1st. Dimension: Strategy

Starting from the beginning

As I grow older, I’m more convinced about one simple truth: “the beginning is a good place to start”. Whenever an organization approaches me “who should we collaborate with” or “what kind of partnerships should we establish” I always answer with another question: What for? What are you trying to achieve with this collaboration? And for me, that’s the beginning.

After asking these questions, some might stare at you with an “of-course-we-know-our-strategy” look, or maybe with a bit of annoyance because “I don’t want questions, I want answers”. But later on, while measuring the success of an Open Innovation strategy, we might struggle if we don’t have a clear idea of where we’re trying to get with it. 

As time pases, and the realities and results of our actions show up, you’ll appreciate any time dedicated to build the right foundations, and to create a proper analysis. It was Einstein who said: “If I had an hour to solve a problem I'd spend 55 minutes thinking about the problem and five minutes thinking about solutions.”. This is part of our analysis, and as such, it will be the time best spent.

Open Innovation is just one of the elements of an organization. And as such it needs to be intertwined, tuned and connected to the overall mission and strategy. This basic idea sometimes gets lost in our daily lives in organizations. Following the “human body” metaphor, we can feel the tension between mind (the have-to-do) and heart (want-to-do) in an organization. 

But how to begin the discussion of the alignment? Based on my own experience and learnings from practice, I’ve created what I call the “Open Innovation Strategy Canvas”. It’s a simple tool that allows a team to begin a conversation, to create a common knowledge and understanding of critical elements of the general strategy and the specific aims of the innovation strategy.

Ideally this canvas is worked in a meeting with the CEO and C-Levels, and then with the innovation teams. Sometimes I’ve used it as a way to share knowledge among Open Innovation practitioners. To this day, I’ve gathered information from 105 different organizations from +10 countries, and 250 professionals (and keeps growing).  Many ask what is the best Open Innovation Practice. As a fair warning I must say that there’s not a correct answer. The most valuable result from this exercise is the discussion per se, the common conclusions, the divergence points identified, and the questions that you will get keep the conversation going with your colleagues and within the organization.

The Open Innovation Strategy Canvas

Inspired by Alex Osterwalder’s Business Model Canvas, and because I share his obsession of “making strategy, innovation and entrepreneurship simple, practical, and applicable”, I've been working for over a year now in creating a simple tool to aid the definition of the Open Innovation Strategy. Something everyone could use for a discussion. 

And so, here I introduce you the “Open Innovation Strategy Canvas”. It’s a strategic management and Open Innovation tool, that allows you to design, define, challenge, discuss, improve and communicate your Open Innovation Strategy and its connection to the overall’s company strategy.

Created in 2019, this is the second updated version of the canvas. You can download the format here:

*Creative Commons Licence: Open Innovation Strategy Canvas by Marisol Menendez is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. Based on a work at marisolmenendez.com. Permissions beyond the scope of this license may be available at marisolmenendez.com

It displays a set of 13 variables distributed in 3 groups, and 4 insight questions. Each of the variables has a general definition, and a set of values to mark your own choice. The values are not an exhaustive value list, but an illustrative selection to facilitate the selection.

In most of the workshops I facilitate, I ask the attendees to answer two questions for each variable: Where are we now? and Where do we want to be? We answer this by adding a mark, sticker or signal on each side of the answer: the present to the left, and future to the right. In this way you can get a visual map of the differences. You might select more than one option, and even indicate a degree of agreement depending on how you position your sticker. The canvas can be used as the user wishes, as long as it reflects what they’re thinking, and it helps to reflect on the strategy.

We’ve even used it to answer “what I believe vs. what the company has” or “my organization vs. my partner”. The possibilities are varied. But before exploring how to use the tool, allow me to explain the canvas itself.

Header: General information

At the top there’s a space for the name of the company, name of the participant, job title and date. Company is important if the session is with more than one company, or department if you’re sharing with different departments. The date is also important because you can repeat this exercise in the future and compare. The strategy is not static, it changes through time. It’s interesting to compare evolution and perspectives.

Strategy Variables

This group of variables is related to the general strategy of the company. Here we want to discuss the role and impact of the innovation strategy we want to implement. Ideally we would unearth differences of opinion and move towards an agreement on them.  

Remember that there are no right or wrong answers. Strategies come in all shapes and sizes but there needs to be a common understanding on what we want to achieve with our strategy. 

• Distance to Core: How far do we want to get with the collaboration? Do we want to affect core activities? 

