Open innovation used to be just for the likes of P&G and Unilever, but today, it's being embraced by a lot of mid-sized companies in the $100m-$1bn revenue range as well, according to Andy Zynga, CEO of open innovation expert and corporate matchmaking service NineSigma.
Catching up with FoodNavigator-USA at the IFT show in Chicago, Zynga said that companies have been engaging in open innovation (looking for inspiration beyond their own four walls) since time began, by hanging out at the bar after a conference or asking contacts at a trade show if they know a guy that knows a guy...
What's changed since the term 'open innovation' was first coined in 2003 is that this process has now been formalized as the pressure to get to market earlier with bigger, better and more innovative new products has increased, and companies such as NineSigma have provided the tools to help companies get started, says Zynga.
"Open innovation is about accessing a global pool of innovation more systematically."
Why bother with the middleman?
Now cynics might say, why bother with the middleman? Can't the likes of GSK, Coca-Cola and Kraft find their own perfect partners?
Of course, says Zynga, and lots of NineSigma's clients are doing just that via setting up their own OI teams, 'wants and needs' web platforms, tech scouts and the like.
But many of them also recognize the value of an intermediary that can stand back and see what you cannot when you are too close to a problem, and fixated on the application (bread, ice cream, cakes) rather than the fundamental nature of the tech challenge you need to solve, he says.
For example, if you work for a detergent company and you're looking for something that will enable people to pull shirts out of the dryer that don't need ironing, that's probably how you might phrase your request for proposal (RFP) when seeking potential partners, he says.
NineSigma, by contrast, will step back and say - our client is looking for a solution to reduce surface tension of an organic fiber - and by phrasing the challenge in a more open way, might attract solutions from a completely unrelated industry that could solve the client's problem, he says.
Sometimes, the solution to a problem experienced by a baker might be found in the defense industry, for example, so narrowing your search too early by talking about baking might not be wise.
"If you are too close to a problem you will often constrain your search terms due to your functional fixation", says Zynga. "That's where we come in."
So what's the best way to structure and resource your OI program?
First, said Zynga, you must have boardroom buy-in; second you need a clear idea of what you want, "a needs statement that's clear, compelling and concise"; and third, the discipline to use OI for strategic projects where you've hit a roadblock rather than just using it to go on fishing expeditions to see what's 'out there'.
Finally, both sides need decent lawyers to ensure that any deal they strike with a partner is a win-win for both parties, he says.
"Open innovation is about partnerships."
Click here to see what General Mills had to say about open innovation in action at the IFT show.