Open Innovation Gives Lifetime Brands a $50 Million Boost
How one major US company is seeing an improved bottom line by reaching out to individual inventors though its open innovation programs.
Lifetime Brands, United States
Lifetime Brands, a North American company that designs, develops and markets a range of branded kitchenware, home and lifestyle products regularly seeks outside innovation. It recognizes there are lots of people out there with an abundance of ideas.
“Open innovation is a way to get all of the folks that work outside of the company to be able to submit ideas to our company,” said Bill Lazaroff, the head of Industrial Design and Product Development at Lifetime Brands.
“For companies that just look insularly at their own people, after a time you are going to get a lot of stagnation, you are going to get the same kind of ideas over and over again about the same types of things.”
Hungry for Ideas
The company launches thousands of new products every year under multiple brand names including Farberware, Kitchen Aid, Mikasa and Pedrini. It is always hungry for new concepts to augment the work of its in-house innovators. Those ideas may not be revolutionary new products such as the iPad or smartphones, but they are the kinds of everyday objects that make life easier and sell well.
One of the home-based inventors who answered the call is Thaddeus Alemao a former banker who invented an odor-absorbing splatter screen for cooking. He took the idea to Lifetime; they loved it, made some modifications, and put 10 different versions on the shelves of major retailers.
Commitment to OI
Open innovation has not replaced Lifetime’s R&D department. The firm has more than 100 engineers and designers working on their own concepts as well as those of external innovators.
Lifetime is so committed to open innovation that it has hosted an “Inventors’ Day” at its headquarters and signed up Warren Tuttle, the President of the United Inventors Association (UIA). He acts as the company’s talent scout, and details of how to submit ideas to him are on Lifetime’s website.
Not surprisingly, Warren receives many submissions at all stages of development. He presents what he views as the most promising ones to Lifetime. The company can then turn the idea into a prototype in no time at all with its prototype machines and 3-D computer-aided design software.
According to an article in Long Island Newsday this approach has resulted in 30 products from about 15 different inventions in the year up to July 2012.
When ideas are given the green light inventors negotiate a deal that typical involves an advance on royalties of between 2% and 5%.
OI is a Money-Spinner
Open innovation has been a massive boon to the company. In a rapidly changing market where consumers demand newer, better and more innovative products, Lifetime’s product pipeline is continually refreshed with original gadgets and creations.
Since 2009, the company claims that products developed via open innovation have generated around $50 million in retail sales.
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