Turbocharging Open Innovation in a 100-Day Blitz
A 100-day open innovation blitz can help fast-moving consumer goods (FMCG) companies fill the pipeline with higher-quality ideas, break down old ways of working, and build momentum for ongoing innovation.
How do you transform a complacent, conventionally-minded consumer goods manufacturer into an engine for innovation? There are no quick or easy answers to this question. The journey can be lengthy and transformational, one that requires CEO leadership, vision, and stamina. But companies that get the first steps of the journey right are those that are most often rewarded.
As markets stagnate, branded competition intensifies, and private labels eat away at market share and profits, the answer is to think bigger—to take bolder, more ambitious actions to pick up the pace of innovation and expand its scope. Open innovation (OI) is a strategic way to fill pipelines with high-quality ideas. OI draws on many sources—customers, suppliers, employees, strategic partners, and even consumers—to generate, develop, and commercialize innovation (see figure 1).
The OI concept has its roots in the technology industry, where short product life cycles require a massive, sustained rate of ongoing innovation, and the idea of a "base business" is all but nonexistent.
OI is helping to achieve astonishing results: significantly higher rates of innovation success, faster time-to-market, and greater agility to respond to cost pressures. Our analysis shows that the most successful innovators systematically leverage innovation ideas from multiple sources, manage multiple parallel relationships, and screen, track, and develop targets for those ideas.1
But for every OI success story, there are many more examples of misses, false starts, and marginalized programs where OI has failed to feed the innovation pipeline (see sidebar: Why Many Open Innovation Programs Don't Deliver).
So how to avoid the pitfalls and make OI work for you?
100-Day Open Innovation Blitz
A 100-day OI blitz can be a powerful tool to drive immediate wins, build momentum, and engage employees in ways that instantly begin to break down traditional work constraints. The blitz intensively restages open innovation efforts under a unified program, and it ties the different strands together with a purposeful communication and change management approach. Launching sequential waves of OI tactics and events shapes how the organization approaches innovation going forward.
The tactics and events can range from local to global in scope. They can include everything from innovation summits, to internal or external innovation competitions and dialogues, to online forums.
What follows are the main elements in designing and executing an effective 100-day OI blitz—one that not only creates new innovation capabilities but also jump-starts an innovation-minded culture.
1. Lay out an innovation strategy and OI needs
Every successful 100-day OI blitz starts with a robust strategy that sets out an overall aspiration for innovation, the role that OI plays within that aspiration, and specific, measurable OI objectives. Once a strategy is in place, the OI challenges are defined, potentially covering a wide spectrum of topics: from white-space product ideas around a specific end-user need (such as healthier products or afternoon snacking for an FMCG manufacturer) to solving a manufacturing or technology constraint. The innovation challenge must be focused enough for partners to attack it successfully, but broad enough that breakthrough ideas can surface.
For example, we helped an FMCG manufacturer overcome its challenge in developing a lower-cost sealing technology for food packaging. We began by broadening the challenge to include other methods for reducing product costs, which allowed the company to tap into expertise from a larger set of suppliers. The supplier responses created an entire pipeline of different solutions, from new processing and filling technologies to distribution solutions and even entire packaging alternatives.
Broadening and pivoting innovation challenges is just one way that OI can deliver new and unexpected solutions to high-priority innovation needs.
2. Match challenges to tactics
Once the challenges for the 100-day blitz are defined, each one is matched to suitable OI tactics, such as crowdsourcing, key supplier or employee involvement, or even collaboration with companies in other industries facing similar challenges. The trick is to continually engage hundreds of partners, finding an efficient way to distill the best ideas and make sure they do not fall through the cracks (see figure 2).
