MOOI Theme 2:
Top management in open innovation Prof. Henry Chesbrough, University of California, Berkeley & ESADE Prof. Wim Vanhaverbeke, Hasselt University, ESADE & National University of Singapore Dr. Nadine Roijakkers, Hasselt University January 7, 2013
Top Management in Open Innovation: Overview Innovation: Overview •
Findings 1.Support from top management is important 2.Needs the right skills 3.OI managed top-down or bottom-up?
•
Implications 1. Top management has to be committed 2. Top management has to empower the OI Team 3. Create OI strategy aligned with corporate strategy •
Have a CEO mandate 2
FINDINGS
Top Management in Open Innovation: Overview Innovation: Overview •
Findings 1. Support from top management is important 2. Needs the right skills 3. OI managed from the Top or Bottom up?
•
Implications 1. Top management has to be committed 2. Top management has to empower the OI Team 3. Create OI strategy aligned with corporate strategy •
Have a CEO mandate 4
Top Management – Finding 1: Support from top management is important
ovation: Overview •
Findings
– Senior management support of an OI initiative is crucial to allocate resources and ensure there is both motivation and a mandate for culture change [Rutledge H., 2012] – The support of top management is absolutely essential and we have it on a daily basis [Thoen, 2011] – Senior leaders must understand and apply open innovation [Slowinski &Sagal, 2010] – Executive-level leadership is required, as is constant focus to reinforcing the message, and a clear understanding of the stakes [Bingham &Spradlin, 2011] – Top management support is instrumental in achieving OI rollout across the whole organisation [Mortara et al., 2009] – Executive sponsorship needed (remove roadblocks and mandate participation) [Sloane, 2012] – Link with Culture
5
Top Management in Open Innovation Innovation: Overview •
Findings 1.Support from top management is important 2.Needs the right skills 3.OI managed top-down or bottom-up?
•
Implications 1. Top management has to be committed 2. Top management has to empower the OI Team 3. Create OI strategy aligned with corporate strategy •
Have a CEO mandate 6
Top Management – Finding 2: Needs the right skills ovation: Overview •
Findings
•
Senior leaders must develop and support the necessary skills [Slowinski & Sagal, 2010]
•
Link with skills development
7
Top Management in Open Innovation Innovation: Overview •
Findings 1.Support from top management is important 2.Needs the right skills 3.OI managed top-down or bottom-up?
•
Implications 1. Top management has to be committed 2. Top management has to empower the OI Team 3. Create OI strategy aligned with corporate strategy •
Have a CEO mandate 8
Top Management – Finding 3: OI managed top-down or bottom-up vation: Overview •
Findings (1/5)
•
Real change is possible when managed from the top [Bingham & Spradlin, 2011]
•
Only CEO and board of director can drive the change needed to become a Challenge Driven Enterprise [Bingham & Spradlin, 2011]
•
Occasionally, senior management sees the need for OI, but mostly it is launched at the department level [Sloane, 2012]
•
…
9
Top Management – Finding 3: OI managed top-down or bottom-up vation: Overview •
•
§
•
Findings (2/5)
TBX (O) approach [Lindegaard, 2011] §
Top down: get executives on board and require personal commitment
§
Bottom up: Value creation begins with people. Involve and engage employees
§
X: across: middle management has focus on their own profit-and-loss responsibility
§
Outsiders: external partners will bring knowledge, skills, experience,..
4 Ways to Open innovation [Mortara et al., 2009] §
Top-down, strategically-driven, centralised activities (mature)
§
Top-down, strategically-driven, distributed activities
§
Bottom-up, evolutionary, distributed activities (mature)
§
Bottom up, evolutionary, centralised activities
…
10
Top Management – Finding 3: OI managed top-down or bottom-up vation: Overview •
Findings (3/5)
TBX (O) approach [Lindegaard, 2011]: You need to work with 3 + 1 organizational approaches.
§ Top down: § Get executives on board and make them personally commited to the innovation activities. Without executive support, no change occurs
§ Bottom up: § Value creation begins with people, one by one, team by team. Nothing happens unless you get employees engaged and involved.