  • Core: Exposing critical activities 

  • Mid-Layer: Connected, but not all the way to the core

  • Crust: Just willing to expose external activities, with no direct impact on the core

• Time Frame: When do we want to get results? There might be a combination of short term and long term bets, but this needs to be clear to all. Are we willing to wait for results in the long term? Is there urgency to get fast results? Please note that the range of short-term and long-term spans might change depending on the industry. Even in this post-pandemic era timings and perception of time have been deeply impacted in innovation projects, and might be affected by urgency.

  • Short Term: Results in 1 year or less

  • Mid Term: Results in 2-3 years

  • Long Term: Results in more than 3 years

• Depth of Change: How deep are the changes that we want to do? Are we undertaking this just to survive and thus we just want to improve what we have? Or maybe we’re willing to go to the unknown and want to rewrite the common concepts? Are you aiming for disruption or implementing transformation to adapt to other changes?

  • Improving: Improve or create efficiencies in current business / products / markets

  • Transforming: New value propositions either in the current market or new market for current value propositions.

  • Disrupting: New markets, models, products beyond current borders

• Certainty of Result: How comfortable are you with the unknown? This is also a measure of the risk you’re willing to take. Consider that with less uncertainty you get more control, but also the possibilities of gain are less. Willing to explore uncertain results implies tolerance to failure and willingness to invest in that exploration.

  • Defined: Results guaranteed

  • Mixed: Expected results

  • Uncertain: Tolerance to failure

• Business Model: What’s the business model supporting your innovation strategy? This will also affect the kind of relationship you have with your partner.

  • Acquire: I want full ownership of the innovation

  • Partner: Join existing businesses / products, and create a continuous collaboration

  • Co-Develop: Develop together the new product/service, and maybe even create a new organization to manage it.

Internal Organization Variables

This group of variables related to the positioning of the organization as it is, and how the assets are integrated to the current value:

• Geography: based on the current footprint of our organization, we can decide where we want to have impact. I’ve seen organizations wanting to impact the entire world (even without global footprint)... How far do you want to get? For example, Google’s mission is “To organize the world's information and make it universally accessible and useful.” Clearly they want to create a global impact.

  • Our Country: Only focused in countries where we have presence

  • Our Region: Want to impact broad region or set of countries

  • Global: Worldwide impact or impacting countries beyond the current footprint

• Property: This is about your ownership policies: for IP, data, customer base... How is the internal policy? And how do you want to collaborate? Who will own the innovation?

  • Mine: I want to own 100% of it

  • Shared: I can negotiate with my partner how far I want to get

  • Yours: 100% belongs to others. 

Open Innovation Variables

This group of variables define the Open Innovation strategy specifically. For deeper insights I suggest exploring Henry Chesbroughs concepts on Open Innovation. “Explicating Open Innovation: Clarifying an Emerging Paradigm for Understanding Innovation” by Chesbrough & Bogers *(1)

• Direction: It’s the direction of the flow of knowledge between organizations. It’s also related to the scarcity/excess dynamics of innovation, where one organization can share whatever they have in excess to others and combine elements to create new elements. 

  • Inside-Out: The organization exposes knowledge to others. A common example of this are the API platforms, where a specific organization shares technology or knowledge so others can build over them. 

  • Coupled: Bi-ridrectional. Implies combined knowledge inflows and outflows between actors in the innovation process

  • Outside-In: To absorb knowledge from others, and cover scarcity spots. Common examples of this are the challenge competitions.

• Internal / External: What is the combination of resources you want to apply for the innovation efforts? Remember that you can have Internal Open Innovation (by connecting internal departments of the organization and letting knowledge flow). 

  • Internal: The team involved will be 100% formed by members of the organization 

  • Mixed: Combined

  • External: All of the team will be outsourced or part of other organizations. They won’t belong to my organization (for example, the developers of apps in the Apple Store)

• Scope of Action: How far do you want the effect of your innovation impact? Is it within your company or you want to generate a broader impact? You can say that it’s related to horizontal impact.

  • Our Company: Just Us

  • Our Sector: affecting the sector in which we operate

  • Other Sectors: Impacting other sectors as they’re related to a broader vision

• Level of Impact: This is related to the vertical impact. How are the different levels of the organization and / or society active and affected by the innovation? Are they involved?

  • Decision Makers: Strategy Owners such as CEO & C-Levels, President (government decision makers), Top influencers that may bring others onboard.

  • Executive: Strategy Executors. They own the budget and priorities and make tactical decisions on the execution of the projects.

