On the face of it, the open approach to innovation seems pretty straightforward in its definition.
Open innovation, according to Henry Chesbrough, who coined the term in his 2003 book "Open Innovation: The New Imperative for Creating and Profiting from Technology," is a "paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology."
In short, the best ideas don't necessarily reside within your four walls, and your great internal ideas may bring the best value to your company by reaching markets via external channels.
However, adopting an open innovation approach can present numerous challenges, including how to manage intellectual property and where to look for beneficial external partnerships.
That said, there's no lack of tools to help manufacturers address that challenge. Numerous open innovation Web sites, service providers and events exist to help companies find success employing this business strategy, offering both sophisticated models of assistance and simple Web sites to post ideas. Players in this arena include such names as NineSigma, InnoCentive, the InnovationXchange and Planet Eureka.
Sealed Air Corp. is among the manufacturers that have found value in open innovation. Indeed, the Elmwood Park, N. J.-based manufacturer of packaging materials has a history that dates back to the late 1970s of looking outside its four walls for fresh perspectives. Over the past two years, the global manufacturer has been working with NineSigma to expand its collaboration efforts.
"We weren't novices in this arena," explains Ann Savoca, Sealed Air's global vice president of technology and innovation. "But the NineSigma approach brought a very different way to us of doing the kind of things we had done before -- more sophisticated, broader in its reach."
Founded in 2000, NineSigma offers an array of services to help companies participate in the global innovation community. Sealed Air has tapped NineSigma's large global network of experts to help the manufacturer locate collaboration partners to help it solve some difficult technical problems, explains Blaine Childress, Sealed Air research scientist and coordinator of the firm's open innovation efforts.
For example, he says, marketing folks identified the need for a special valve for a package. Internal researchers worked to develop a solution, but given the number of technical, timing and cost issues associated with it, "they just really weren't able to quite get there in the time frame that was needed. People were becoming more and more loaded with other problems with short timelines," Childress says.
"The decision was made -- it being an important project -- to go ahead and post it to the NineSigma global solver network. We got about a dozen responses from all over the world. We looked through those and within about nine months we had a solution we could actually use."
The nine-month time frame was shorter than what Sealed Air could have achieved had the company continued solely with its internal pursuit of a solution, Childress believes.
"And it's different than the routes we pursued before," he says. "That is one of the exciting things that occur. Some of our researchers get quite excited when they see a new way to solve a problem, because then they immediately say, 'how else can we apply that?'"
And, adds Savoca, "There's other value in open innovation that goes beyond just the specific product development activity, such as the network you begin to establish outside that can have value at a later point in time."
Threat to Internal R&D Staff
Not surprising, open innovation can raise concerns among companies' internal R&D personnel, who may feel their positions could be threatened by greater use of external resources. Childress acknowledges that there was some of that apprehension when Sealed Air began working with NineSigma. It didn't last, he says, and was instead replaced by excitement.
"They were just so excited by some new technology that they were eager to go ahead and evaluate it," he says.
Reflecting back on the company's early interaction with NineSigma, Childress says the high number of responses Sealed Air received to its initial requests was a pleasant surprise. That was particularly so given the company posted to the global network what Childress called "brick wall" problems. These were problems internal researchers worked at diligently until ultimately reaching a point at which they could proceed no further.
"Some were even considered impossible," he says. In one case, 36 responses were received. "Our guys had been trying to solve this and didn't think it was possible, and now there were 36 different ways we had to look through to try to choose the best route."
Not every proposal put out by Sealed Air to the NineSigma network has reaped a winning solution. To date, Sealed Air has put 11 requests for proposal out to the NineSigma network. Of those, the manufacturer has received seven proposals that obtained funding to move forward in the research-and-development process.
"We're very happy with that," Childress says.
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