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Reinventing R&D in an Open Innovation Ecosystem


  • Helmut Traitler,

    1. Author Traitler is with Life2Years Inc., 1250 South Orange Grove Blvd, Pasadena, CA 91105, U.S.A. Author Watzke is with Nestec Ltd., Ave. Nestlé 55, CH-1800 Vevey, Switzerland. Author Saguy is with Robert H. Smith Faculty of Agriculture, Food and Environment, The Hebrew Univ. of Jerusalem, P. O. Box 12, Rehovot 76100, Israel. Direct inquiries to author Saguy (Email: ssaguy@agri.huji.ac.il).
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  • Heribert J. Watzke,

    1. Author Traitler is with Life2Years Inc., 1250 South Orange Grove Blvd, Pasadena, CA 91105, U.S.A. Author Watzke is with Nestec Ltd., Ave. Nestlé 55, CH-1800 Vevey, Switzerland. Author Saguy is with Robert H. Smith Faculty of Agriculture, Food and Environment, The Hebrew Univ. of Jerusalem, P. O. Box 12, Rehovot 76100, Israel. Direct inquiries to author Saguy (Email: ssaguy@agri.huji.ac.il).
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  • I. Sam Saguy

    1. Author Traitler is with Life2Years Inc., 1250 South Orange Grove Blvd, Pasadena, CA 91105, U.S.A. Author Watzke is with Nestec Ltd., Ave. Nestlé 55, CH-1800 Vevey, Switzerland. Author Saguy is with Robert H. Smith Faculty of Agriculture, Food and Environment, The Hebrew Univ. of Jerusalem, P. O. Box 12, Rehovot 76100, Israel. Direct inquiries to author Saguy (Email: ssaguy@agri.huji.ac.il).
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Abstract:  Today, the idea that random collisions and interactions offer solutions and business opportunities is no longer acceptable. Instead, partnerships and alignments, both downstream and upstream, are paramount for cross-fertilization and synergy. To survive, and thrive, in today's world of global innovation, alliances based on compatible differences must be sought. Innovation Partnerships and the Sharing-is-Winning model represent a paradigm shift toward accelerating co-development of sustainable innovation, with alignment of the entire value chain with consumer-centric innovations being one of its main pillars. It includes 3 levels of typical joint development: universities, research institutes, and centers; start-ups and individual inventors; a select number of key strategic suppliers. Reinventing R&D in an open innovation ecosystem and increasing success rates in an increasingly competitive marketplace require implementing significant steps—both perceived and tangible. Specific recommendations are provided for 10 major identified topics: leadership, strategy, the consumer, the value chain, internal experts and championship, metrics, IP, culture, academia, and passion. The Sharing-is-Winning model extends the scope of open innovation to sustainable and enhanced processes of co-innovation.


To keep pace with the growing technological complexity, bottom-line pressure, acceleration of new product development, changing consumer expectations, and an unstable business environment, innovation is one of the main resources to create, cope with and sustain a competitive advantage. Innovation is a necessity—probably the only way to survive. The new mantra “innovate or die” combined with open innovation (OI) could be the leitmotif for today's companies. OI has been defined as “a paradigm that assumes firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology” (Chesbrough 2003). More recently it has been redefined: “the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively” (Chesbrough and others 2006). OI is founded on the reality that, in a world of vastly distributed knowledge and accelerated rate of development, companies can no longer afford to rely on their own research, and consequently must utilize outside sources and buy or license processes, technology, inventions and solutions (Traitler 2009; Traitler and Saguy 2009). However, for some industrial companies, full adaptation of OI is not straightforward and for some, it remains a struggle.

Collaboration has been a key piston in the engine driving economic growth, and consequently, firms’ acquisition of external technologies is on the rise. Many firms have also recently started to actively commercialize technologies, for example, by means of out-licensing. While some pioneering firms have realized its enormous benefits, many are still experiencing major difficulties in managing the exploitation of external technology. Appropriate strategic technology-planning processes, including the extension of product technology to integrated roadmaps for OI processes and external technology exploitation, need to be established (Lichtenthaler 2008).

