Open Innovation: Why mindset matters most

Open innovation

Author: Stefan Lindegaard
Date Published: May 2009

Many of you have brought up the subject of trust in our interactions on open innovation. I agree that trust is an essential component on open innovation. It also comes at many levels – internally as well as externally.Many of you have brought up the subject of trust in our interactions on open innovation. I agree that trust is an essential component on open innovation. It also comes at many levels – internally as well as externally.

I have just been in New York where I attended the World Innovation Forum. It was a great opportunity to listen to some of the best innovation thought leaders in the world, and it was encouraging to hear how they also believe in co-creation and open innovation.

C.K. Prahalad also talked about the value of turning customer transactions into customer relationships and – in the spirit of open innovation – I would argue this focus should be given to the entire eco-system of customers, partners, suppliers and other stakeholders who have an impact on or interest in your company. This brings us back to trust because trust is the basis of any successful, long-lived relationship.

If you are working with open innovation, you should begin to look into two questions:

• What does it take for you to trust others?

• How do you convince your external stakeholders to build trust in you and your company and then start forging strong relationships?

I have long argued that companies should look more at the people side of innovation rather than concentrating all their efforts on processes and concepts. The necessity of building trust as a basis for successful open innovation makes this even more relevant, and it also brings more power to the people who really drive innovation within a company.

Why? Trust is first and foremost established between people and then perhaps between organizations. Trust is a personal thing, and the innovation leaders who understand this are suddenly in a much better position with regards to making things happen and creating an interesting and challenging career.

What are the barriers against building trust and relationships with stakeholders in your eco-system?

• Most organizational structures foster an internal rather than an external perspective.

• Most companies view external partners as someone paid to deliver a specific service rather than a source of co-creation and open innovation.

• Most companies are more focused on protecting their own knowledge and intellectual property rather than opening up and exploring new opportunities. They play defense rather than offense.

• Forging strong relationships takes time and personal commitment. We are just too busy to make it happen and it does not help that most companies do not provide the necessary time, resources, and encouragement to make this happen.

Let me get to the title of this blog post; why mindset matters the most when you are working with open innovation. Some might argue that open innovation is about setting up the right structure and processes within your company. This is important, but you need to understand that nothing will happen unless you have the proper mindset. We are talking about a mindset that understands the value of trust and what this can bring to your business.

What should you do?

The most difficult situation faced by most innovation leaders working with open innovation is that they are alone. This is a new way of doing things, and it will develop many corporate antibodies, who just want things to stay as they have always been.

This is a very normal reaction; many people feel threatened by something that is new and doesn’t seem to match what has led the organization to success in the past. So you do not get much support for this new way of thinking from anyone within your company. They might see this could be interesting but once they begin to understand that you have to make significant changes in the way you are dealing with external stakeholders, they begin to raise obstacles rather than see opportunities.

You really need to start a small revolution from the beginning. Doing this all by yourself is an over-whelming task, which is also why you need to start recruiting other people having the mindset – or capable of getting the mindset – that sees the opportunities. You need to find these people, and you need to develop the right arguments to win the doubters over to your side. This involves three organizational approaches that I sum up as TBX:

• T (Top Down) – Get executives on board and require their personal commitment to the innovation activities. Without executive support, no change occurs.

• B (Bottom Up) – Value creation begins with people—one by one, team by team. Nothing happens unless you get employees engaged, involved, and trusting that their voices are being heard by those higher in the organization. If ideas just seem to fall into a sinkhole, never to re-emerge, or if leaders are not able to commit resources to any ideas, you will lose the trust of the employees.

• X (Across) – The biggest challenges will come from the middle managers placed across the organization, because they have a narrow focus on their own profit-and-loss responsibility. They do not see the full picture, and thus will not give up resources when doing so does not benefit them in the short run, even though it is the right thing for the company in the long run. If not dealt with appropriately and effectively, they can bring innovation to a grinding halt, which will destroy the trust of both executives and those doing the actual work of innovation.

As we move towards open innovation, we should consider adding another factor: O (Outsiders). External partners will bring knowledge, skills, experience – and demands – to your organization.

Three questions are very important in this phase:

• Who are your key internal and external stakeholders?

• What are their personal reasons to either back or block your efforts to develop an open innovation culture?

• What can you do to turn stakeholders into backers of your initiative?

One important approach is to find the examples and thus arguments that relate to their views and perspectives of the overall situation. Once you have a better understanding of their reasoning you can begin to develop the cases and arguments that make them understand that open innovation is beneficial for them on a personal level. Once you get enough people on board it becomes easier to use arguments that are more directed to a team, division or even company level, but until then you should focus on the personal arguments.

During this work it is important to remember that small wins can help you get the movement going. It is also okay – perhaps even preferable – to start below the radar, but prepare to move fast once you get to the tipping point where things can happen really fast – if you just give the right people the right push.

When you have recruited enough people with a proper mindset, then you have laid the foundation for trust, which in turn makes everyone accept that strong relationships are the key to business success in the future. Now you are ready for open innovation.

Unfortunately, it is my experience that few companies have laid this foundation, and this will not happen unless you become successful in recruiting the right people with the right mindset. You can more or less just forget about processes and concepts because when it comes to open innovation it is the mindset that matters the most. If you get the mindset right, the implementation of processes will be so much easier to deal with.

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