Manage Implementation of Open Innovation Strategy

October 1, 2012 Editor 0

Effective implementation of Open Innovation ambitions implies a complex process of organizational change. An accurate change process from relative closed to a predefined state of opennes. With specific attention to people, operations, policy and culture. A carefully considered incremental approach containing appropriate leadership styles, little manageable steps, concrete budgets, and a crystal clear vision on where the organization is heading is pivotal to create an open organization with supporting open culture. To capture this essential but complicated set of input for effective use of Open Innovation we will introduce the Open Innovation Chess Paradigm.

Now that both research and business have extensively experimented with and iteratively analyzed the execution of Open Innovation, a closer look on how to open-up the organization itself is needed. After all, organizations can’t act open on the outside if they’re not open from the inside. Like described in my previous post, the great pitfall of Open Innovation is to reduce the scope of Open Innovation to the output: exploit Open Innovation as a stand-alone project or (marketing) campaign. Once an organization acts open to involve the environment in its innovation process, the organization causes expectations at the environment to be really open through its veins in follow-ups too. Which means no ‘not-invented-here’ syndrome or deathly silence after the environment submitted their effort.

Manage input

This is why becoming an open organization is the first essential step to effective execution of Open Innovation. Becoming an open organization is the input needed to result in the required output: effective execution of the Open Innovation strategy; (intensive) cooperation between the organization and its environment including adaptation of contributions from outside the organization. Despite of all the Open Innovation research on the output side of Open Innovation, knowledge and effective approaches to support the input side of Open Innovation is lacking heavily. Strange, since we all know: without input, there is no output.

A systematical approach (model) on how to manage the implementation process of Open Innovation strategy is an important need to bring Open Innovation to the next stage. We need an input-focused approach that guides the organization through the implementation process, which is in fact an enormous change for most organizations. This must contain concrete plans of action on the different levels of the (internal) organization in order to create the right circumstances and commitment to implement Open Innovation in a transparent and predictable way.

Component 1: parallel sub processes

The implementation model covers the full impact that Open Innovation has on the (internal) organization. In order to divide the implementation process in logical sub processes which can be managed parallel to each other, we distinguish people, operations, policy, and culture:

• The people process focuses on the impact on involved stakeholders (e.g. learning, networking, incentive structures, etc.).
• The operations process focuses on how both processes and infrastructure are able to adapt Open Innovation the best (e.g. facilitation of regular knowledge & creativity sharing, web access, job descriptions, etc.).
• The policy process focuses on identifying bottlenecks in current policies and make adjustments to support Open Innovation effectively (e.g. information policy, IPR-policy, communication policy, social media strategy, etc.).
• The culture process focuses on communication and creating commitment at involved stakeholders (e.g. trust, openness, self-learning, etc.).

Using these ‘parallel’ processes makes it possible to focus (assign distinct responsibilities) and enable the sub processes to leverage each other by synchronizing their timelines.

Component 2: phasing change

At the same time the implementation model anticipates on the incremental structure of the change process and divides the sub processes in little manageable steps which are aligned with the incremental structure of change. As we know for decades the adaptation of change takes at least four phases and we will use this known fact to break down the four sub processes to manageable pieces (Hersey & Blanchard):

• unaware / incapable: the early phase where the organization has to be informed about the new directions: telling;
• aware / incapable: the phase where the organization will try out the new way of working in a save environment in order to gain trust and commitment: selling;
• aware / capable: the phase where the organization will use the new way of working actively: participating;
• unaware / capable: the ultimate phase where the organization will actually be the new way of working: delegating.

The logical split between these four incremental phases provides us with manageable subprojects within the four defined sub processes.

The result? We have broken down the complexity of the change process to 16 little manageable pieces. The great advantage is that every little piece can be provided with its own budget and own plan of action, which makes the implementation of Open Innovation transparent and predictable.

The little pieces of this model also break down the absolute chicken / egg situation between the required Open Culture and effective Open Innovation. Breaking the implementation process down it is easier to solve chicken / egg situations using incremental exchange between ‘chicken’ and ‘egg’, since this also breaks down the narrow sense of the chicken & egg relationship to adaptable (manageable) pieces. Divide the process in little steps to reduce the perceived difference and enable involved stakeholders to gain experience and trust in a safe environment. In this incremental way involved parties try and experiment by little steps and implement the Open Innovation strategy together with the aligned open culture bit by bit.

Direction and effective leadership

Using the four sub processes and the four phases of change in the implementation model implies a high level of flexibility. The earlier phases affect the latter ones, while the different sub processes affect each other. A predefined static implementation plan is not feasible and anticipation becomes essential during the implementation process. Like Robert E. Quinn would call it: “the organization has to build the bridge as it walks on it”. To maintain common goals during this complex implementation process, a clear vision from a strong leader becomes pivotal.

In order to keep all activities focused on one common end point during the complex implementation process, the end point must be defined clearly. The definition describes the new Organizational Identity (Albert & Whetten; Ashforth & Mael; Dutton & Dukerich; Empson), which facilitates all involved parties with continuous awareness of who they become and what organizational goals are involved to reach the end point. The Organizational Identity represents the glue and purpose during the longitudinal change processes and corresponds with the clear vision of the transformational leader that’s leading the organizational change towards an open organization.

