Successful Enterprise Innovation Cases

From "inside-out" to "outside-in", the concept and practice of open innovation are constantly being developed and enriched. In this article, we analyze what types of open innovation there are, and what parts of it are worth learning from, through eight case studies.

I. Intel: Applying External Resources

Intel's approach to open innovation is to apply external resources in the innovation process. Intel's R&D strategy consists of four components: university research sponsorships, open collaborative research labs around universities, in-house research programs, and company acquisitions.

The diagram above depicts Intel's approach to exploratory research. The process begins with a scan of the environment and potential research areas. Interested research projects are initiated through sponsorships, lab research, internal research, or Intel investments, until the results can be seen and a decision can be made to commercialize the product or technology.

Intel sponsors more than 500 universities and places its open collaboration labs around universities that are leaders in their fields. Such labs typically have 20 Intel researchers and 20 researchers from the university. Although such labs are owned by Intel, the research environment is quite open and some of the projects are public. Intel places more emphasis on learning quickly from the larger environment, getting tons of new ideas and acquiring intellectual property. Of course it also has its own internal research activities to get promising inventions. Intel encourages labs to come up with valuable ideas from both internal Intel and individual business unit perspectives. Intel protects the future by updating its strategic plan for research and development every two years. In addition, essentially half of the researchers in the lab are students.

Intel has dramatically increased its investment in R&D over the past decade, and the number of patents issued each year has grown, with Intel receiving approximately 5,000 patents worldwide in 2005. This shows the success of Intel's exploratory research strategy.

II. Cisco: M&A for integration

Cisco's innovation strategy is a combination of in-house development, strategic alliances and acquisitions. It is an active acquirer and investor in innovative companies. since 1993, *** has acquired 108 companies, and 30% of its revenues come from acquisitions and development activities. Another important strategy is collaboration. In the 1980s and 1990s, its acquisition and partnering strategy was relatively unique in the high-tech industry, a strategy that allowed it to acquire new technologies and solutions more quickly.

When a company is big enough, if some employees have a good idea, they find that there is a lot of resistance to pushing it through the company. As a result, many employees tend to go out and start their own businesses once they have a good idea. For this loss of talent and reuse, Cisco's approach is worth a lot of companies to learn from: if the company is willing to start a business, the company and feel that they do something good, they invest in their own support for entrepreneurship. These companies once the success of entrepreneurship, Cisco has the right to prioritize the acquisition, if the small company did not do a good job shut down, Cisco in addition to losing some risk investment is not an additional burden.

Cisco acquisitions are to obtain scarce intellectual assets, basically human resources. At Cisco, one often meets colleagues who are "second in line" or even "third in line". To ensure the success of acquisitions, Cisco has identified three goals that must be met with each acquisition: employee retention, continuation of new product development, and return on investment.

For potential acquisitions, Cisco has specific screening criteria: nearly 25% of the acquisition of the initial investment is not large, mergers and acquisitions must be for Cisco and the acquired company to provide a short-term and long-term win-win situation; the acquired company must be with Cisco with *** with the same vision and fusion, and its location to be close to Cisco. Cisco uses a scenario planning approach to decide whether to acquire and how quickly.

In this way, Cisco outsourced almost all of its production, and by using internal venture capital to support startups, and mergers and acquisitions, Cisco essentially monopolized the technology for Internet routers and other important devices.

Tesla: open source and corporate innovation alliance

Tesla's success has been categorized by the industry as the success of Internet thinking, and Musk's move to open up patents reflects the spirit of the Internet's "freedom, equality, openness, and sharing". "

Tesla's success has been recognized by the industry as a success of the Internet.

Tesla open-sourced all the patents for the purpose of - let more people or enterprises, in a lower threshold, can stand on the shoulders of giants, into the world of electric vehicle development and popularization of the wave. On the surface, opening up the patents is to let competitors take advantage of, however, this move invariably improves the universality of Tesla's technology, enabling it to seize a favorable position in the future standard-setting. Therefore, the hidden effect behind this is that if Tesla patent open source once reached a certain scale, its technical allies grow to a certain size, they have to be compatible with Tesla's charging standard. Obviously, if Tesla establishes an industrial alliance supported by Tesla technology, then I believe that the surplus capacity of the Super Battery Factory will be digested by Tesla's allies, and Tesla is not only a manufacturer of electric cars, but also the controller of the upstream core battery resources.