One of our clients had been fairly successful with a number of OI challenges, but had only pursued OI tactics involving its current suppliers. In the 100-day blitz, the company created a full portfolio of OI topics, ranging from close-in incremental improvements to disruptive and even revolutionary changes to create new consumer habits. Many of these issues could not have been successfully addressed with current suppliers; they required that the company expand its innovation network to include adjacent industry peers (in one case, a non-competing retailer in a different region), consumers, employees, and others. A major benefit this FMCG company took away from the blitz was a strengthened capability to scout and screen potential partners without becoming dependent on imperfect alternatives such as OI brokers.
An innovation brief is a good way to get partners' creative juices flowing around the right ideas. A well-developed brief scopes the problems with precision, giving collaborators the information they need to focus while striking the proper chords to excite their imaginations. The appeal to emotion can be very powerful. Sharing information, allowing partners to build on other ideas, and treating them as equals are essential to developing a productive relationship. In some cases, such as supplier competitions, financial rewards may also be required. In other cases—for example, in strategic relationships with suppliers or peer companies—resource commitments and risk sharing may be more appropriate.
3. Refine good ideas and drive them into the pipeline
Less than 10 percent of ideas generated by OI models are strong enough to be commercialized, so it's critical to develop and filter them quickly. A 100-day blitz applies techniques such as rapidly developing business cases to get to those high-potential ideas fast.
For example, one of our OI clients had historically shied away from crowdsourcing styles of OI because it was simply unable to handle the deluge of underdeveloped ideas it received. We began with a crowdsourcing approach, but one solely focused on two groups—inventors and graduate students. A series of simple filters allowed us to quickly rate the most promising ideas, with the highest-scoring teams invited to a rapid refinement workshop at the client's corporate headquarters. The workshop placed students and inventors in teams with people from the company's marketing, finance, and R&D groups to refine the ideas and assess their operational and financial feasibility. As a result, the client not only obtained new innovation ideas, but also created an ongoing mechanism to quickly filter and refine ideas for future projects, and even hired a few of the participating graduate students.
4. Change the way you work
While established ways of working may sustain and grow the core business, they often do not allow the space or environment for supporting true OI. So the next step is integrating innovation into the culture of the organization. This starts at the top, by requiring corporate executives to spend significant time on OI activities, rewarding risk taking and employee participation, and naming senior-level champions for specific OI ideas.
The 100-day blitz has several important benefits for the company culture. It immediately feeds the innovation pipeline with new and potentially more innovative ideas, and rapidly and visibly begins to alter the way innovation is pursued. It also provides a way to quickly build, test, and refine a set of repeatable tactics that can be turned into continuous cycles of OI.
The blitz is most effective when pilots are rolled out in rapid succession (see figure 3). Drawing lessons from the pilot, teams refine and codify a process for conducting future OI cycles. For example, one of our clients launched a strategic supplier event to solve a manufacturing process challenge. The 100-day pilot involved four suppliers in a single geography: two current suppliers, one alternative supplier, and an additional supplier from an adjacent industry (in this case, pharmaceutical manufacturing). The company used the pilot to refine the process, tools, roles, and responsibilities for executing future supplier events. On subsequent occasions, this approach was then expanded to involve a larger number of suppliers and multiple geographies with impressive results.
A process begins of operationalizing innovation within the core business, creating a new set of normal processes and rhythms. Employees actively participate in innovation and problem-solving activities, which are reinforced by including OI in annual performance reviews. OI is transformed into a core competency instead of a curiosity, and new ways of working are embedded into the corporate DNA.
Importantly, successful OI should defy old ways of working and so should feel at least a little bit uncomfortable. The telltale sign of incrementalism is when organizational resistance to OI programs is absent.
An "All-in" Proposition
There is no silver bullet that will turn a company into an innovation engine. It can be a long, multi-year process that requires visible senior executive sponsorship and commitment throughout the organization to truly change the way people work. Open innovation is one area that can make an impact quickly, get the organization working on the right activities, and create a culture of innovation. The 100-day OI blitz ensures that OI is an "all-in" proposition. Every company should have high expectations for how OI can help drive real business results, and should challenge the organization to get started now.
1 See "Innovation Management: Strategies for Success and Leadership" at atkearney.com.