So, if effective implementation of Open Innovation strategy requires a visionary leader that empowers the organizational members to work fully committed to one common goal, Transformational Leadership (Bass; Aviolo) is a precondition while managing change. The change process needs a leader who oversees the complex matrix structure of sub processes and phases of change. And who is able to adjust his / her leadership styles to the different phases of organizational change. The Transformational leader is a role model that expresses the values of the new Organizational Identity in every phase and is able to align the Organizational Identity with stakeholders, subprojects and budgets.

Open Innovation Chess Paradigm

When we put all above together in one picture, we have constructed the conceptual model of the change process we deal with while implementing Open Innovation Strategy:

This conceptual model contains all important elements of the implementation process. The conceptual model provides overview on the complex matrix structure of (internal) processes progressing along the different phases of change from relatively closed to a predefined state of open organization. It describes the persistent role of the Organizational Identity throughout the change process and the different leadership styles aligned with the subsequent phases of the change process.

The conceptual model is very useful for boardrooms, since it describes the abstract flows of the implementation process. It could be used as an easy speaker’s note while discussing the whole process, but is unfortunately yet not tangible enough to be used as steering wheel while implementing Open Innovation. It’s too abstract for a management tool that must be communicated (and identically understood) throughout all levels of the organization. To make it really suitable for effective management of Open Innovation implementation, it needs to be cut down to the ultimate level of simplicity.

Chess metaphor

To make this theory more tangible for communication, execution and monitoring purposes we will represent this conceptual model along a chess metaphor:

We suppose everybody is familiar with the basic rules of chess, so we have turned the conceptual model 90 degrees counterclockwise to convert it to a chess game. A game that’s remarkably comparable with Open Innovation implementation, since it’s a strategic game that contains different scenarios, anticipation, clear goals, and simple rules. Further chess includes different pieces (roles) and the game can be analyzed as a collection of little steps.

Let’s use the chess metaphor: Along the four (internal) processes of people, operation, policy, and culture we will play the chess game from a relatively ‘closed’ baseline through four phases of change (info, try, use, and be) towards the ‘open’ end situation. To cut it down to concrete manageable steps we have used the black and white squares of the chess board to represent the collection of concrete steps that have to be taken in order to complete the implementation process.

Finally, from a communication perspective, we have assigned roles (chess pieces) to all leading parts of the paradigm. In this way all involved parties will understand their role in relation to the ‘game’ and the other ‘chess pieces’. These pieces refer to the leading parts as follows:

• The King represents the new Organizational Identity, the predefined end point of the change process which will be ‘protected’ by the rest of the chess pieces.
• The Queen represents a third party coach, which is able to guide the organization and the Transformational leader through the implementation process. The third party coach knows the rules of the game, overviews the paradigm, has an objective view on the organization and serves the King.
• The Rooks represent the management and will cover both columns and rows, which corresponds with the structure of the implementation process: per change phase.The management is able to interact with the King (‘castling’), in order to translate the new Organizational Identity to the respective level of execution.
• The Knights represent the Ambassadors. A selection of stakeholders that will be involved early in the implementation process to scout bottlenecks and solve (‘jump over’) hurdles before the rest of the stakeholders confront it.
• The Bishops represent the rest of the stakeholders excluding the employees: suppliers, customers, experts, environment, etc. The existing stakeholders have to ‘keep in the same color’, which means that they must be kept aligned with the changing situation. New stakeholders may arise when the open strategy implies that some internal processes will (partly) be outsourced to parties outside the organization (specialists, customers, crowd, etc.)
• The Pawns represent the employees, probably the most influent role since they can make or break organizational change. In terms of chess: “Pawn is the soul of chess”, the Pawn structure determines the strategy.

The Transformational leader plays the chess game and makes sure that all projects stick to their planning and budgets and serve one common goal: fulfilling the new Organizational Identity …of an open organization.

In this way the Open Innovation Chess Paradigm becomes a very useful tool that enables the management to focus on concrete manageable steps (squares) and deal with all consequences separately. Management can assign own budgets and plans of action to these little steps. This will make the implementation process transparent, predictable and measureable. It makes it possible to prepare the implementation process as a set of projects, each with its own scope and own targets. Besides, it’s far easier to gain commitment for little steps separately.

Organization implements by itself

With the Open Innovation Chess Paradigm the organization is able to implement its Open Innovation Strategy by itself! In a matter of fact, the organization must do it by itself in order to be able to maintain the end situation after the change process. The role of the third party Queen is (‘only’) to coach and guide the organization through the implementation process. Sharing experience, feeding the management with knowledge. keeping overview, and monitoring the progress.

Filling the gap between the available abstract theories on Open Innovation and the need for more concrete approaches on how Open Innovation could be effectively managed, the Open Innovation Chess Paradigm aims to initiate the next step in Open Innovation research. The Open Innovation Chess Paradigm provides more insight on the input of Open Innovation and how to manage the impact on the organization. This will help organizations maximizing the output of Open Innovation, because it structures the input needed for the output: effective Open Innovation!
This post is a follow up of “Implement Open Innovation Strategy: Start Focus on Input”. In the following posts I will elaborate on (1) Change Management, and the role of (2) Organizational Identity and (3) Leadership during the implementation of Open Innovation Strategy.

Rob Veldt (http://www.linkedin.com/in/robveldt) is researcher, consultant and public speaker on Open Innovation implementation. Serial entrepreneur and investor; owner and founder of www.ideavents.com, www.ThinkTankThursday.com and www.Cash4idea.com, among others. Follow Rob at Twitter: @RobVeldt or email him at rob.veldt@ideavents.com.

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Categories: Open Innovation

Tags: change, competitive advantage, identity, Organization, phase, process, represent, strategy