On January 23, 2015, Musk appeared at the North American Auto Show in Detroit. This time, Musk said Tesla really face the enemy, not necessarily traditional manufacturers and dealers, but users who have been accustomed to the internal combustion engine car, as well as the huge industrial inertia rooted in the traditional business. To break this shackle, the alliance is the best means.

Therefore, Tesla welcomes other car dealers to enter the electric car industry, is to form an "electric car matrix", and no longer fight alone, so that the overall electric car industry will have greater potential, in the market cultivation, policy breakthroughs, technological accumulation, the formation of the electric car industry chain, etc., will form a group ecological effect. It will form the ecological effect of the group and increase the volume of electric vehicles.

So, Tesla needs allies, not enemies. Previously Tesla open patent, also for this purpose. Special fans believe that Tesla is expected to form an alliance organization similar to the Open Handset Alliance, when companies such as Google Samsung is relying on this alliance to pull most of the pizza out of Apple's mouth.

As Musk said, for electric cars to be successful, they need technology from outside the automotive industry and from many other fields, and this ability to integrate and innovate is something that Tesla is better at than any other traditional automaker. Tesla is a good example to tell us that through the form of openness and cooperation, we can get the development of an industrial ecosystem, and we can establish the enterprise technology innovation alliance, which can drive the innovation of the real electric vehicle industry.

Four, Huffington Post: readers become journalists

The Huffington Post (The Huffington Post) called "the first major newspaper on the Internet", in February 2011, America Online to $315 million to buy the newspaper. The newspaper. It is a news and analysis website, founded in 2005. 28 million unique visitors in January 2011, close to the 30 million unique visitors of the New York Times and the International Herald Tribune, which means that it is already in the mainstream media. 30 million dollars in turnover in 2010, at a time when the U.S. newspaper industry is struggling with a dive in advertisements, a sharp decline in circulation and a migration of readers to free news on the Internet. At a time when the U.S. newspaper industry is struggling with diving advertising, plummeting circulation, and a migration of readers to free news on the Web, the Huffington Post stands alone.

Like Tesla's open-source patents and Android's open-source sexuality platform, turning readers into journalists has been Huffington's formula for success. The Huffington Post has more than 10,000 "citizen journalists", similar to traditional media "correspondents", providing coverage every hour of the day. 2008 U.S. election, the Huffington Post will be an interview assignment to 50 to 100 "citizen journalists". The Huffington Post divided an assignment among 50 to 100 "citizen journalists," each of whom could accomplish in one hour a day what a journalist could accomplish in two months. Huffington calls this "distributed journalism." "Distributed" network of a large number of high-quality contributors, UGC mobilization has been stimulated, the media can really live up.

The Huffington Post's model of community-based content production is worthwhile for companies engaged in content production. It has only 150 paid staff members, but relies on more than 3,000 contributors to produce content for every conceivable topic. It has another 12,000 "citizen journalists" who are its "eyes and ears". Its readers also produce much of the site's content, with as many as 2 million submissions each month. Jonah Peretti, co-founder of the Huffington Post***, sees the journalism model no longer as a passive relationship for delivering news, but as "an endeavor between producers and consumers***.

This so-called "****sharing enterprise" is a concentric circle model: at the core are the site's most committed, original, and high-quality bloggers; at the outside are citizen journalists, scattered across the United States; and at the outer ring are readers, who interact with the site's bloggers in the process. This new, more open model of journalism can be thought of as a kind of "crowdsourcing" model, in which two important groups of contributors are bloggers and citizen journalists.

In short, the open platform is a kind of subversion of the media's inherent editorial form. Although some media are now exploring the establishment of UGC information sources, they are still more focused on non-serious news, like Huffington, which is still unattainable by jumping out of the soul. Huffington's open-mindedness is the gospel of China's media troubles, and how we should learn from it, still need to deliberate a lot, but this open content production is already the trend.

Fifth, Haier: building an open innovation platform

In the conversation with Alstini, Zhang Ruimin once said, "Now, we are turning into a kind of open innovation, in the process of interacting with the user, iterating, and integrating all kinds of resources. The iterative process is a trial and error process, and it is important for users to participate, if there is no user participation, no matter whether it is incremental or breakthrough innovation, it may not have much meaning."