The goal set back in 2000 by Proctor & Gamble's (P&G) OI model of “Connect + Develop”—that 50% of innovation be acquired from outside the company (Lafley and Charan 2008)—has made significant inroads. For instance, P&G assessed 1500 external ideas, and 5% to 7% were acted upon (Lafley 2008). Other large food companies (for example, General Mills [Erickson 2008]; Kraft Foods [Kuhn 2008]; see also Sarkar and Costa 2008) have taken a similar approach. Due to the contributions of OI, a dramatic increase in the commercial success rate of P&G was also reported. For instance, the success rate on new products increased in 8 y to between 50% and 60% from 15% to 20% in 2000 (Lafley 2008). OI diversifies risks and shares both market and technological uncertainties of innovation (Keupp and Gassmann 2009). However, OI has become an overexploited buzzword. Almost every company has its own definition of OI. For example, some companies include customer-driven developments as “open” despite the fact that this kind of partnering with consumers has been practiced for decades. Where consumer innovation is actually needed and where it is really taking place is not entirely clear. The consumer-centric role of innovation in the whole value chain is not adequately emphasized, as discussed further on.

Despite OI's widespread applications, numerous small and medium-size enterprises (SMEs) and others operating in traditional sectors are struggling with its implementation due to their relatively low level of absorptive capacity (Spithoven and others 2010). Many SMEs perceive P&G's OI model as prohibitively expensive. Some of this cost is associated with the substantial upfront investment in human resources required for assessing, selecting, and negotiating with the external innovation contributors, and/or the paramount organizational changes required for implementation. The fact that SME are struggling with innovation calls for immediate considerations and specific actions. This topic is now under deliberations by various EU bodies as well as EFFoST, ISEKI, and IUFOST.

The main objective of this article is to highlight how Nestlé's Innovation Partnerships (INP) and Sharing-is-Winning model (SiW) (Traitler and Saguy 2009) have been utilized as a paradigm-shifting driving force for the reinvention of R&D.

Innovation Partnerships (INP) and Sharing-is-Winning Model (SiW)

Nestlé can claim 3 significant milestones: more than 140 y in business, exceptional successes, and most of its flourishing innovations coming from within. This has created an understandable natural internal resistance to accessing externally developed intellectual property (IP). However, these milestones are perhaps the most important reasons for change, to fight the complacency that stifles innovation. It took hard work and strong leadership by some very dedicated and committed individuals to change the company's strategy to embrace INP.

Nestlé is the largest food company in the world: it was ranked 36 of the 50 most innovative companies in 2009 (Bloomberg/BusinessWeek survey http://bwnt.businessweek.com/interactive_reports/innovative_companies_2010/?chan = magazine+channel_special+report). Nestlé's 2009 financial statement showed CHF 105.8 billion revenues, 14.6% EBIT, 3.9% organic growth, and 1.6% real internal growth. The first-quarter figures for 2010 show significant growth (CHF 26.3 billion sales, 6.5% organic growth, 4.8% real internal growth; http://www.nestle.com/MediaCenter/PressReleases/AllPressReleases/Q1results2010.htm?Tab=2010). Its R&D includes approximately 5000 people (3700 in R&D and 1300 in application groups). In 2009, Nestlé spent almost 4.4 times more than Kraft Foods on R&D (CHF 2.021 billion [1.91%] compared with $449 million [1.2%] based on overall revenues). Among the consumer companies, Nestlé's R&D spending ranked second after P&G (Jaruzelski and Dehoff 2009). However, no relationship was found between R&D spending and the primary measures of economic or corporate success, such as growth, enterprise profitability, and shareholder return (Jaruzelski and others 2005). It appears that excess resources may be counterproductive, impeding innovation.

Adapting the OI philosophy was not easy for Nestlé; nevertheless, the paradigm shift was recognized in 2006 as a strategic change, creating the INP group headed by the first author. INP allowed turning to the outside world for bigger, better, bolder, and faster innovation, and its execution and implementation were prompted by the recognition that universities, academia, small startups, biotech companies, and large industrial suppliers are important sources of co–development and partnerships. In particular, academia has been shown to play a very significant role in most breakthroughs and provides a natural and critical partner (Melese and others 2009).

