New blog from the Product Development and Management Association (PDMA)

Here's an announcement about a new blog from PDMA that I am contributing to...

Introducing.... the PDMA Blog! (blog.pdma.org)

We’ve assembled a diverse panel of new product development experts…

….who will be sharing their thoughts, experiences, and recommendations on product development with readers of our new PDMA BLOG!

Some examples of blogging topics so far:

• OPEN INNOVATION BLUEPRINT
• INNOVATION IN THE FUZZY FRONT END
• THE “INVENTOR MENTALITY”
• LEARNING FROM PRODUCT FAILURES
• THE NATURE OF CREATIVITY
• USING AND CHOOSING PLM TOOLS
• THE USE OF COLLABORATIVE TOOLS IN INNOVATION
• TOYOTA AND BENCHMARKING
• ALIGNMENT IN NEW PRODUCT DEVELOPMENT

Click to view these recent posts:

• Renegade Innovation - Donavan Hardenbrook, Intel Corporation
• Beyond New Product Development - New Business Development - Mike Docherty, Venture2
• The Virtuous Cycle of Open Innovation - Michael Osofsky, Accelovation
• Strange New Products - David Olson, PDMA Webmaster
• Alignment - Dave Angelow, Business Foundations LLC
• Paintball and Product Development - Montie Roland, Montie Design
• The Role of Collaborative Tools in Innovation - Tricia Sutton, Sutton Enterprises

OUR BLOGGING PANEL INCLUDES:

* Dave Angelow -- Principal with Business Foundations LLC, assisting organzations with NPD process redesign and Product Lifecycle Management (PLM) selection/implementation. He is also president of the PDMA chapter in Austin . H is focus over his 20+ years of experience is on Business Process Redesign and Systems-Driven Organizational Transformation.

* David Olson, NPDP – Principal with David Olson Consulting, with nearly 30 years of experience in new product marketing and market research at the Leo Burnett Company, and is PDMA’s current national Webmaster. His focus is on market research, concept testing, sales forecasting, and launches of new consumer goods and services.

* Donavan Hardenbrook, NPDP – A senior consultant with 16 years of experience at Intel Corporation, supporting key process improvement initiatives at the company. He is also president of the PDMA chapter in Arizona . His a reas of personal interest are portfolio management, product development processes, requirements engineering, project management, and external benchmarking.

* Michael Osofsky – Co-founder and Chief Innovation Officer of Accelovation, and a graduate of MIT (working with Eric von Hippel), and founder of the MIT Innovation Club. His main interest is in understanding where creative, valuable ideas come from, and how tools and techniques can mine the world for creative insights.

* Mike Docherty – Head of a new ventures company called Venture2 that is focused on identifying and commercializing new business ventures in the consumer product markets. He also operates a corporate venture incubator called The Launching Pad in Delray Beach , Florida . His primary areas of focus include “open innovation” networks, and the commercialization of breakthrough innovation.

* Montie Roland – Principal and Founder of Montie Design, a product design firm in North Carolina . He has 15 years of experience designing products for diverse market spaces including industrial, commercial and military. He also is president of the PDMA chapter in The Carolinas. His primary area of interest is finding better ways to identify and define a vision for new products.

* Tricia Sutton, PMP, NPDP – President of Sutton Enterprises, a management consulting firm. She is also president of the PDMA chapter in Chicago , and editor of “Chapter Spotlight Features” in Visions Magazine. Her work focuses on helping organizations apply lean principles to increase effectiveness and innovation in product development and business operations.

Front End of Innovation 2006

PDMA and IIR hosted the fourth annual Fuzzy Front End of Innovation conference at the end of May. A high-profile event, it attracted over 700 people and featured the field's greatest speakers.

One of our customers commented, and I thought this was particularly insightful, that all the thought leaders seemed to be saying the same things. That's a good because it means we can begin to unify all of the theories into a comprehensive best practice.

If anyone's interested in working on a practitioner-led effort to create a Unified Innovation Theory that, let me know.