Carefully analyze Haier's recent smart home products Haier Star Box, Air Magic, compressor-free wine cooler, etc., are all open innovation products. For example, Haier Air Magic is the world's first modular combination of intelligent air products, humidification, dehumidification, purification, aromatherapy, and other modules of the free combination, for each family to bring a customized exclusive "air circle". The most special feature of Air Magic is that it is an intelligent product successfully developed by Haier based on the concept of open innovation. Air Magic is not a product planned and developed in the laboratory based on the enterprise's own capabilities, but based on Haier's open innovation platform composed of internal and external experts and scholars from eight countries team of 128 people, over a period of six months and more than 9.8 million different types of users around the world to interact with the views of the use of big data analysis, and ultimately sifted out 810,000 fans are most concerned about the 122 specific pain points of the product needs, to become the first step in the development of the core functions of the Air Magic, which can be customized for each family. The original intention of the core function of Air Magic's research and development.

In the Internet era, Haier's philosophy is that "the world is our R&D center," and that the R&D process should involve users and global innovators. Based on this, the Haier Open Innovation Platform was officially launched in October 2013, and was revamped and upgraded in June 2014, with the addition of the Haier Life Creative Community, which will also become an online interactive platform for users to participate in the whole process of R&D and design.

Haier Open Innovation Platform follows the concept of openness, cooperation, innovation, and sharing, integrates the world's first-class resources, wisdom, and excellent creativity, and cooperates with global R&D organizations and individuals to provide platform users with cutting-edge scientific and technological information as well as value-added innovative solutions. Ultimately, it maximizes the interests of all relevant parties and enables all resource providers and technology demanders on the platform to enjoy mutual benefits***. Currently, there are more than 200 cases of successful technology cooperation on Haier's open innovation platform.

Six, LEGO: distributed *** with the creation

LEGO IDEAS platform (LEGO IDEAS) was launched in 2008 in Japan, 2011 launched the global version. On the website, users can easily register and submit program descriptions (usually submitted programs are required to be very detailed, including pictures and descriptions). Fans vote on new kit ideas from amateur designers. Any idea that receives 10,000 votes goes to the review stage, and then LEGO decides which ones make it to the production stage. So this pre-production call for proposals also serves as user interaction, market research, and warm-up work before the product goes to market. So far, the process has created more than a dozen usable kits, including a modeling lab staffed by female scientists and a Big Bang Theory apartment.

LEGO is also actively working with external partners, such as the MIT media lab, to reduce development time by leveraging external R&D efforts. One customer group that has led to even greater open innovation is the "rule breakers". At the time, LEGO collaborated with MIT to develop the Mindstorm robot toy, which was launched not long after the program code was made public by this type of customer. At first, LEGO was furious, but then LEGO chose to open up the platform, and it really did create more and more creative ideas.

Since then, LEGO has utilized this type of customer to explore new ideas or opportunities, and has also set up a LEGO Mindstorm exchange community, as well as actively working with teachers to **** with the development of the curriculum, and now Mindstorm has been the teaching material for many school teachers to inspire more creativity in their students. LEGO, MIT and the user community have formed a complete ecosystem of suppliers, partners, consultants, peripheral manufacturers and professors. LEGO has also improved open innovation through profit*** sharing, intellectual property protection, and other supportive measures.

LEGO has also established a "design by me" design platform, which allows customers to download software that allows them to upload their own ideas to LEGO's platform, and then vote on the winning concepts by customers. The winning concepts are then entered into LEGO's new product development and finally commercialized for sale. "design by me" is a platform that utilizes the wisdom of the group to gather creativity, and with the open innovation policy and related intellectual property protection, everyone has the possibility to be a product designer. By utilizing an open innovation platform, LEGO has been able to shorten the product development timeframe from 24 months to 9 months, while also greatly improving customer satisfaction.

At the same time, LEGO Open Innovation also has a profit*** sharing model, which has been successfully applied in several projects. In order to ensure the successful completion of the profit***sharing model, LEGO has adopted supporting measures such as intellectual property protection. LEGO is a typical example of an innovation model that brings together like-minded parties in the form of distributed **** creation.

Seven, Samsung: Accelerators, investments and acquisitions

Open innovation, will be open software, another world-changing force. Since Samsung has made open source a key strategy for its software operations, it is now taking it a step further by establishing the Samsung Open Innovation Center in Silicon Valley to create a larger talent platform.

