Visionary Approach to Open Innovation
Interview with Reuben Oder, founder, Reuben Oder Innovations
By Paul Arnold
Reuben Oder is the founder / Principal at Reuben Oder Innovations, LLC, a consulting firm that guides companies as they discover how to customize and successfully deploy proven OI approaches.
He is also a visionary who’s devised a novel approach to OI called Integrated Open Innovation and is advancing plans for an international open innovation consortium.
Reuben holds no fewer than 19 patents and prior to founding his own consulting firm enjoyed a very successful 25-year career at Proctor and Gamble. It was there that he came across the concept of OI, although he did not particularly welcome it at first.
I first heard about open innovation when our CEO A.G. Lafley set a goal that fifty percent of our innovation would come from outside the company. That happened at a time when P&G was struggling because we weren’t getting enough innovation into the market so our stock took a big hit.
When the goal was announced I looked at my colleagues in R&D and wondered if it meant that half of us would be out of a job. To exacerbate that, broad partnering externally was foreign to us, we were fairly insular. I mean 25 years ago I couldn’t even talk about my project with other P&G people unless they had a need to know. That’s how secretive we were.
What eventually convinced you of the merits of open innovation?
I think it was partially my roots. I didn’t start at Procter and Gamble. I had worked at a lot of smaller companies and within that context you are more accustomed to not having the resources to get work done. So you are more likely out of necessity to reach out for people to collaborate with.
You have come up with a unique OI approach called Integrated Open Innovation. Could you tell me a little about it?
Open Innovation is all about having a mindset that someone out there can help me with my project. They either have the answer or can collaborate with me to get the answer. Integrated Open Innovation (IOI) is partly a mindset and partly a work process where you strategically say I’m going to use open innovation. I’m going to look at my business strategy and the innovation strategy that comes out of that. Then I’m going to fill the gaps within my innovation strategy with open innovation. And then lastly, within that work process, I’m going to leverage partners.
What sort of partners?
The first level of partnership is with companies called open innovation service providers. They serve as an open innovation intermediary to reach out and find solutions to technical problems, often from other industries. But it doesn’t stop there. It also means using these tools to find experts. If there’s not already a solution out there, who’s inventing in the space that I’m interested in? And will they collaborate with me?
Some Open Innovation Service Providers have expert databases you can review to find the type of expertise you need. These experts have signed up to be available to help you on a project by project basis. You can also try to find them by doing patent searches to discover who’s active in a particular area of science you are interested in. But they may or may not be incentivized to collaborate with you. Integrated Open Innovation is about work process, knowledge of how to use various the various Open Innovation Service Provider tools, and then applying those to your innovation process. That is, weaving it in to your internal systems.
Who can make use of it?
Let me back up a little before answering that. Most of the open innovation that happens is one to one. However, in today’s resource constrained environment, there is growing interest in one to many - our partners collaborating with each other looking for the added value they could bring by being collaborative. And then going to the multinational companies with a suite of services.
At P&G that was always a wish, for those partners and open innovation service providers to collaborate and bring more to us and in a simpler form. Having said that, the integrated open innovation I envisioned was going to be something to help companies inexperienced with open innovation to get started.
So the IOI concept would have a person come in and educate a company on open innovation and help them pilot and address issues like culture etc. Basically they would facilitate adoption of open innovation and experimentation.
I thought it would be focused on small to medium size companies with a few hundred employees. What I’ve learned is that’s only part of it. Giant companies today, again because of the pressures of the economy are operating very bare bones. They want simpler transactions, fewer transactions and fewer overall suppliers because of the complexity that multiple suppliers bring.
So I think even giant companies are attracted to integrated open innovation because one of their folks can multiply their capacity by awarding projects to an open innovation facilitator who can run with it.
The IOI concept is very attractive to multinational companies who might even have experts internally who could go do that Open Innovation project management, but just don’t have the capacity. Other companies, who don’t have that experience, could rely on the open innovation facilitator, the IOI project manager to deliver the overall program when they don’t have that knowledge.
The IOI concept is also attractive to entrepreneurs.
Entrepreneurs are accustomed to getting things done by their own efforts. Next, they feel they can extend their efforts by hiring a captive resource. But finding the right resource, hiring them, and sustaining them (salary/benefits, etc.) is a big decision. A simpler option is to hire the right expert for the current project.
