KnowTech 2012 Innovationsmanagement und Social Media - Herausforderungen & Potenziale - Stuttgart, 24. Oktober 2012 Agenda 1. Introduction 2. Open Innovation 3. Open Innovation Tools/ Methods 4. Challenges and benefits 5. Case Study Innovationsmanagement ©2012 Deloitte Introduction Innovationsmanagement ©2012 Deloitte The understanding of innovation is shifting from closed to rather interactive approaches 24.09.12 29.01.12 05.09.11 Innovationsmanagement ©2012 Deloitte Innovation key drivers pose major challenges to traditional innovation processes Innovation Management Key Drivers Decreasing Product Lifecycles Increasing fierce of competition, i.e. through onward globalization and reduced logistic costs Advance of new technologies with disruptive influences on businesses, i.e. RFID, 3g/4g cellular networks Changing customer behavior and needs and increasing customer expectations, i.e. caused by the emerge of web 2.0 media Highly efficient and effective innovation processes become necessary Traditional Innovation Processes Downsides Lack of external partner integration, mostly to stay in complete control of the process, leading to a highly internal view Often isolated R&D units with innovativeness distributed to relative small amount of people Limited incorporation of voice of customer underlining an inside-out perspective Cost intense, lengthy and inflexible innovation process 80% of all new product launches fail within two years (not considering products that never reached launch phase) Increasing opening of traditional, closed innovation processes Innovationsmanagement ©2012 Deloitte Open innovation Innovationsmanagement ©2012 Deloitte Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas in order to advance concepts Innovation Paradigms Closed Innovation Paradigm Company Open Innovation Paradigm Company R&D R&D Innovation User, Consumer • Closed Innovation describes the classical understanding of many companies • Focus is on maintaining control of idea creation, internal R&D and the protection of intellectual property Innovation • Open Innovation describes the integration of various external stakeholders (e.g. customers, consumers, universities, partners, suppliers) into the innovation process • Active, strategic use of external ideas and information in order to enhance potential innovations • Inclusion of external ideas into process of finding solutions to complex customer needs Innovationsmanagement ©2012 Deloitte Despite obvious advantages, the status quo of Open innovation employment is far from mature Current Status of Open Innovation in companies 77% For most companies innovation is the purview of the research and development (R&D) department or the product management teams Seventy-seven percent of product strategists involved in product innovation claim that accelerating the innovation process is a significant challenge Open innovation approaches based on competitions are increasingly effective means of delivering radical innovation Forrester, 2012 Status Quo of Open Innovation Employment within Organizations 19% 17% 2% 19% 61% Mature Expanding & Emerging Experimental Declining Non-Existent Open Innovation Investment Rationale within Organizations Solve business challenges that we cannot solve /resolve internally 60% Foster more collaboration internally among our employees 59% Leverage diverse talent resources (both internal and external) Update and accelerate the ways in which we get product to market Foster more collaboration externally (e.g., to partners or suppliers) 53% Outpace competition 52% 58% 57% It’s an organizational mandate Source: Innocentive 2012, n=229 Innovationsmanagement Source: Innocentive 2012, n=229 13% 0 10 20 30 40 50 60 ©2012 Deloitte Three types of innovation span the continuum from closed to open innovation Closed Innovation Open Innovation Challenges Contributors Control Innovation Type Company Centric Innovation Customer Focused Innovation Stakeholder Centric Innovation Companies use consumer input sparingly, if at all, in their product development processes Companies are passively waiting for consumers to provide suggestions or testing new ideas with them Companies walk hand in hand with all kinds of stakeholders down the innovation path • No external interactions • Total control of innovation process by company • Few interactions with external participants • Tightly controlled by company • Numerous interactions with external participants • Interactions with externals are primary source of value • Can hardly be controlled by company • Employees • (Partners) • • • • • Employees • Consumers • Customers General lack of ideas “Framed” mindset of employees “Not invented here” mentality*: belief that R&D control is crucial in order to develop new products Innovationsmanagement * Source: Deloitte, 2012. Employees (Partners) Customers Lead Users Tendency towards incremental innovation Innovation can be easily copied by competitors • Partners • Suppliers • Universities Choice of adequate method and respective