The uniqueness and strength of Nestlé's INP is founded on alignment of the whole value chain to consumer-centric innovations. In general, Nestlé's INP includes 3 levels of joint development (Figure 1): universities, academia, research institutes, and medical centers; start-ups, and individual inventors; a select number of key strategic suppliers.

Figure 1–.

Typical partnerships and development stages and risk in SiW (adapted from Traitler and Saguy 2009).

This roadmap has also been implemented in the drug discovery industry (Talaga 2009), and fits the OI scheme of “outside-in” as the coupled process but not “inside-out.” A coupled process refers to co–creation with (mainly) complementary partners through alliances, cooperation, and joint ventures that are vital for success (Enkel and others 2009).

Successful INP relies on adapting a SiW. Generally, SiW is built on the fundamental principle that the solution seeker has to let the proposed solution provider know its precise needs and requirements, in the initial dialog steps. This indispensable prerequisite step is imperative to sharing needs/gaps/requirements openly and clearly with the proposed partner. However, a confidential and protective framework must be established prior to such sharing. Companies engaging in INPs must ensure that their joint co–development activities meet all of the rules and regulations surrounding antitrust, are carried out in a transparent way and can withstand the scrutiny of any trade commission in any country.

Following the dialog steps, SiW includes 4 essential stages (Figure 2): winning respect, build goodwill, establish trust, and create value along the value chain. Value creation is the ultimate goal of any partnership: without it, the entire concept holds no real merit for either innovation partner. Ultimately, SiW objective is alignment of the value chain to consumer-centric innovations.

Figure 2–.

SiW stages (adapted from Traitler and Saguy 2009).

The SiW extends the definition of OI, namely, a new avenue for collaboration in all areas of discovery and development with external partners who bring competence, commitment, and speed to the relationship, and also share the risk of innovation. The key to achieving SiW's major goals is to accelerate the co–development of a sustainable innovation, and remove the burden of resources and time pressure from the shoulders of a single partner. Sharing resources and postponing out-of-pocket investment until the project is launched has a significant impact on reducing upfront costs, the sharing of motivated, talented, and highly skilled human resources, and most importantly, a sense of cultural openness. Managing partnership projects is complicated and can quickly turn into a nightmare. However, typically these projects are highly visible and involve frequent top co–management meetings, making their chances of successful implementation very high. It is worth noting that the food processing industry, the potential of OI with suppliers and buyers to leverage innovation resources and capabilities was reported to be underutilized (Fortuin and Omta 2009).

SiW is a powerful and sustainable model because the risk of making financial commitments too early in the project(s) is kept low. Partnerships are created with upstream and downstream partners. Upstream partners represent early, mid, and mature stages of innovation. Typically, these partners come from universities, start-up companies, and inventors. They also include large industrial partners (for example, ingredient and packaging suppliers). Downstream partnerships occur with a select group of large customers (for example, retailers). By adapting the SiW, Nestlé was able to substantially extend the scope and speed of its innovation and renovation pipelines. Key partners who have been participating in this approach included Barry Callebaut, BASF, Cargill, Cognis, DSM, DuPont, Firmenich, Fonterra, Givaudan, IFF, Kerry, Mane, Symrise, and Tetra Pak, to name only a few. In less than 3 y, these INPs have already contributed to numerous new projects and more than $200 million in new business (Traitler and Saguy 2009).

Reinventing R&D in the OI Ecosystem

Linking innovation to a profit function that can be attributed to a tangible and/or perceived value has been previously highlighted. Every innovation program should ultimately furnish an increase in a profit function that can either be tangible or take another form, such as increased market share, expanding consumer base, perceived value or image, consumer experience, and so on (Watzke and Saguy 2001). The SiW should therefore be utilized as a platform offering co–innovation opportunities for all participants in the entire value chain. Embracing the SiW for reinventing R&D should be adopted, practiced, integrated, and implemented internally by the entire organization and externally with partners and consumers. Although this requirement may seem trivial, for medium and large companies, lack of alignment can become a significant impediment. The importance of this alignment for corporate and laboratory managers in promoting OI practices and enhancing laboratory R&D performance was recently confirmed (Asakawa and others 2010).

