On the 4th of June, Innopay hosted a cross-industry breakfast session on open innovation and co-creation. Sixteen innovation experts from BNP Paribas, CogniStreamer, DNB, European Merchant Services, ING, KPN, PostNL, RBS, TransLink Systems, Van Doorne, YOIN and Innopay exchanged views on various open innovation-topics. In addition, cases were presented of BNP Paribas and CogniStreamer. Shikko Nijland, Managing Partner of Innopay, provides an overview of the five key takeaways in the area of open innovation and co-creation.
1. Innovation is about people and not about process
As one might expect there were very different thoughts on whether innovation is about people or the process; although everybody seems to agree that both are vital factors in the innovation process. The importance of processes increases almost exactly in line with complexity, especially when it involves large groups of people, an extensive external ecosystem and various geographical locations.
2. Incremental innovation is more important than disruptive innovation
There was a slight minority in favor of incremental innovation over disruptive innovation. Everybody did agree that an organisation certainly needs disruptive innovation to stay relevant and create new s-curves: it is better to disrupt yourself, than being disrupted by someone else. However, it was also clear that you cannot be disruptive all the time. This would create too much instability in the organisation and makes it very difficult to realize adequate returns on investment. Incremental innovation on the other hand, will allow you to continuously improve on products and services, with a more predictable return on investment.
3. Involving the external ecosystem creates more complexity than it adds value
Almost all participants believed that involving the external ecosystem creates more benefits than it adds complexity to the innovation process. Additional remarks were that the crowd was only used for very specific topics and that for some topics only a selected part of the ecosystem was approached, for instance hackers to penetration test security systems. One humorous anecdote mentioned how in one organisation the R&D manager had complained that 90 percent of the ideas coming from their crowdsourcing initiative were similar to what the R&D unit already had thought of in the last ten years. This was countered by someone mentioning that apparently the crowd had been able to come up with those same ideas, but with lower costs and within three months instead of ten years.
4. Biggest challenge of open innovation is to convince senior management
It is sometimes tough to convince senior management to embrace open innovation especially when an external ecosystem is involved. Concerns regarding IP and competitive information are considered to be risks that definitely must be mitigated before considering some form of co-creation with company outsiders. That said, you do need senior management as sponsors and more importantly so as champions, to accelerate the mobilization and engagement of potential contributors.
5. Open innovation is more effective with advanced tools
Concerning innovation tooling, most participants acknowledged the advantage of innovation platforms but the term ‘advanced’ evoked some discussion. “When should a tool be considered advanced?” is a difficult question to answer. File or message sharing systems like Sharepoint, Dropbox or Yammer are certainly not to be considered ‘advanced’, but how much functionality do you need to add before it is? In my opinion it should at least contain automatic filtering and ranking algorithms that also trigger and support workflow events and make suggestions to users.
The final insight that we would like to share was provided by the case presentation of BNP Paribas. The effectiveness of any innovation platform will be increased significantly when promoted by pro-active ambassadors at all levels in your organization in an offline fashion. The effect will be even stronger when reinforced with company events hosted by top management, at which the best concepts are being presented and assessed. A smart additional effect is that this will also recognize and reward top contributors.