Also, entrepreneurs obviously work a lot of contracts and set up relationships, but getting into open innovation collaboration can be complicated. For example - tapping into one of the open innovation service providers, hiring an expert to work with, setting up that collaboration, getting the wording of the agreement right, building the relationship etc.
Therefore an experienced deal manager who is very familiar with OI is a huge asset to a startup company to help get the collaborations in place. I find myself advising startups about their options and consistently there’s this, ‘you can you do that?’ kind of a response. So I think that there’s a big need for making folks aware that open innovation exists and there’s someone who can teach them how to use it. In fact, there’s a huge need for what I’m going to call an open innovation consortium.
What do you mean by an open innovation consortium?
The mission of the Open Innovation Consortium would be to develop, adopt, and advocate international nomenclature, standards, tools, and work processes to advance Open Innovation (OI) as an approach, which accelerates innovation, grows businesses, creates jobs, and improves lives globally. The focus is on the methodology of OI and a forum where emerging OI issues are discussed and addressed with holistic solutions created by all and available to all royalty free. This is a place where folks interested in open innovation can gather virtually as well as at structured face-to-face forums.
I envision the membership would include OI Practitioners (like P&G and General Mills), of course, but also OI Service Providers (like IdeaConnection) and OI Facilitators (like my company). The members can contribute to things like best practices related to open innovation or contribute tools that others could use. It’s a place to get educated on open innovation and a convenient forum for OI practitioners to have a conversation with open innovation service providers and say here are my needs in the future.
I’m envisioning a nonprofit, some sort of consortium where open innovation capabilities are assembled and folks can tap in to that to either pilot their first open innovation program or to take it to the next level. For experienced OI practitioners it can be a forum where you can ask ‘what if?’ and have conversations to try and stimulate change.
What other services could it provide?
Usually we think of open innovation in terms of a company with a need looking for a solution. Let’s split that for a moment. What if I am a solution provider? I want to be able to approach giant companies successfully and help them understand the value of the business model I have created or the value of the technology I’ve invented.
The open innovation consortium as part of its responsibilities could be educating solution providers so they can meet with giant companies not just with their idea, but also a compelling argument how it’s going to benefit and grow the giant company. If I was a General Mills or a P&G I would want to be involved in that consortium as a way to help educate solution providers so they are better prepared when they contact and pitch to me.
The consortium could also be a cooperation of competitors because they really do have common needs and interests related to Open Innovation. There are examples out there where competitors such as two cosmetic companies might collaborate because together they want to influence regulation related to their industry. So by cooperating and influencing together they’re meeting common needs.
Are you working actively toward the establishment of a consortium?
Yes, I’m actively working towards it. There was a saying at Procter and Gamble that I really liked and I heard in my early days and have never forgotten. Very respected technical folks within the company used to say that your career was all about learn, earn, and teach. So you learned your craft and become an expert. You earned over your career by applying that expertise and then lastly you had a responsibility to teach the new people.
I’m at a point in my career now where I want to have some earnings, but it’s not just about the earnings. It’s about being altruistic, trying to help others. Many others today see innovation as a way to create more jobs in the world and help economies get back on their feet. I think open innovation is a big part of creating jobs and so I like being part of those kinds of things. And I think just as you get older you enjoy being able to apply your expertise to help others. That in itself has its own rewards.
You mention open innovation as a way to create jobs; do you feel that OI is actually accelerating?
I believe that it is accelerating in adoption and awareness. More people are exploring it and I think this is partially driven by some good success stories out there, but secondly it might be what’s happening right now and in the past few years with the global economy. There is the need to innovate in order to differentiate yourself and gain a competitive advantage.
I believe those pressures to innovate stimulate companies to try new things. Open innovation is one of those new things they can try. In addition, people are becoming more and more accustomed to leveraging the Internet to find knowledgeable people who are experts. They are more comfortable with communicating with them virtually and then potentially leveraging them virtually.
Open Innovation is here to stay and those who learn to do it well will differentiate themselves and win in their markets. I hope the OI Consortium accelerates the adoption of OI to the benefit of all. A desire to collaborate is ingrained in us so we just need to simplify processes and educate companies as a way to lower the barrier to trial.