Clearly recognized the criticality of Partnering/Open Innovation is a critical success factor for many business strategies. Ad-hoc processes, while effective, are neither efficient nor sustainable and must be replaced with a formal methodology. The proposed method will be focused on current Suppliers but rooted in benchmarked processes of leaders in Open Innovation techniques. The contemplated process will allow for unsolicited proposals from entrepreneurs and be data driven.
The initial framework will employ the WANT-FIND-GET-MANAGE system and require a dedicated staff of professionals to lead the effort. This team will be closely aligned with the RD&E Staff and Global Marketing Council and its sub-councils in carrying out its function.
Partnering/“Open Innovation” - Vision and Strategy
The definition of Open Innovation (OI) is widely accepted to be “a paradigm that assumes firms can and should use external ideas, and internal and external paths to markets, as the firms look to advance their technology” – Henry Chesbrough.
The OI concept, first considered in the 1980s, emerged as a meaningful technology strategy in the middle 1990’s, and has been extensively viewed as a key to successes at companies like P&G, General Mills, IBM and others. OI is based on the firm joining forces with other world-class companies and organizations and sharing resources. Examples include:
- Pfizer and Warner-Lambert joining forces to market Lipitor,
- Clorox developing more than 75% of their innovations with external partners,
- IBM earning $1.2 billion per year out-licensing its technology.
This approach has also been dubbed by academics open sourced innovation or the more recent the more wide-encompassing transformational growth.
Companies practice OI in an ad-hoc manner for years with many products containing some level of third party content. An ad-hoc approach to Open Innovation is neither efficient nor effective especially relative to the refreshed strategy or emerging formal management systems. In addition, the criticality of OI will only grow as pressure to improve productivity increases.