovation Toolkit
This Toolkit aims to support businesses to organize successful Open Innovation projects. It covers both ‘soft’ topics, like relationships, communication, commitment, trust, and innovation and creativity (pp. 34-38), as well as ‘hard’ topics, like strategy and goals, selection of partners, structure and governance, contractual arrangements, and evaluation (pp. 39-43).
At the heart of the Open Innovation Toolkit is the Open Innovation Project Canvas (pp. 19-30), especially developed to support companies in organizing collaboration in Open Innovation.
Download the SSL-erate Open Innovation Toolkit here.
Open Innovation Project Canvas
Instructions for using the Innovation Project Consortium Canvas:
- Start with the Idea (A)
- Work in parallel, and iteratively, on:
- Market / Demand Side (B)
- Value Proposition (C) and Project results (D, which is a more practical and short-term a derivative of the Value Proposition)
- Collaboration (E), e.g., a consortium, partnership or network during the project (which may be different from the entity that will produce or market the product after the project)
- Identify and monitor critical relationships between B, C, D and E, e.g., between a key customer’s key pain, and a key element of the Value Proposition, or a key Project result, key activity that is needed for that, and a key partner.
- Identify and balance what each partners aims to bring to the project, and to get out of it (F)
- Articulate questions about the demand side (G) and discuss ideas for marketing (H)
- Discuss how to use the project’s results (I) and how to create a business after the project (J)
Background information
The Open Innovation Project Canvas is distinct and complementary in the following ways:
- It focuses on collaboration it has the collaboration as focal entity (rather than having one key actor as focal entity, as is typical in BMG)
- It focuses on the first phases of innovation, e.g., from idea to prototype (not on operations, after the innovation project, as BMG typically does)
- It focuses on project results, e.g., a prototype (in addition to VPD, which typically focuses on a finished product and its production and delivery)
- It focuses on the project results’ value and identifying a party that can use these (in addition to VPD, which typically focuses on the finished product’s value)