Integrating the whole innovation process, that is, from conception to final outcome, is a cardinal requirement. This requirement is not new and should resonate with almost all innovation practitioners. The innovation process should not resemble a boat drifting aimlessly with the wind, or moving forward with “locks” to provide the energy required to overcome “height gaps” (that is, overcoming 1 barrier at a time). It should be more like a military “beachhead” aimed at opening the way for the whole organization. Understanding, maintaining, and sustaining this innovation-process flow is vital (Watzke and Saguy 2001). The value-chain innovation roadmap is a useful framework for exploring the current state and future capability of co–innovation (Bonney and others 2007).

Some insights on how to reinvent R&D innovation are listed subsequently:

The consumer

For fast moving consumer goods (FMCG) companies such as the food industry, everything starts and ends with the consumer. In that respect, this industry is not unique but probably even more consumer focused than other industries. This is the reason why we begin our discussions with the consumer and his/her role. New ways of integrating consumer knowledge into the innovation at the front end must be explored (Gassmann and others 2006). The “consumer is the boss” (Lafley and Charan 2008) and drives R&D and success in the marketplace (Saguy and Moskowitz 1999). Expressions such as “paramount consumer role,”“total consumer compliance” (Watzke and Saguy 2001), and “the boss” exemplify the consumer's cardinal role in any new product's development and success. Three relevant streams of research that may provide a basis for user-oriented innovation in the food sector, namely, research on the formation of user preferences, research on innovation management, and research on interactive innovation were described (Grunert and others 2008). Most recent example is the special edition of Intl. Journal of Consumer Studies devoted to consumer, user, and carer involvement in health and social care. The need to embrace the consumer voice at all levels and sharing responsibility for the future decisions that will shape our 21st century health and social care provision was stated (Torrance 2010). A plethora of innovative methods for consumer research have been developed, including internet-based techniques (Moskowitz and others 2009) and Mega studies (Moskowitz and others 2005, 2006).

It is worth noting that our experience projected the extreme difficulty of cultural and geographic influences on consumers’ behavior and preferences. For instance, inconclusive data was obtained for specific global development and innovation situations, which were based on creating health and wellness driven products that are affordable and well-tasting in their specific and different consumer locations. Hence, a special caution is needed.

As the information technology revolution continues to advance at an ever-increasing rate, we are suffused with a bounty of new ideas and approaches. Noteworthy are 2 recent approaches for cross-pollination known as “wisdom of the crowds” (Surowiecki 2004) and “crowdsourcing” (Howe 2008). The former popularizes the notion that, under the right conditions, canvassing the aggregate opinions of many people can be more efficient than relying on the expertise of a few. Crowdsourcing is currently one of the most discussed keywords in the OI community. The major open question is how to find and leverage the enormous potential of the “collective brain” to broaden the scope of “open R&D” (Ebner and others 2009). Crowdsourcing is the act of taking a job traditionally performed by an employee and outsourcing it to a large interested group of people in the form of an open call. Both wisdom of the crowds and crowdsourcing represent applications of OI principles. This new paradigm has vast ramifications, especially for those companies that use a silo approach or even OI with very limited external interactions. The radical change is the concept that everyone in an organization and/or outside it is a potential source of ideas and ongoing developmental guidance. It provides the mechanism to unleash the creative abilities of millions of entrepreneurs around the globe, and provides the ability to overcome economic deficiencies and hurdles in one's own country. Its implementation requires a culture, processes, and support of openness, such that a much broader platform for innovation is built that allows the crowd to have a stake in the creative life of the company.

Although crowdsourcing can improve productivity while minimizing labor and R&D expenses, it provides only incremental ideas that come in a continuous stream and may become beneficial only if acted upon correctly. Again, it must be emphasized that the interaction with the source has to be continuous and positive to create goodwill. On the other hand, some argue that crowdsourcing could stifle innovation and should be considered carefully. Sustaining a culture of innovation over time is difficult and requires special attention, ample effort and time, collaboration, and processes that promote and encourage sharing. For a top-down company, the shift in culture may be prohibitive.


Once we gain consumers' familiarity and understanding, we need to have a clear idea as to how we can approach them and devise the right strategies to do so. This is especially important when it comes to identifying the targets (consumers and relevant products), potential choice of solutions, finding such solutions in the best possible environment, locating solution providers (internally and externally), and involving all players in the value chain as early as possible. Include procurement, marketing, sales, and the supply chain in addition to R&D is essential.