§ X: across: § The biggest challenges will come from middle management placed across e organiation due to a narrow focus their own profit-and-loss responsibility
§ Outsiders: § External partners will bring knowledge, skills, experience, Include external resources as you move towards OI
11
Top Management – Finding 3: OI managed top-down or bottom-up
vation: Overview •
Findings (4/5)
4 Ways to Open innovation [Mortara et al., 2009] §
Top-down, strategically-driven, centralised activities
§
Top-down, strategically-driven, distributed activities
§
Bottom-up, evolutionary, distributed activities
§
Bottom up, evolutionary, centralised activities
12
Interactive poll 1 •
What are the three most difficult roles of top management in implementing OI? –
Allocate resources for OI initiatives
–
Ensure there are incentives for a cultural change
–
Continuous support from top management
–
Top management should understand OI
–
Top management’s role in achieving OI rollout across the organization
–
Executive sponsorship (remove organizational roadblocks)
–
Executive support for the development of the necessary skills 13
implications 14
Top Management in Open Innovation Innovation: Overview •
Findings 1.Support from top management is important 2.Needs the right skills 3.OI managed top-down or bottom-up?
•
Implications 1. Top management has to be committed 2. Top management has to empower the OITeam 3. Create OI strategy aligned with corporate strategy •
Have a CEO mandate 15
Top Management – Implication 1: Commitment vation: Overview •
CEO must be deeply committed [Lindegaard, 2011]
•
Top of organization must be committed in no uncertain terms and see it through to the end [Bingham & Spradlin, 2011]
•
Demonstrating commitment and support, top management holds the key to sway the opinion of those who feel less inclined to accept the new approach to innovation [Mortara et al., 2009]
•
Executives must not only understand but also buy into the value proposition [Sloane, 2012]
•
Commitment from the top down helps building the culture for OI [Sloane, 2012]
•
Leaders must promote innovation and an entrepreneurial culture across the organization by being personally involved in establishing and implementing clear and relevant ways to support innovation [Igartua 2010]
16
Top Management in Open Innovation Innovation: Overview •
Findings 1.Support from top management is important 2.Needs the right skills 3.OI managed top-down or bottom-up?
•
Implications 1. Top management has to be committed 2. Top management has to empower the OI Team 3. Create OI strategy aligned with corporate strategy •
Have a CEO mandate 17
Top Management – Implication 2: Top Management has to empower the OI Teamvation:
Overview • Top management gives the fundamental push to establish an OI implementation team [Mortara et al., 2009] • Create and empower the CDE task force [Bingham & Spradlin, 2011] • The innovation mandate should lay out the resources and authority given to the innovation team [Lindegaard, 2010] • Innovation leaders must feel full support from executives [Lindegaard, 2010] • Link with OI team
18
Top Management in Open Innovation Innovation: Overview •
Findings 1.Support from top management is important 2.Needs the right skills 3.OI managed top-down or bottom-up?
•
Implications 1. Top management has to be committed 2. Top management has to empower the OI Team 3. Create OI strategy aligned with corporate strategy •
Have a CEO mandate 19
Top Management – Implication 3: Align OI strategy with corporate strategy :
Overview
• Top management should understand and buy into the creation of a tight link between innovation strategy and the overall corporate strategy [Lindegaard, 2010] • Establish the CEO mandate [Bingham & Spradlin, 2011]
•
Successful CEOs focus the organization on a small number of key initiatives and some choose a single theme or strategy that defines their administration
•
A CEO mandate makes that everyone in the organization will understand the importance and commitment attached to this program by the CEO
• “Never launch without a mandate from the CEO. [Open Innovation] cannot succeed if it’s cordoned off in R&D. It must be a top-down, companywide strategy” [Huston & Sakkab, 2006]. 20
–
References Bingham A & Spradlin D. (2011): The Open Innovation Marketplace
–
Igartua, J. I., Garrigós, J. A., & Hervas-Oliver, J. L. (2010). How innovation management techniques support an open innovation strategy. Research Technology Management, 41-52.
–
Lindegaard, S. (2009)/
–
http://www.slideshare.net/StefanLindegaard/open-innovation-summitstefan-lindegaard-presentation-2645946
–
Lindegaard, S. (2010): The open innovation revolution
–
Lindegaard S. (2011): Making Open Innovation Work
–
Mortara, L. et al. (2009): How to implement Open Innovation
–
Interview Rutledge H (Head of OI GSK) (2012)
–
Sloane P (2012): A guide to open innovation and crowd sourcing
–
Slowinski and Sagal (2010): Senior Management Roles in Open Innovation
–
Interview Chris Thoen (P&G) by Shaugnessy (2011) 21
Interactive poll 2 •
What are the three most important actions for top management to maximize impact? –
Commitment
–
Financial support
–
Support to build culture for OI
–
Good understanding of OI
–
Establishment of OI-team
–
Link between (open) innovation strategy and corporate strategy 22
Q&A
23