Best Practices for a Full Value Chain Approach

Open Innovati on

Matthew C. Heim, Ph.D.President, NineSigma Inc.

Overview

1. NineSigma Background

2. An Introduction to Open Innovation

3. Open Innovation for the Entire Value Chain

4. Key Takeaways

N I N E S I G M A I S T H E L E A D E R I N O P E N I N N O V A T I O N S E R V I C E S

NineSigma works with Clients. . . to discover innovative ideas, technologies, products

and services from outside their organizations

. . . to connect with the very best innovators and solution providers from around the world

. . . to quickly and cost-effectively solve their business needs

. . . and to transform their innovation processes

NineSigma profile: Offices in USA, Europe and Japan Over 1,200 Open Innovation projects completed >2 million solution providers contacted 14,000+ proposals received from 73 countries South Africa regional partnership with RIIS

Some of our many global clients

Our clients tell us we help Accelerate the innovation cycle Provide greater access to new ideas, innovation,

knowledge Help hedge risk Provide an expandable, low-cost network of

innovation partners Expand access to different skill sets and

competencies

E N

G A

G E

E N A B L E S t r a t e g i cTa c ti c a l

I n t e r n a l

E x t e r n a l

T H E O P E N I N N O V A T I O N U N I V E R S E

Highly

Engaged

Optimized

Innovation

Highly

Enabled

Closed

Innovation

Why Open Innovation?

ValueSpeed

Capacity

Time

Value created by internal innovation with limited external network

Value created through combined approach of internal innovation and externally tapping the global innovation community

The best connections are often the unobvious ones

The Evolution of OI Capacity Over Time

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S TA G E 1

Launch

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STAGE 1: LAUNCH Project focused Experimentation R&D Centric Learning to be Open New roles New processes Change management

STAGE 2: CONSOLIDATE Emerging best practices Defined workflow process Emerging role of the OI champion Emerging organizational structure Areas addressed outside R&D Evolving reward systems Emerging metrics structure Begin to link OI and strategy

The Evolution of OI Capacity Over Time

Stage 1:Launch

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S TA G E 2

Consolidate

S TA G E 1

Launch

The Evolution of OI Capacity Over Time

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S TA G E 2

Consolidate

S TA G E 3

Embed

S TA G E 1

Launch

STAGE 3: EMBED Open Innovation strategy

clearly articulated inside and outside the company

Well defined, visible OI organization

OI champion with full value chain credibility

Reward systems standardized Knowledge captured and

managed to drive competitive advantage

Standard metrics and reporting

Full Value Chain approach

Open Innovation: A Full Value Chain Approach

Page 10

Open Innovation: Upstream Research

Page 11

Ideation Support:Identify key technologies available, or in development, That will present joint development opportunities or risks

Open Innovation: Upstream Research

Page 12

Project Types:• Competitive technology intelligence assessments

• Emerging disruptive technology threats• Strategic technology intelligence landscapes

• Identify potential partners• Identify potential IP acquisitions

Open Innovation: Design & Development

Page 13

R&D Support:Identify non-core technologies and talents that can help accelerate the new product development lifecycle

Open Innovation: Design & Development

Page 14

Project Types:• Specific technology searches• Specific talent searches• Crowdsourcing (conceptual problem resolution)

Open Innovation: Manufacturing

Page 15

Manufacturing Support:Find new technologies, processes, etc. to create a more reliable, leaner and cleaner manufacturing process

Open Innovation: Manufacturing

Page 16

Project Types:• Product-specific manufacturing technologies• Lean manufacturing technologies• Green manufacturing technologies• Quality-related (inspection) technologies• Safety-related technologies

Open Innovation: Process Improvement

Page 17

Process Support:Find experts and methods to help enhance existing processes, or to develop new processes outside your core competency

Open Innovation: Process Improvement

Page 18

Project Types:• Process expert sourcing• Specialized technology processes

• Chemical processing• Bio-Technology processing• Quality/Regulatory

• Specialized business process

Open Innovation: New Markets/Applications

Page 19

New Channel Support:Identify new markets for existing competencies and intellectual property via Open Innovation Intelligence

Open Innovation: New Markets/Applications

Page 20

Project Types:• Find new markets for existing products (intelligence)• New applications for existing markets

• e.g. Augmented Reality in greeting cards• “Greening” of existing products

• e.g. bio-acrylics vs. plastics

Open Innovation: Ready-Products

Page 21

New & Existing Market Support:Identify existing products and services that can be introduced to an existing portfolio to strengthen current capabilities and improve market penetration

Open Innovation: Ready-Products

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Project Types:• Ready-products needing funding• Near ready-products needing R&D support• Ready-products needing channel or supply chain support• Bundling opportunities for existing products

Key Takeaways:

A Full Value Chain approach requires an empowered and credible OI function

Develop a balanced portfolio of “Engage” and “Enable” tools and capabilities

Whole-Systems Thinking leads to the highest return on your open innovation investment

Commit, align & build momentum behind your OI effort

Matthew Heim, Ph.D.President, NineSigma Inc.

www.ninesigma.com

Thank You For Your Attention!