Strategy plays a crucial role in any innovation endeavor, especially when implementing OI. It requires much effort and involves a 3-pronged approach: top-down, bottom-up, and outside-in; obtaining buy-ins from all 3 sides is paramount. Personal experience has taught us that top-down support is essential, as opening up the developmental branch of any organization is in most instances a dramatic strategy-paradigm shift that requires top management's full endorsement. Obviously, it requires unique conditions (for example, a difficult environment that requires change; Lafley and Charan 2008) that justify such a move, the promise of new challenges ahead, or a new vision and leadership. If such “environmental impacts” do not exist, a creative approach is required to present the change in strategy carefully and convincingly. Arguments for such a shift can be manifold, and the head-on approach of reasoning that “change needs to happen while we can still afford it” has proven successful in many cases.

The second element is the bottom-up strategy, which can often be more difficult because it is more cumbersome to convince hundreds, if not thousands of people as compared to a rather small number of general managers in a company's executive board. This task also takes much longer. Typically, it requires real leg-work—numerous visits to R&D groups and discussions with all concerned—to obtain adequate bottom-up support. A few organizations prompt innovation by allowing their employees to spend 10% or more of their time on “blue-sky” projects. This is an appealing, but totally unworkable concept: because people tend to allocate their time based on priorities and job pressure, innovation tasks are typically postponed; moreover, not all people welcome open-ended projects and they become stressed when facing the need to innovate, while others thrive. Therefore, the bottom-up approach does not fit everywhere.

The third element is buy-in and support from the selected innovation partners. What is really crucial here is turning suppliers or vendors into strategic innovation partners, based on a set of selection criteria, showing them how important they are, and how mutually essential the 2-way collaboration is. It does not really matter which set of selection criteria or metrics one applies to this process, they simply have to be adapted for the task.

Some typical criteria for selecting the co-development partner are: an ongoing, well-established relationship; competence to fulfill respective needs; unique technologies and solutions; cultural fit and similar values, and R&D's proven capabilities and track record. A quote from a recent report can serve to emphasize this (Hagel and others 2009): “Deeper, yet strategic, restructuring of firm economics to generate maximum possible value from existing resources; development of new management practices to more effectively catalyze and participate in growing knowledge flows; and significant innovation in institutional arrangements to drive scalable participation in knowledge flows and reap the increasing returns to performance improvement.”

Management's role

Value creation is the ultimate goal of any partnership. To drive value creation, organizations should apply a disciplined approach to the innovation process. Management role is clearly crucial. First, without management approval or at least “no counterproductive intervention” (that is, “let us just do it”), nothing works (for example, OI, SiW, other development areas). Second, management commitment is vital for integrating the INP approach, as it demands “opening of the innovation process” nourishing and embracing the partner(s) participating, sustain and managing its progress. It is heavily relying on the support of senior management throughout the process.

Project management is vital to continuing success. This includes, among others, clear briefs and a good understanding of the goals and expectations. It is clear that large corporations tend to be rather cautious, if not slow, when it comes to stepwise changes in adopting different approaches, be it in development, marketing, manufacturing or supply chain and sales. World-class project management in new product development is also paramount. It is vital, up front, to define and specify crystal-clear goals, resources, timelines, and milestones, as well as assign IP and value-sharing solutions. The management's role is also to provide the necessary support, stimulus, and encouragement to promote and sustain OI efforts.

Management faces unsolved problems of changing environment, skills and expectations, and, consequently, needs to embrace change, even if this change sometimes lies outside its boundaries. These modifications do not come easily and require considerable adaptation. However, management's role is to lead and in this, innovation plays a very important role, as clearly projected by the citation (attributed to Steve Jobs): “Innovation distinguishes between a leader and a follower.”