internal organization and implementation of tools for R&D Enabling use of stakeholder insights across the process ©2012 Deloitte Social Media as the major enabler for open innovation Social Media & Open Innovation Social Media is regarded as highly relevant to foster innovation Social Media is considered as the vehicle for open innovation, connecting customer innovators and businesses Leading companies already leveraging open innovation potential via Social Media (extract): Customers as a major source for product innovation 77% decision makers regard open innovation as an essential mandate to their long-term success Importance of Social Media in facing key challenges Customer Relationships 42% Innovation 27% Revenue Growth 26% Increasing Efficiency Risk Management Important 11% Source: MIT Sloan Management Review, Deloitte 2012, n=3478 Social Media application to open innovation processes is ranked 2nd , when rating overall Social Media usage for addressing key challenges 36% 38% 74% regard Social Media as important or somewhat important for Innovation 35% 21% Somewhat Important Innovationsmanagement 38% 38% Employees Acquisition Key findings of study conducted by MIT & Deloitte 28% 22% Neutral Somewhat Unimportant Unimp. & ©2012 Deloitte Deloitte is one of the leading global strategy consulting firms with a broad international Social Media and Innovation expertise Worldwide Presence & International Network More than 195,000 employees in 150 countries More than 50% of the world’s biggest companies work with Deloitte Four service areas Audit Corporate Finance Consulting Tax Leading Global Consulting Firm for Product Innovation Ranking includes the following sub-segments: Research & Developm. Strategy (incl. Innovation Management) Product and Service Launch Operations Product and Service Portfolio and Complexity Management Innovation Maturity Model Framework assesses the current state of innovation programs along four dimensions and 14 subsequent capabilities under each dimension. Deloitte’s Stage Gate Process and Spiral Process for product innovation assessment and implementation Product Development Performance Framework assesses effectiveness of product development in delivering new and profitable revenue streams Proven Product Innovation Methodologies Innovationsmanagement Selection of global Social Media clients ©2012 Deloitte Your Deloitte speakers today Thilo Többens Angela Schmitz-Axe Director Corporate & Market Strategy TMT Industry Manager Corporate & Market Strategy TMT Industry E-mail: [email protected] Contact : E-mail: [email protected] Contact: Professional Background: • 12 years professional experience • Deloitte Consulting, Arthur Andersen, Sal. Oppenheim Focus • Industry: Telecommunications, Media & Technology • Functional: Customer Experience, Marketing, Market Strategy, Market & Business Modeling, Media & Communication, Pricing, Sales Selected Clients Professional Background: • 8 years professional experience • Deloitte Consulting, American Standard Focus • Industry: Telecommunications, Media & Technology • Functional: Social Business, Innovation, Customer Experience, Marketing Selected Clients Innovationsmanagement ©2012 Deloitte 11 With a multitude of publications on Innovation and Social Media Deloitte is demonstrating its thought leadership Selected Innovation, Social Media &Enterprise 2.0 Studies and Publications Profound expertise and proven track record in the field of Innovation and Social Business and Social Enterprise Innovationsmanagement ©2012 Deloitte Open Innovation Tools/ Methods Innovationsmanagement ©2012 Deloitte According to the respective innovation type, many tools/ methods can be applied to foster collaboration within the innovation process Description Closed Innovation Open Innovation Company Centric Innovation Customer Focused Innovation Stakeholder Centric Innovation Internal Collaboration Internal teams with a common vision collaborate in achieving a common goal by sharing ideas, information, tools, experiences and work Co-Creation & voice of the customer Customers are given freedom to express aspirations. A small group of external participants is invited to interact during innovation process Crowd Sourcing Company actively empowers external stakeholders throughout entire innovation process to seek answers from global pool of creative partners 1• Workshops Internal Workshops with internal with experts 4• Co-Creation-Toolkits •7 Social Media Accounts Leveraging the wisdom of the crowd by using Social Media accounts Applicable Tools Focus on developing fast solutions for defined challenges 2• Innov. & Knowledge Community Blogs & discussion boards Internal network of collaborators increases innovation & ability to take advantage of new opportunities 3• Internal Idea Contest 5• Lead User Method Integration of Lead Users* in innovation processes at an early stage 6• Listening Platforms Invite wide range of employees to suggest ideas for strategy, projects, or solutions to particular problems