Open innovation?

What’s so open about Open Innovation? Big companies realised some time ago that maintaining a sizeable internal ‘Arrandee’ department was painfully expensive and usually not very productive when up against commercial deadlines.

Often, that issue was representative of a failure to understand that R and D are fundamentally different activities (Research is stumbling across new knowledge by repeatedly testing your ideas about how the world works -by watching how the world works. Development is making new products to a defined specification and within a fixed budget and timescale). Get this wrong and all your resources get expended on smart people playing limitless mind games. Even large corporations find it too costly to maintain patent portfolios arising from ideas which might become products ‘one day’.

Instead, they spotted that many of their best new product ideas were being suggested by outsiders, off the payroll. Acme Ltd’s usual policy is to say “send us nothing because we don’t want to be accused later, by some lone inventor, of having copied his idea…ie pretty much the same one we may have already been working on in-house”.

Avid customers however are persistent and, in the case of eg Lego’s robotics kits, they were actually improving the system by hacking its operating system. After 18 months or so of prosecuting their best customers for their temerity, the company realised that those people were a source of expertise and sheer creativity that you usually can’t get by waving a paycheck around.

Listening to customer ideas is the foundation of Open Innovation. Sounds a bit like Open Source, but it’s vastly different. It turns out of course that some companies are more open than others. Many choose to use online aggregators, such as, to publicise problems they’d like to see dealt with. There aren’t that many people capable of suggesting new sulphurisation reactions for polycyclic aromatic morpho-heterachromes, or whatever…offering prizes online is a way to attract them.

Here’s the deal. You have to sign up to multiple pages of legal bumf before even getting access to the guts of the problem. It’s almost always a very narrowly defined one which is limited by the imagination of an already embarrassed head of Arrandee (see above). Then, you get a chance to write some detailed solution and send it to them. If they choose it as a winner you might get $20k. If they don’t, then you have shared your idea with some folk who have decided not to pay for the privilege. This may well hamper any of your subsequent attempts to obtain legal ‘protection’ for your solution.

P&G have managed to reduce their new product failures from 80% to 50% by this kind of process, so it clearly works -for them. As for the external Inventors, they may get some satisfaction and even recognition but it’s mostly free consulting in return for a small lottery ticket.

If you have a really good cure for a significant commercial headache, why not try talking direct to potential corporate licensees? (after having decided whether to invest in your own patent application). Contact me for some guidance about how to make this kind of approach.