Samsung's open source strategy, as well as the Open Innovation Center, revolves around the level of "talent". Samsung Open Innovation Center's work, mainly for startup gas pedal (accelerator) and investment. Venture gas pedal and investment, obviously from the perspective of angel investors, to become an early investor in entrepreneurs. First of all, the traditional recruitment system, has been unable to attract excellent software talent; traditional recruitment system, may be completely dysfunctional. Therefore, Samsung through the Open Innovation Center will be "angel investment" and "acquisition" as the main business, not only to obtain a large number of external innovation resources, but also to achieve the purpose of direct absorption (integration) of talent.

Marc Shedroff of Samsung's Open Innovation Center said, "He believes that gas pedals, investments and acquisitions are no longer an option for Samsung, but a key business. Open Entrepreneurship is a business (Business), so between Samsung and entrepreneurs, it should be a business relationship."

In August 2014, Samsung acquired startup SmartThings, a smart home platform that lets users control all the connected appliances in their homes from a smartphone, tablet, or PC. After the acquisition, SmartThings will continue to operate independently, but its offices are being moved from Washington, D.C., to Palo Alto, California, near Samsung's Open Innovation Center.

Of the acquisition, David Eun, head of Samsung's Open Innovation Center, said, "We believe in the power of openness. The appliances in consumers' homes come from a variety of different companies. As a consumer electronics company, we can work to integrate these appliances onto one platform. We really need companies like Smart Things because it has a software platform that connects all these devices."

In Samsung's open innovation ecosystem, entrepreneurs, angel investors and acquirers, are the top three players. This is expected to be the main business model for the open innovation model from the end of 2013; and will continue for at least five years. At this stage, it seems that Samsung has not only grasped the mainstream value of the industry in the next five years, but also played the dual role of angel investor and acquirer in this wave of mainstream value of open innovation.

Apple: Openness in both software and hardware

For Apple, there are at least three important lessons to be learned.

First, innovation comes from both inside and outside the organization. Apple excels at combining its own ideas with technology from outside, and then packaging them with best-in-class software and beautiful design. Don't rely solely on your own innovation, but be receptive to ideas from outside. Apple's innovative character often leads people to compare it to Edison and Bell Labs. People think of innovation as companies locking up engineers and everyone working together to find inspiration. Instead, Apple's innovation is a skillful combination of its own curation and outside technology, fully packaged in top-notch software and sleek design.

The idea for the iPod music player, for example, was first conceived by a project consultant hired by Apple to combine off-the-shelf parts with in-house strengths, such as a distinctive, easy-to-use control operating system. By design, the iPod music player was tightly integrated with iTunes, Apple's automated jukebox software, which Apple had also purchased and upgraded externally. Apple became an orchestra that synthesized a wide range of technologies without rejecting ideas from outside and was able to bring those technologies together through its own approach.

Second, Apple illustrated the importance of designing new products around the needs of the user rather than the requirements of the technology itself. Apple portrays the importance of the idea that new products should be designed around the needs of the user, not the needs of the technology. Many technology companies think that they are at the leading edge of technology and this makes their products sell, when in reality what they end up developing is just a gadget designed by one engineer for another and not accepted by the market. Apple has always been good at combining advanced technology with simple apps.

Third, Apple plans to unify the management of iPhone application sales through the App Store. Sending, charging, and publicizing are fully responsible by Apple, so developers can focus on developing great applications. From this, we can see that iPhone is not changing the sales model of one of its own products, but breaking through the fragmented situation of the previous mobile platform to establish a new unified platform, so that multiple parties in the ecosystem can benefit from the new model.

Chesabrouw said in an interview with 21st Century, "Open innovation is a world where talent is everywhere, and companies have to leverage the wisdom of outsiders if they want to innovate better than anyone else. the iPhone applet phenomenon is very much about open innovation. The Apple phone was seen for its unique touch screen when it came to the market, but it was the applets that made it successful. These applets don't require a high level of programming to develop, so they spread quickly. In its first year on the market, the Apple phone generated 200,000 applets. Relying on small programs, Apple phones quickly pulled away from other phones."

Through the above cases, we can see that open innovation is about giving full play to the role of the market in allocating resources, and maximizing the mobilization and stimulation of technological talent and social innovation vitality. Whether it is talent mobility, idea acquisition, or technology cooperation, or enterprise alliance, open innovation as a new development mode has become a new game rule for scientific research and innovation activities.