Innovationsmanagement Enable non-specialist users to design customized products Listening to the voice of the customer in an unobtrusive way •8 Private/ Public Community Interacting with crowd in company owned forum •9 Ideation Site Giving stakeholders a place to offer up ideas and suggestions 10 • Idea Contest Requesting solutions to a posed call to action involving incentives * Def. Lead Users: users of a product or service who currently experience needs still unknown to the public and who also benefit greatly if they obtain a solution to these needs ©2012 Deloitte Social media has made innovation easier to implement and more accessible, different Social Media /software can be applied for each method of the three innovation types Closed Innovation Open Innovation Company Centric Innovation 1• Workshops with internal experts Customer Focused Innovation 4• Co-Creation-Toolkits Co-creation Toolkits are user friendly (often internet based) tools, which enable nonspecialist users to design customized products Use collaboration, online meeting, web conferencing & videoconferencing applications 2• Innovation & Knowledge Community Internal onlinecommunity of collaborators increases innovation 3• Internal Idea Contest Use of social media platforms to run internal idea contests to gain ideas for strategy, projects, etc. Innovationsmanagement Stakeholder Centric Innovation •7 Social Media Accounts Leveraging the wisdom of the crowd by using Social Media accounts •8 Private/ Public Community 5• Lead User Method • SM helps finding like-minded, get feedback • Linkedin as starting point to find lead users Lead users face needs that’ll become general in the market place much earlier than others & benefit from solution •9 Ideation Site 6• Listening Platforms Different vendors offer platforms to listen to the voice of the customer on different Social Media sources 10 • Idea Contest Interacting with crowd in company owned onlinecommunity forum with social functionalities Giving stakeholders a place to offer up ideas and suggestions Requesting solutions to a posed call to action involving incentives ©2012 Deloitte Challenges and Benefits Innovationsmanagement ©2012 Deloitte Strategic alignment with corporate objectives is key for anchoring open innovation Initiatives within the organization Strategic Alignment Steering & Resources Align Open Innovation Initiatives with Corporate Strategy • Pursue engagements that align with your strategy and business objectives • Identify the business objectives you want to achieve & determine if open innovation is the right path to pursue • There is no ”one fits all” solution • If you´re in you´re in - do not engage if you are not willing to take external suggestions onboard IP Control Participants Sustainably Involve and Commit Management • Ensure sustainable executive buy-in • Directly involve the executive team in rolling out the concept and ensure participation in the process - either through idea generation or collaborative review of submitted ideas Communication Define Processes, set Objectives and Monitor • Define goals and respective KPIs and monitor weekly and take action if necessary (e.g. # of ideas, # of rated ideas, # of participants, etc.) • Define and establish processes • Drive internal awareness - keeping the subject top-of-mind among employees will help to drive adoption Good practice Description • New Green Tea campaign for Egypt • Clear deduction from company's marketing objectives and strategy Unilever – Lipton idea trophy • Clearly defined goal of ideation • Authentic request for external input - although company is market leader with 60% market share Innovationsmanagement Source: Deloitte, 2012. Forrester 2012, Gartner 2012 ©2012 Deloitte Open innovation initiatives require adequate resources and guidelines to successfully contribute to innovation Strategic Alignment Steering & Resources Establish Collaborative Corporate Culture • Shift towards open innovation requires a significant transition from the old approach to innovation • Send a strong message that this is the path the company pursues from now on • Avoid the “not-invented-here”-mentality by involving employees • Explain benefits that will follow and emphasize employees participation is critical right form the start IP Control Participants Enable Internal Resources Communication Define Rules for Company and Community • Ensure sufficient internal resources to rate ideas and communicate actively • Tightly define what topics the open innovation initiative is about • Define roles and expected amount of time needed for internal resources • Clearly define rules for the initiative (for internal and external participants) including risk management processes • Team-members must have some level of influence on the platform and Social Media engagement of the company • Involve cross-functional teams • Attribute good ideas, partner connections etc. to those responsible Good practice • Continually focus the discussion around the defined topic • Expel community