  • Ecosystem: All employees / members of an organization, and even the general public or broad ecosystem. On this level we’re affecting the culture.

• Intended Results: What are the elements that you’re seeking to improve with your innovation strategy? This is an interesting discussion, and even more productive when including different departments of the same organization.

  • Process: To create efficiencies and internal improvements. 

  • Product: To create new products or improve the definition of the products as they are. It can imply create new products

  • Market: To expand or access new geographies or customer segments

  • Business Model: To create new value propositions or value capture mechanisms

• Stakeholders: Who do you want to relate with? It’s become “trending” to collaborate with startups, but there are many possibilities in the collaboration game. These are some examples. And I invite you to think who are your closest friends / collaborators nowadays? And who do you wish to work with? I always say that in the overall perspective, each stakeholder has its own role in the innovation ecosystem and you decide how to play the game:

  • Corporates: from competitors to companies in other markets, great possibilities come from corporation collaboration. Corporations have infrastructure, customer base and relation with the regulator. 

  • Startups: They are the innovation lab of the world

  • Investors: inject money to the system, as gasoline to keep the engine running

  • Hubs: (accelerators, etc.) connect stakeholders to create connections that wouldn’t have happen without them

  • Government: Create the basic roads, regulation, infrastructure, to allow innovation to work

  • Academia & Universities: Have two speeds for the work. One related to the students that are currently training, and the other to the researchers and knowledge generation front.

  • Experts: Individuals who are leads on their fields

Insight Questions

Some final reflections in order to set the grounds for discussion:

• What are your main strengths?: To identify what you put on the table for the collaboration game. Or put in terms of abundance / scarcity, what do you have in excess and can share with others?

• What is your main challenge?: To understand what you need help with, what your partners should bring in. This helps to maintain the right focus on the collaboration search.

• How satisfied are you with the Open Innovation process you currently have? You might be a seasoned professional in Open Innovation and be completely satisfied, or maybe it’s time for a change

• How urgent is your need for change? Rate the urgency of a change. Is it urgent? Or maybe not urgent but it’s good to figure out the next step

• Are you a leader or a follower? There are different profiles for the innovation strategies. Some are first movers, others prefer to follow. What is your preference?

• What is the level of maturity of your OI Process? Remember that Open Innovation as a framework is fairly new in the business world. Even so, some companies are mature in their collaboration and Open Innovation process, while others are just discovering it. Where are you positioned right now?

Solving mysteries

As I said before, the value of this canvas comes from the possibility to have time for reflection, common ground for discussion with your peers and a way to share points of view.

When worked properly, this tool can be a good aid to - what I call “Solving Mysteries”. As a fan of mystery novels sometimes I find similarities to what we’re doing here. And here is what I refer to.

• The mystery of the secret strategy: In one of the organizations I worked with I was asking for the company strategy, so we could validate if the innovation strategy was helping to that broader vision. And one time and another I got the same answer: “I can’t share the strategy with you”. Or “I will only share one screenshot of one page, but please don’t say I gave it to you”. And frankly, I wasn’t hunting for the trade secrets here… just to answer the simple question: what do we want to achieve as a company? In this way we can always evaluate if what we’re doing helps or not to fulfill that goal. Are we building a cathedral or an apartment building? By sharing this global vision we will have an empowered team, which can make more agile and intelligent decisions. With the OI Strategy Canvas you can have a tool to define and communicate specific elements of the strategy.

• The mystery of the schizophrenic strategy: You can find yourself in situations where the indications are “Work in disruptive innovation, but only in projects with guaranteed results and immediate impact”. I have some news: disruptive innovation doesn’t have guaranteed results and they’re not immediate. Disruption requires patience. There’s incompatibility in some variables, and if you push this incompatibility through the organization there will be inefficiencies, re-work and worse: frustration, friction, tension and even burn-out. Better make sure that the variables are congruent and well known by everyone.

In future posts I’ll share learnings and discoveries from the sessions I’ve facilitated. I’m working to understand if we can identify patterns on the innovation strategies. On the current situations and the future and maybe common learnings. 

At some point maybe we can identify “innovation profiles”, as in fashion magazines where you can find if you’re winter or summer by answering a test. And maybe we can also share best practices for each profile. At the moment, it’s a pure exercise of Open Innovation to share learnings and experiences. 

It’s a dialog tool and I invite you to work with your colleagues and discuss each of these variables. Is there a common understanding? Is there room for further discussion about specific topics?

Let me know your thoughts, and let’s keep the discussion open!