I suppose I have mixed feelings about open innovation. I love the concept and am fascinated by the idea of gaining access to new capability regardless of where it’s created; and I can’t help being wooed by some of the things that so-called father of open innovation Henry Chesbrough has said over the years. (“In a world of abundant knowledge, not all smart people work for you,” is how he started his seminal 2003 Harvard Business Review article.)
But, equally, I remain cynical. And the more I speak to members of our community about Supplier-Enabled Innovation, the more cynical I become. (For a start, some of those I have spoken to have played a significant part in closing down their company’s open-innovation programme.)
For me, the problem is that open innovation is conceptual; an intellectual and academic theory that argues that organisations shouldn’t close their doors to ideas and innovation from the outside world.
This is absolutely right, but it isn’t very prescriptive. Nor is it particularly focused.
So, with that in mind, catching up with Lucia Chierchia, open innovation manager at Electrolux, and the woman responsible for the company’s SEI initiative, and to whom I’d been introduced to by CPO Gregoire Letort, was always going to be interesting.
Chierchia works in R&D, and I’m far more used to hearing about SEI being led by procurement, but from the outset it was clear just how closely the two work together.
“I see the research & development staff in suppliers as an extension of our own R&D,” she said, before explaining how her role was to act as the link between the external world and the business.
While procurement works extremely closely with Chierchia, and Letort has a number of people dedicated to innovation, there’s no doubt that SEI is a component of Electrolux’s overall drive for external innovation rather than a procurement-led programme in itself.
That’s not to say it’s any less valid. Procurement is intimately involved, and Letort sits on its Open Innovation Board, which meets quarterly to assess potential ideas and business proposals put forward for investment potential.
The process Electrolux follows to access new innovation is known as the Challenges Process, and is a sequential system for:
- Identifying business needs (what it refers to as Challenges)
- Launching those challenges to a group of stakeholders (it refers to these as networks)
- A scouting exercise
- Idea and proposal filtering
- Promotion to the Open innovation Board (OIB) ahead of potential investment
The networks referred to in stage 2 include both non-trusted sources (potential new suppliers, start-ups etc.) as well as external trusted sources (essentially suppliers), and it’s in this space that Letort and his team are hands-on involved, to “inspire external networks to propose solutions in line with Electrolux’s strategic directions”.
I’ve seen some of the results of the work being done by open innovation and procurement to unlock SEI, and they are impressive and ongoing. Indeed, a couple of days after I spoke to Chierchia, Letort emailed to say that the OIB had again met to review a number of new proposals, a good proportion of which were selected to move towards feasibility.
Two things strike me from all of this. First, open innovation is just a mind-set that companies must look outside their organisations for solutions to their business needs, rather than a process or methodology in itself, which makes it much easier to accept and much harder to be cynical about; and, second, that there is no “off-the-shelf solution” for SEI.
It works for SEI to be led from within R&D at Electrolux, at other companies this would be far from true. What’s more important is that the right stakeholders are involved at the right time, that processes are put in place and that long-term goals are in place.