Management not only wants metrics, they have a right to implement them as they provide a solid approach to quantify progress. However, one of the major obstacles in implementing OI is a lack of appropriate metrics. Indeed, many companies have metrics that differ widely in their objectives, quantification, and outcomes. This makes quantitative measurements cumbersome and no general methodology or criteria are known. It is quite astonishing that this field has remained underdeveloped and that insufficient efforts have focused on how organizations should measure their “innovativeness.” Indeed, innovation is hard to measure, with norms being nearly impossible to determine. Moreover, it is sometimes difficult to determine the actual value of the innovation outcome. Key performance indicators (KPIs) such as the turnover of new products, the number of accepted ideas, or the number of patents, offer only an indication, which, in many cases, correlates poorly with the outcome. A simple but very powerful metrics is how much additional business on an annualized basis is generated through SiW. The additional business is defined as revenues due to new products in the marketplace that neither includes more of the same nor price increase.

New metrics may help a firm focus on external sources of innovation to enhance its business model, and enable the firm to monitor its innovation progress as well as provide quantifiable criteria for improving performance and compensation (O’Connor and others 2008; Germeraad 2010). This topic remains wide open and calls for significant input from both academia and the private sector.

Partnerships, alliances, and IP

External technology partnerships allow OI to accomplish even more (Chesbrough and Schwartz 2007), suggesting why the business climate is focused on collaboration and reciprocation. To thrive, companies must seek alliances based on compatible differences. Like “innovate or die,”“partner or perish” is the new mantra. Partnerships are created to solve problems, fill gaps, or find answers more effectively and rapidly (for example, time to market). Effectiveness and speed are the operative and overriding principles of any innovation partnership.

In the past, most companies were driven by owning all IP, which very often led to endless discussions with no real satisfactory solutions for either party. This approach has changed to an initial understanding and clear definition of the partners’ needs is crucial. The partner who initiates the relationship must know which specific competencies and innovative solutions are being offered and how they could promote innovation. For instance, Nestlé, for its upstream partnerships only, has compiled its future corporate and individual business units’ needs/requirements, and shares this information with its innovation partners. Before this vital and confidential information can be shared, however, legal issues need to be considered. Establishing the legal framework in which to conduct the relationship is paramount. Initially, Nestlé used existing agreements that outlined the terms under which strategic and confidential information could be shared. As progress on the path of shared innovation was made, some of the secrecy or nondisclosure agreements were found to be inadequate. Proceeding to the second stage of SiW (that is, goodwill), the partners need to be able to discuss ideas freely and openly. However, sharing was becoming tricky and far more complicated, as some new ideas were not necessarily covered by the existing agreements.

The IP question is the “Gordian knot” that should be resolved. To circumvent the obstacle, Nestlé established master joint-development agreements (MJDAs). Typically, the MJDA outlines the scope of the expected collaboration in general terms, and in a second more detailed part, delineates the project, expectations, resources, timelines, IP, and all other elements necessary for best practices. The MJDA is a crucial element in breaking the ice and speeding up the process. Establishment of a MJDA allows partners to enter smoothly into the next phase, defined as “discovering the opportunities.”

To highlight the aforementioned points, let us consider a SiW example with a partner (for example, a flavor house). A very defined MJDA is worked out upfront covering the collaboration, required resources, timing, milestones, expected results, and geographic areas (all, by the way, elements of simple, good project management principles). These points are jointly defined and it is agreed that the partner owns the IP of the newly discovered (within the collaborative project) set of molecules that may generate a new, unique flavor variant in a product, whilst the company owns the “smart” application(s) of this new, unique flavor in the defined and agreed upon area of product application, in the defined geographic areas and for the agreed period of time. The latter is normally based on expected and real product volumes, depending on the time period (for example, short or longer time). The exclusivity period typically commences at the date of product launch, which uses the jointly created innovation but should also involve a clause how much time is allowed between jointly agreed upon termination of the project and the launch date (for example, less than 18 mo). This is a protective measure especially for the external partner and really shows yet another important aspect of SiW.

The issue of IP has and will continue to garner much attention: it requires additional consideration as it plays a cardinal role in any innovation process, more so for OI. It should be emphasized that there is probably no innovation without resolving the IP issues. However, the question of whether IP issues cripple OI remains. This question warrants further consideration because across many industries, most patents remain noncommercialized. For instance, Siemens and P&G recently reported that they only used 10% of their patent portfolio (Alexy and others 2009). This highlights a real opportunity for creating value from sharing of IP. Proactive IP management seeks to identify opportunities for sharing IP to create real value (Hunter and Stephens 2010), as well as new IP business models.