members, who have irreconcilable differences of opinion in the most friendly way possible Comments • Fully outsourced development of a “movie preference algorithm” The Netflix Prize • Netflix continues to use “the crowd” for feedback and product development • Best practice for resource saving Innovationsmanagement Source: Deloitte, 2012. Forrester 2012, Gartner 2012 ©2012 Deloitte Early clarification of intellectual property (IP) issues as well as honest communication help to overcome a critical hurdle of open innovation initiatives Strategic Alignment Steering & Resources Take Precautions • Reviewing the legal situation when exposing new products and services to non-employees is indispensable • Get legal onboard - legal team will be experts at crafting NDAs etc. • Conduct risk classification in advance to ensure protection of critical R&D • Require participants to register and virtually sign a disclaimer indicating that they relinquish IP rights IP Control Participants Maintain Trust • When recruiting participants, inform upfront about the NDA requirement • Introduce NDA in a tactful way Communication Integrate Other Firm’s IP • Discover new IP & activate other companies’ unused IP through partnerships to accelerated product development • Explain why it is necessary • Avoid spoiling an otherwise trustful relationship Good practice Comments • Tchibo-ideas is the idea crowdsourcing site of Tchibo Tchibo idea crowd sourcing • It contains a large Q&A section with a focus on property rights and how to get legal advice • Participants have the option to submit their idea confidentially Innovationsmanagement Source: Deloitte, 2012. Forrester 2012, Gartner 2012 ©2012 Deloitte The right audience must be addressed in the right way to ensure open innovation success via Social Media Strategic Alignment Steering & Resources Find the Right Audience • Define your ideal participants Customers, creatives, experts, etc. IP Control Participants Incentivize Internal and External Participants • Incentives may be intrinsic or extrinsic • Go for quality rather than quantity • Intrinsic or social benefits of participating drive a significant amount of participation • Address incentives, confidentiality, and consumer qualification requirements • Consumers take pride when their favorite brand listens to them • Leverage potentially existing fan and knowledge communities • Extrinsic incentives are warranted if you are asking for a significant investment of time from the participant, particularly for external groups Good practice Communication Do not Expect Participants to be Experts • Consumers are often not equipped to predict the future • Vast majority of consumers are unlikely to understand your supply chain • Participants will appreciate your feedback why certain suggestions and ideas won’t work for you • Present this constructively and without discouraging participants with technical details Comments • Open to a broad audience • Clear communication of idea selection process and winner “The idea Collaborative Logistic Hubs is inspiring and scalable […]” DHL city logistics idea contest • Attractive price - weekend trip to Istanbul valued at 1.500$ Innovationsmanagement Source: Deloitte, 2012. Forrester 2012, Gartner 2012 ©2012 Deloitte While innovating with external partners, a continuous communication is required to keep the community interested Strategic Alignment Steering & Resources Keep the Dialogue Going IP Control Participants Be Honest Communication Close the Loop • One classic mistake is failing to stay engaged in Social Media activities • Treat the community with respect and honesty • Internal and external participants want to know the outcome of the project • Set a predefined time limit for answers to participants and partners • If you can share proprietary information do so - this will have positive impact on the quality of the outcome • Can be realized through winners list or other measurement of top ideas • Create conversations, allow customers to guide the discussions, encourage them to interact with one another and let them ask you questions Bad practice • Follow through with participants about which ideas (if any) were implemented, explaining why or why not • Failing to close the loop will discourage participation - people perceive the ideagathering process is a black hole Comments • Campbell’s is a large soup producer • The company offers an idea contribution site Campbell’s ideas for innovation Innovationsmanagement • The communication towards participants is top-down, slow and might be interpreted as arrogant Source: Deloitte, 2012. Forrester 2012, Gartner 2012 ©2012 Deloitte Numerous benefits come along with open innovation initiatives enabled through Social Media after challenges have been met Challenges Strategic Alignment Steering & Resources IP Control Participants Communication Benefits Ideas & Innovation Process Gather outside-the-box perspectives on product strategy Enables far more ideas to be generated from more sources at a faster