3rd Annual World Open Innovation Conference (WOIC)
I recently attended a week-long affair on Open Innovation (OI) facilitated by Henry Chesbrough (Berkeley Haas in Berkeley, California) and Wim Vanhaverbeke (ESADE Business School in Barcelona, Spain). This exceptional program included the 3rd Annual World Open Innovation Conference (WOIC 2016), as well as a pre-conference Ph.D. seminar and post-conference design thinking hackathon led by graduates of the Stanford University Institute of Design (d.school).
A brief definition of Open Innovation
Open Innovation (OI), coined and promoted by Henry Chesbrough (2003), refers to “the use of purposive inflows and outflows of knowledge to accelerate innovation” (Chesbrough, 2006). Chesbrough’s definition implies (A) a growing need for firms to interact with knowledge actors outside their respective organizational boundaries and (B) that the deliberate management of knowledge-exchange routines fosters positive innovation outcomes. Both points are briefly discussed below, based on discussions with Chesbrough during the Ph.D. seminar.
A — The OI framework of inbound and outbound knowledge flows recognizes that the logic that supports an internally oriented and centralized approach to research and development (R&D) has become out-of-date. Whereas in the past internal R&D was considered a valuable and strategic firm asset (e.g., an imposing barrier to entry by competitors), toward the end of the 20th century, however, a number of macroeconomic factors combined to erode the foundation of closed innovation in the United States. One factor is the rise in the number and mobility of knowledge workers, making it increasingly difficult for firms to control their proprietary ideas and expertise. A second factor is the growing availability of private venture capital, which has helped to finance startups and their efforts to commercialize novel ideas. A third factor is the information revolution (e.g., supported by information technology and the Internet), which has fostered more fluid knowledge transfer and helped to establish a world of abundant information. A fourth factor is that the cost of R&D continues to increase, in part due to the reduced productivity of R&D and the growing need to replace patent expirations and concomitant loss of revenue. For example, in the pharmaceutical industry, the number of potential revenue-generating drugs as a percentage of R&D expenditures has fallen sharply (Paul et al., 2010).
B — OI speaks to the deliberate management of knowledge flows across organizational boundaries. While OI practices are certainly knowingly deployed by a focal firm, the OI concept readily acknowledges the possibility that novel knowledge subsequently generated from such partner exchange may be unintentional ex ante (i.e., unplanned) and can lead to unintended breakthroughs (i.e., a beneficial economic outcome). It is interesting to note that it is precisely the purposeful deployment of OI management practices that provides the means for serendipity to sometimes occur, as diverse knowledge is on occasion inadvertently and creatively recombined in unplanned ways. In short, innovation processes are driven by the purposive management of diverse sources of thinking and research.
The Barcelona experience
The third edition of the World Open Innovation Conference (WOIC) took place for the first time outside Silicon Valley on December 15-16, 2016 in Barcelona, Spain. The event, organized by the Garwood Center for Corporate Innovation at Berkeley Haas, assembled 250 industry practitioners from large firms (e.g., Janssen, Kaneka, Huawei, BBVA) and academics focused on large-enterprise innovation. The sessions were divided between practitioner and academic tracks. I enjoyed both conference tracks, but the practitioner track provided a singular opportunity to brainstorm solutions in small teams in response to a given open innovation challenge introduced by a high-level firm executive. It was remarkable how candid these executives were with conference attendees as well as how many insights were generated by temporary teams within the allotted 90-minute group discussions. It struck me as an effective avenue for practitioners and academics alike to interact, thus creating a scaled-down model of OI in action.
One of the keynote speakers at the conference was Ferran Adrià, who I lectured on as part of our Creative Entrepreneurship course in the Tilburg Center for Entrepreneurship (TCE) Academic Program at TiSEM last Fall (a blog post describing the course I co-lecture with Professor Tal Simons is planned for sometime in Q2 2017). Adrià is a famous Catalan chef who received the culinary arts’ highest praises for his elBulli restaurant including three Michelin stars and the title of “best chef in the world”, while using scientific principles to discover higher-order formulae and to develop 1,846 novel dishes. In 2011, Adrià definitively closed the restaurant at the height of its popularity, with 2 million people requesting reservations for the 8 thousand available seats each year. In fact, even if you were one of the lucky few to draw a reservation, you were instructed then which date and time to show up to the quaint seaside village location! Adrià has since extended his creative work in the culinary arts to the examination of innovation practices across different sectors under the guise of the elBulli Foundation, and so this was a wonderful opportunity to hear his reflections and thoughts. Adrià’s speech emphasized the importance of organization and efficiency as the crucial antecedents to generating favorable innovation outcomes (full speech here). It was a bit of a surprise to hear someone so creative emphasize these organizational characteristics, although these concepts are indeed central to the strategic management literature.
The 3rd Annual World Open Innovation Conference (WOIC 2016) was preceded by the Ph.D. in Management Sciences Seminar on Open Innovation & Open Business Models, in which 30 Ph.D. students from around the world participated at ESADE Business School. This intense two-day seminar was led by world-class scholars Henry Chesbrough, Wim Vanhaverbeke, Chris Tucci, and Keld Laursen. It was an unique opportunity to discuss OI at length, as we also spent our lunches and dinners together in addition to all-day presentations. We were also asked to present our research work and to connect it to the concepts raised during the course of the seminar.
Lastly, WOIC 2016 was followed by a post-conference event in which energetic graduates of the Stanford University Institute of Design (d.school) challenged us to “hack” tapas food for millennials within 8-hours. We were assigned to teams composed of six individuals that had never met each other before (10 teams in total) and expertly taken through the d.school’s design thinking process. This technique is extraordinarily well-adapted to fostering the creativity of temporary teams in a purposive manner. My team, composed of academics, designers, and entrepreneurs, spent most of Saturday developing an original concept and working on prototypes for a novel service that bridges online and offline relationships for millennials. The idea was to develop a series of tapas in various forms of lips to represent different types of kisses, which can be shared virtually (online) as well as redeemed in a physical retail location (offline). I’ll spare you all the details, but we were excited thanks to everyone’s input.
In conclusion, just as Open Innovation (OI) recognizes that purposeful interaction with actors external to one’s firm boundaries is crucial to produce innovations, this exceptional week-long experience similarly offered considerable “food for thought” stimulated by conversations with diverse industry practitioners and academics beyond the borders of my institution. I returned (re)-invigorated :-)
Chesbrough, H. (2003). The era of open innovation. MIT Sloan Management Review. Spring 2003, Vol. 44 Issue 3, p35-41
Chesbrough, H. W. (2006). Open innovation: The new imperative for creating and profiting from technology. Harvard Business Press.
Paul, S. M., Mytelka, D. S., Dunwiddie, C. T., Persinger, C. C., Munos, B. H., Lindborg, S. R., & Schacht, A. L. (2010). How to improve R&D productivity: the pharmaceutical industry's grand challenge. Nature Reviews Drug Discovery, 9(3), 203-214.