The idea of random collisions and interactions offering solutions and business opportunities is no longer viable. Partnerships and alignments, both downstream and upstream, are paramount for cross-fertilization and synergy. To survive—and thrive—in today's world of global innovation, seeking alliances based on compatible differences is a must. Like “innovate or die,”“partner or perish” has become the new mantra. Effectiveness and speed are the operative and overriding principles of any innovation partnership. Blocking SiW with the typical “not invented here” syndrome has ceased to be a viable option. Sustainable co–development and innovation becomes feasible with a change in mindset from “attempting to do everything within” to “seeking out the most appropriate partners for success,” an integral part of the SiW.

To significantly reinvent R&D in an OI ecosystem and increase success rates in an increasingly competitive marketplace, these recommendations that are based on development experiences gained during over 3 y, should be considered:

  • 1Leadership—Implementation of the SiW does not come easily: it requires a paradigm shift that must be embraced by management and the organization. It demands a clear vision, cultural change, and tools to support, promote, and sustain co–innovation. It sets quantifiable and crystal-clear goals that galvanize action and the development of tools that will ease the burden on people attempting to promote innovation and change. Embracing risk-taking and allowing failure are also a must.
  • 2Strategy—The roadmap for SiW utilization emphasizes the importance of external co-development and partnerships as an essential part of the strategy. It should include all of the value-chain participants. Promoting top-down, bottom-up, and outside-in strategies, and buy-ins, as well as supporting both structured and disruptive entrepreneurships are required.
  • 3The consumer—A consumer-centric focus should be implemented into which both the innovation process and the business model are integrated. Personalization and sharing (networks, crowdsourcing) should be considered.
  • 4The value chain—The OI lifeline relies on the most important element being the value chain and consumer-centric innovations. Innovations have to be made at all stages (for example, product development, production, from raw material to recycling), and for foods, they must even consider physical effects (for example, nutrition, health, and wellness). Once the alignment is achieved, other elements (for example, sustainability, sharing, social responsibility) should be integrated.
  • 5Internal experts and championships—Market successes are due mainly to the people that drive them, and this is especially true for successful SiW implementation. The unique “yellow brick road” that will attract, support, nourish, sustain, educate, and reward needs to be found. Creating internal experts and networks (inside/outside) is paramount.
  • 6Metrics—Appropriate metrics for quantifying “innovativeness,” to overcome impediments, are vital. These metrics (qualitative, quantitative, baseline) should be linked to KPIs, reward mechanisms, and benchmarking.
  • 7IP—The SiW principle that the competency-bringer owns the solution(s) and the need-requester owns the smart application(s) in specified areas provides an initial platform for overcoming possible hurdles. To avoid many stagnant situations (for example, unproductive discussions, relationship-damaging conflicts), this complex topic requires special attention and new business models for co-sharing.
  • 8Culture—Openness is blocked by formidable barriers (visible and perceived). The persistence of hierarchical thinking, particularly a reliance on experts rather than the expertise of knowledgeable employees at all levels, undermines open collaborative efforts. A real and visible effort is needed to align all stakeholders to support innovation activities. A significant shift in the culture toward embracing change and risk-taking is needed. Linking human resource factors to innovation rewards and compensation is paramount.
  • 9Academia—Although Academia is only one partner, it is a very important contributor for numerous significant innovations processes and therefore deserves to be highlighted specifically. Academia and industry need a mutual vision and thrust, which includes a paradigm shift toward reforming the “old” systems of teaching and learning, and increasing students’ involvement, industry's role (for example, resources, short/long-term commitment), and social responsibility. A sustainable direct relationship based on the principles of SiW is needed. Encouraging academic researchers to supervise joint theses carried out partially/fully within the industry is recommended, as is becoming full members of industrial teams.

Finally, commercial realization of SiW is the core of the model. Starting from the selection of partners, the establishment of competence matching, decision for a co–development of an innovation and matching route to markets, SiW is the pertinent element permitting INP. It is opposite to the search-and-buy-in strategy of the usual IO models. Innovation partnership starts already with the co–innovation in mind. Reinventing R&D requires passionate and committed leaders, people, and organizations. The SiW offers an opportunity to co–innovate the future.