pace Cast a wider ideation net Faster develop ideas into products through partner networks, idea contests, etc. with consumers Test product ideas and concepts against a large number of users, identify unmet needs and get direct feedback to reduce risk of failure By embracing partnerships, companies share some of the risk of failure External & Internal Relationship Integrate numerous external and internal resources (employees, partner, supplier, consumer, universities, etc.) Create affinity group of highly committed users Create dialogues between company and affinity group Through opt-in nature of social platforms, users are likely to be more engaged with your company making them a highly desirable audience with which to converse Public Relationships Humanizes the company, shows being receptive to input from consumers Products created with this customercentric approach in mind enjoy a halo of humanization Being able to tell potential customers that a new product was created with the direct assistance of existing customers is a powerful message Creates awareness for the company Consumer participating in innovation are more loyal and can become brand advocates Reduced cost (market research) Innovationsmanagement Source: Deloitte, 2012. Forrester 2012, Gartner 2012 ©2012 Deloitte Case Study Innovationsmanagement ©2012 Deloitte Case Study (1/3): Idea contests as an innovation tool based on the ideabird example Idea contest description & objectives Example Description: Requesting solutions to a posed call to action, often involving incentives Approach & objectives: • Ideation: Generation of ideas through global talent pool which is moderated (by community manager(s)) • Validation: Participants and experts rate ideas by predefined set of categories • Create dialogues and discussions between participants Platform core functionalities: • Idea pool • User profile • Commenting and rating of ideas, search function • Dialog functionality (message, discussion board) Selected pros & cons: Gather outside-the-box perspectives on product strategy Identify ideas and future collaborators/ innovators Requires community maintenance Considerable commitment of resources (money, people) Innovationsmanagement • Open innovation contest platform called ideabird • Initiated by a partner consortium around Deloitte, Deutsche Telekom, RWTH Aachen and HYVE • Global, open to everyone, defined timeframe • 11 idea categories around the anchor topic find & follow ©2012 Deloitte Case Study (2/3): Successfully solve different challenges – set objective and monitor and define a risk management process Strategic Alignement Steering & Resources Set objectives and monitor Define objectives • Define objectives and relevant KPIs (e.g. minimum # of ideas to be submitted, min. # of participants etc.) Monitor • Weekly monitor activities on the platform as expert ratings, new ideas, ideas per week, etc. and take action if necessary Innovationsmanagement IP Control Participants Communication Define rules Take precautions Define rules • Clearly define rules for all participants(internal and external) • Set-up a risk management processes • Inform community members if they are braking the rules without knowing in the friendliest possible way • Expel community members, who are on purpose acting against defined rules Take precautions • Get legal on board early to review terms and conditions and IP regulations • Require participants to register and virtually sign a disclaimer indicating that they relinquish all IP rights ©2012 Deloitte Case Study (3/3): Properly address the idea contest challenges – focus on managing the community Strategic Alignement Steering & Resources Communicate actively • Be active using various channels (Social Media, press releases, etc.) • Keep the communication going (announcements, newsletters, etc.) IP Control Participants Give feedback • Assign roles: “Idea dispatcher” who dispatches ideas and experts who evaluate ideas to make sure every idea is evaluated by and expert • Give feedback: Make sure to comment on every idea to motivate participants • Quick response time is crucial Innovationsmanagement Communication Be transparent • Be transparent and clear about your terms & conditions • Be fair: users must still be able to take some advantage of their ideas • Make selection criteria and process transparent • Explain reasons why for (winning) idea selection ©2012 Deloitte Thank you for your attention! Thilo Többens Director Innovationsmanagement Deloitte Consulting GmbH Deloitte Consulting GmbH Schwannstraße 6 40476 Düsseldorf Germany Schwannstraße 6 40476 Düsseldorf Germany Tel.: Fax: Mobil: + 49 211 8772 3299 + 49 211 8772 11 3299 + 49 151 1510 6868 Angela Schmitz-Axe Manager Tel.: Fax: Mobil: + 49 211 8772 3539 + 49 211 8772 11 3539 + 49 151 1510 6860 [email protected] www.deloitte.com/de [email protected] www.deloitte.com/de Member of Deloitte Touche Tohmatsu Member of Deloitte Touche Tohmatsu ©2012 Deloitte
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