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Top Management in open Innovation

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Top Management in open Innovation

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  1. 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

  2. Top Management in Open Innovation:Overview Innovation: Overview • Findings • Support from top management is important • Needs the right skills • OI managed top-down or bottom-up? • Implications • Top management has to be committed • Top management has to empower the OI Team • Create OI strategy aligned with corporate strategy • Have a CEO mandate 2

  3. FINDINGS

  4. Top Management in Open Innovation:Overview Innovation: Overview • Findings • Support from top management is important • Needs the right skills • OI managed from the Top or Bottom up? • Implications • Top management has to be committed • Top management has to empower the OI Team • Create OI strategy aligned with corporate strategy • Have a CEO mandate 4

  5. 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

  6. Top Management in Open Innovation Innovation: Overview • Findings • Support from top management is important • Needs the right skills • OI managed top-down or bottom-up? • Implications • Top management has to be committed • Top management has to empower the OI Team • Create OI strategy aligned with corporate strategy • Have a CEO mandate 6

  7. Top Management – Finding 2: Needs the right skillsovation: Overview • Findings • Senior leaders must develop and support the necessary skills [Slowinski & Sagal, 2010] • Link with skills development 7

  8. Top Management in Open Innovation Innovation: Overview • Findings • Support from top management is important • Needs the right skills • OI managed top-down or bottom-up? • Implications • Top management has to be committed • Top management has to empower the OI Team • Create OI strategy aligned with corporate strategy • Have a CEO mandate 8

  9. Top Management – Finding 3: OI managed top-down or bottom-upvation: 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

  10. Top Management – Finding 3: OI managed top-down or bottom-upvation: 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

  11. Top Management – Finding 3: OI managed top-down or bottom-upvation: 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

  12. Top Management – Finding 3: OI managed top-down or bottom-upvation: 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

  13. 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

  14. implications 14

  15. Top Management in Open Innovation Innovation: Overview • Findings • Support from top management is important • Needs the right skills • OI managed top-down or bottom-up? • Implications • Top management has to be committed • Top management has to empower the OITeam • Create OI strategy aligned with corporate strategy • Have a CEO mandate 15

  16. Top Management – Implication 1: Commitmentvation: 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

  17. Top Management in Open Innovation Innovation: Overview • Findings • Support from top management is important • Needs the right skills • OI managed top-down or bottom-up? • Implications • Top management has to be committed • Top management has to empower the OI Team • Create OI strategy aligned with corporate strategy • Have a CEO mandate 17

  18. 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

  19. Top Management in Open Innovation Innovation: Overview • Findings • Support from top management is important • Needs the right skills • OI managed top-down or bottom-up? • Implications • Top management has to be committed • Top management has to empower the OI Team • Create OI strategy aligned with corporate strategy • Have a CEO mandate 19

  20. 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

  21. 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-summit-stefan-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

  22. 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

  23. Q&A 23

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