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Brilliant Management Advice From Google’s Eric Schmidt on How Google Works

Jan Spruijt

This week, Eric Schmidt posted a presentation on Slideshare about Innovation Management at Google. It highlights the role of innovation culture, creativity, talent and more key elements that every organization that thinks about managing innovation should start with.

Read full article: Brilliant Management Advice From Google’s Eric Schmidt on How Google Works

6 Lessons that Innovation Managers could learn from Louis van Gaal

Jan Spruijt

This article was written before the powerful match against Spain last Friday and states that there are 6 reasons why Louis van Gaal can beat Spain: the lessons from Louis van Gaal. These lessons also translate perfectly to Innovation Managers. These are the 6 management lessons from Louis van Gaal to Innovation Managers:

1. An Innovation Manager is nodest
2. An Innovation Manager puts the individual in the middle
3. An Innovation Manager understands the power of the media
4. An Innovation Manager puts proces before outcome
5. An Innovation Manager embraces life-long-learning
6. An Innovation Manager changes tactics

Read full article: 6 Lessons that Innovation Managers could learn from Louis van Gaal

Where does ‘The Innovation Funnel’ come from? A short history.

Jan Spruijt

This great article from 2011 by Gerry Katz provides us with an overview of the different models that have been developed around innovation processes and New Product Development. In short:
— 1980: New Product and Development Service Process (Hauser)
– 1986: Stage Gate (Cooper)
– 1992: Innovation Funnel (Wheelwright & Clark)
– 1992: New Product Development Funnel (McGrath)
– 2005: Innovation Funnel (MIT)

And he proposes a new design in the end. The article, however, misses the evolution of Open Innovation.

Read full article: Where does ‘The Innovation Funnel’ come from? A short history.

Business Model Innovation: Ten Lessons from Nonprofits

Jan Spruijt

What keeps business leaders up at night? If it’s not their company’s ability to streamline operations and lower costs, it’s whether their teams have the vision to see future opportunities and the flexibility to pursue those opportunities faster and more profitably than competitors.

Read full article: Business Model Innovation: Ten Lessons from Nonprofits

3 aspects in which Open Innovation companies distinguish themselves: results from science

Jan Spruijt

Recently, the Open Innovation Research Forum – part of the University of Cambridge – released a paper that shows results of a study among almost 1200 German innovation companies. The paper provides the hypothesis that several different innovation-enabling factors would generate more revenue within companies that embrace Open Innovation than within companies that don’t.

To be precise: the authors refer to Open Innovation as the use of “search openness”, i.e. the use of external ideas and developments as an influx for internal research and development. According to research findings, almost 70% of these companies indicated they absorbed external knowledge from one or more source. Because it is near-to-impossible to gather information on all these sources, the authors focused on gathering data on the influx of ideas from 5 sources: customers, suppliers, competitors, research institutions and government.

Most importantly, they defined four “moderating factors”: factors that could distinguish organization that absorb from the above-mentioned 5 sources from those that are not. Explanation of these four can be found in this table:

Factors distinguishing Open Innovation companies Characteristics used in study
Technology Leadership
  • Focus on Technology Leadership
  • Focus on Leadership in New Product Development
  • Focus on Leadership in New Process Development
  • Focus on Introduction of Entirely New Technologies
Incentive System
  • Use of Innovation Performance Indicators for Staff Assessment
  • Use of Tangible Incentives for Innovation Managers
  • Use of Intangible Incentives for Innovation Managers
  • Use of Incentives for Idea Development by Staff Members
Research Capacity
  • The ratio between firms’ R&D expenditures and their revenues.
Cross-functional Collaboration
  • Cultivation of Informal Internal Exchange Networks
  •  Joint Development of Innovation Strategies
  • Open Sharing of Innovation Ideas and Concepts
  • Reciprocal Support with Innovation Challenges

Table 1: four factors that are studied.

Study:

The authors gathered information from 1170 different organization, mainly from Germany. They are based upon a larger survey of which only a certain percentage was led to useful information regarding this study. The sample group spreaded out across several sectors:

Sample

For more information about the methodology used, please see the attached document.

Results: what factors are more present in Open Innovation organizations?

The study reveiled that 3 out of 4 hypotheses showed different results for companies that act on Open Innovation compared with companies that do not act on Open Innovation.

  1. The Incentive System: having a high Incentive Design, companies that use Open Innovation generate much more revenue from New Products.
  2. Research Capacity: having more research capacity, companies that use Open Innovation generate more revenue from New Products.
  3. Cross-Functional Collaboration: having higher cross-functional internal collaboration, companies that use Open Innovation generate more revenue from New Products.

The study also showed that Technology Leadership, although, like the rest, is generating more revenue when more present, doesn’t show significant differences between companies that use Open Innovation and those that don’t. In other words: Open Innovation companies with great system of Technology Leadership don’t necesseraly generate more revenues from new products, then Closed Innovation companies with a great system of Technology Leadership.

This figure shows the results:

Results

Download the paper:

Click here to download the full paper.