Open Innovation Blueprint: Commandment 4

This continues my on-going blog on mapping out a blueprint for implementing Open Innovation. The first entry in this series talked about the framework I am using to analyze this question, the Ten Commandments of Change Management. Open Innovation is a big change, and therefore requires a change management program. In today's blog, I'll cover the fourth element of the framework:

4. Create a sense of urgency
While it’s bad to launch Open Innovation along with a big reduction in force, a management shake-up can create the right sense of urgency. P&G, Dow-Corning, and 3M all had been on the decline for a long time when they began to open up. A sudden shake-up in management high into the chain of command helped instigate the change.

Another effective technique is to wait till your stock has plummeted by half and then scream for change—it won’t be hard to get others to scream along with you. Since long term investors largely value stock based on revenue growth potential, which stems from innovation, it should be easy for your people to connect the dots between Open Innovation, long-term revenue growth, stock price increase, and ultimately personal payoff if they are employee-owners (also a good practice).

I'll mention again, in the spirit of being open, all of these ideas are open for discussion, so please share your thoughts!

Virtuous Cycle of Open Innovation

Virtuous cycles are the elegant phenomenon in nature where systems function on their own because of self-reinforcing feedback loops. I think I see a virtuous cycle driving Open Innovation, illustrated in the diagram below.

The cycle seems to have begun with Technology Marketing (also called Intellectual Asset Management), back in the late 1990’s. Companies had accumulated many, many patents that were not making them any money. Companies such as P&G set up External Business Development groups to out-license those technologies. These groups paid for themselves in licensing revenues, but it didn’t contribute to the production of new products, the primary driver of sustainable growth.

Seeking truly innovative products to grow their businesses, companies such as P&G then began in-licensing technology from the outside, what many call Technology Scouting and which P&G calls its Connect + Develop program. Since so many companies had begun to do Technology Marketing, there was a nice big Technology Pool to select from to build new products with.

So many companies have begun to do Technology Scouting--close to one quarter of the top 1000 R&D spenders according to a Bain study--that they are beginning to have to compete for the hottest stuff. Paying the top dollar isn’t good enough for Technology Marketers pushing their latest and greatest. Buyers need to bring their own technologies to the negotiating table to differentiate themselves. That adds more technology to the pool, completing the virtuous cycle.

Of course no virtuous cycle builds on itself indefinitely. They all have a balancing force. But in this case, perhaps the most significant constraint to speak of is mankind’s own capacity to invent new technologies.

Open Innovation Blueprint: Commandment 3

This continues my on-going blog on mapping out a blueprint for implementing Open Innovation. The first entry in this series talked about the framework I am using to analyze this question, the Ten Commandments of Change Management. Open Innovation is a big change, and therefore requires a change management program. In today's blog, I'll cover the third element of the framework:

3. Separate from the past
Those of you in large corporations across the world who are dabbling in Open Innovation, I salute you, you are revolutionaries pursuing a noble cause that will accelerate innovation for everyone’s benefit. By thinking like a revolutionary you will find ways to help your followers separate from the past. For instance, revolutionaries give their cause a name. They pack all of their ideas into one concise label that advances their cause through word of mouth. If you declare that your effort to institutionalize Open Innovation will be called the Innovation Renovation Project, sooner or later you’ll overhear chatter at the water cooler like “Hey Pat, did you hear about the Innovation Renovation Project?...No Greg, it sounds exciting, what is it and what does it mean for our business unit?”

A word of advice: don’t do a big layoff and then launch Open Innovation. The economy needs more (not fewer) bright ideas from the world’s R&D people; Open Innovation is about making the walls of R&D labs more permeable, allowing ideas to flow to the place where they can make the biggest impact. That’s why it’s important to start Technology Marketing at the same time that you start Technology Scouting. It shows that you’re committed to putting technology back into the global pool. Make it clear that Open Innovation is not about outsourced R&D but about synergistic exchange of ideas.

I'll mention again, in the spirit of being open, all of these ideas are open for discussion, so please share your thoughts!

Open Innovation Blueprint: Commandment 2

This continues my on-going blog on mapping out a blueprint for implementing Open Innovation. The first entry in this series talked about the framework I am using to analyze this question, the Ten Commandments of Change Management. Open Innovation is a big change, and therefore requires a change management program. In today's blog, I'll cover the second element of the framework:

2. Create a shared vision and common direction

Have executives in your organization share the news about the Open Innovation trend with their employees in speeches, water-cooler chats, and 1-on-1 meetings. Buy copies of Chesbrough’s book and pass them around the building. Help everyone understand the primary drivers of this trend and why it’s relevant to your business.

Open Innovation consists of two parts: in-bound and out-bound technology transfer. Personally I think two goods names for these processes are Technology Scouting and Technology Marketing, but the field hasn’t converged on official names yet. What do your people think of these names? Invite them to shape this economic revolution and talk about the benefits of each:

• Technology Scouting provides faster time to market and can block a competitor from accessing a vital new invention available from another open innovator. P&G estimates they have effectively increased the size of their research pool to a million inventors by looking to the outside world (Buckley, 2005) and they currently source 35% of their ideas externally.
• Technology Marketing allows you to create new streams of revenue through IP licensing. IBM received $1.9 billion from IP royalty payments in 2001. (Thinksmart Blog) That was a fifth of their revenue!

Paint a picture for your organization depicting a future where technology flows effortlessly in and out of your company leading to a global acceleration in innovation. It’s all about getting products that solve important problems to market more quickly by making use of the wheels already invented by others. This new paradigm will improve quality of life for all consumers. Make sure the image of out-sourced R&D doesn’t figure in your imagery though—the world doesn’t need fewer inventions, it needs more! Open Innovation just helps inventions get to the place where they’re needed most.

I'll mention again, in the spirit of being open, all of these ideas are open for discussion, so please share your thoughts!

Open Innovation Blueprint: Commandment 1

This continues my on-going blog on mapping out a blueprint for implementing Open Innovation. The first entry in this series talked about the framework I am using to analyze this question, the Ten Commandments of Change Management. Open Innovation is a big change, and therefore requires a change management program. In today's blog, I'll cover the first element of the framework:

1. Analyze the organization and its need for a change
We often talk about R&D as if it is one atomic unit, but it’s not. Research differs from Development in that researchers constantly ask “what is possible?” while people in Development ask “what is needed...and how can I build it?” When what’s possible matches what’s needed, you have innovation. But most of the time you don’t get innovation, you get misalignment: Research produces ideas that aren’t used by Development and Development’s needs aren’t met by Research. The companies who are feeling the greatest pressure to innovate and grow have decided it’s time for a change. They’re opening up their R&D groups so that ideas can flow in and out, a new paradigm called Open Innovation. It’s about getting innovations to the right place at the right time so they can make their impact. More and more companies are adopting Open Innovation as they realize if they don’t capture innovations that other companies are making available...their competitors will.

Has your stock plunged by fifty percent or more? Do you see the rub between R and D in your organization? Are your competitors getting products to market in half the time you do? If you feel the urgent need for growth in your business then now is the time to look at Open Innovation.

I'll mention again, in the spirit of being open, all of these ideas are open for discussion, so please share your thoughts!

Open Innovation Blueprint

Open Innovation is one of the biggest, and most positive new ideas to hit corporations and the economy since the downturn threw cold water on all our fun. This is such a big idea that corporations should think carefully about how to jump in. Over the next few days I will be posting my thoughts for implementing Open Innovation in a corporation, particularly a large corporation. I've found using a framework to construct an implementation plan helps you consider issues you will encounter before they arise. I will be using a framework called the Ten Commandments of Change Management for devising the plan:

Ten Commandments of Change Management

1. Analyze the organization and its need for a change
2. Create a shared vision and common direction
3. Separate from the past
4. Create a sense of urgency
5. Support a strong leader role
6. Line up political sponsorship
7. Craft an implementation plan
8. Develop enabling structures
9. Communicate, involve people, and be honest
10. Reinforce and institutionalize the change

Source: Kanter, Stein, and Jick. The Challenge of Organizational Change. ISBN: 0029169917, Free Press, 1992, Page 383

The analysis I will do draws on information from Suzanne Harrison’s new book, Einstein in the Boardroom, Henry Chesbrough’s book Open Innovation, the Harvard Business Review article on Procter & Gamble’s Connect and Develop program, Breakthrough by Stefik & Stefik, and my own interviews and experience.

In the spirit of being open, all of these ideas are open for discussion, so please share your thoughts!