Open
Innovation
Case studies from Denmark
Working paper
Compiled by Monday Morning Ltd. for
Danish Ministry of Science, Technology and Innovation
As a contribution to the
OECD Project on Globalisation and Open Innovation
Mondaymorning
Table of contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
I Innovation Cup data on Open Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
II Five case studies from Denmark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Gabriel Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Danisco Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Quilts of Denmark Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Exiqon Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
IBM Denmark Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
III Perspectives on Open Innovation in Denmark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Open Innovation – Case studies from Denmark
3
4
Mondaymorning
Introduction
Open Innovation - Case Studies from Denmark represents
Denmark’s case study contribution to the OECD project
on Globalisation and Open Innovation. The objective of
the paper is to extract some of the key lessons learned
from five Danish companies with extensive experience in
open innovation. National case studies like the present
have been coordinated by OECD member states to complement desk research and literature studies aiming to
identify how globalisation changes the innovation strategies of companies.
The five cases have been selected as examples of best practise in innovation management. They have been selected
to cover a wide variety of experience and size. The smallest company in the study has 70 staff members, the largest
7,400 staff members in Denmark. Four out of five cases
are companies which have participated and done well in
the national competition Innovation Cup in 2007. Three
of the four companies won special prizes in various categories.
Innovation Cup was launched as a collaborative project by
the Innovation Council of Denmark in 2005 in order to
highlight the importance of innovation management at
national and company level - and to learn from the experience of the best companies. Innovation Cup was carried
out again in 2007. The fifth case study, IBM Denmark,
represents the case of outstanding open innovation activities in a multinational company. Hence, all five cases have
been selected for their excellent work as examples of best
practise in innovation management. The report falls into
three main parts:
• DATA: A presentation of quantitative Innovation Cup
The methodology used has involved a combination of
desk study of quantitative data from the Innovation Cup
surveys and individual interviews with executives and
innovation practitioners from the five companies
involved. The interview guide has been developed on the
basis of the innovation management model Seven Circles
of Innovation, the Innovation Cup questionnaire and
OECD documents. The overall approach of the study as
well as innovation terminology like Not-Invented-Here
Syndrome and Not-Sold-Here Virus are inspired by the
theoretical work of Henry Chesbrough.
Monday Morning Ltd. has carried out the case studies on
behalf of the Danish Ministry of Science, Technology and
Innovation. The Danish Council for Technology and
Innovation
has
prepared
the
action
plan
“InnovationDenmark 2007-2010” as a contribution to the
renewal of Denmark’s innovation policy. The most important goals of the action plan is to ensure that Danish enterprises become more and continuously innovative and to
promote knowledge dissemination and interaction
between research and industry. The Council attaches great
importance to international cooperation. The Danish contribution to the OECD project on globalisation and Open
Innovation is an integral part of the new action plan for
more innovation.
Given the scope of the study, this paper can only provide a
humble contribution to our emerging understanding of
the intricate world of open innovation. However, it is the
authors’ hope that the combination of Innovation Cup
data and the qualitative case interviews will inspire and
add colour to the joint learning process in a field full of
promise.
data on open innovation
• CASES: Five qualitative case studies of advantages and
Copenhagen, June 2007
challenges in working with open innovation as experienced by five Danish companies
• PERSPECTIVES: A brief discussion of some of the perspectives arising from the case studies
Open Innovation – Case studies from Denmark
5
Mondaymorning
Summary
This paper combines quantitative data from a Danish
innovation management competition entitled Innovation
Cup with five case studies of best practise companies with
advanced experience in the field of open innovation. The
objective of the study is to extract some of the key lessons
learned and provide case examples of perceived advantages and challenges when it comes to the overall
approach to open innovation, partner identification and
future prospects. Overall, the findings can be summarised
in three main points: a) Positive attitudes at company
level, b) Rhetoric ahead of practise and c) Small and young
companies as front runners in a fast evolving field
As part of Innovation Cup, more than 1,300 employees
from more than 160 private and public companies have
filled out a comprehensive questionnaire making up the
complete body of Innovation Cup data. The quantitative
data shows that rhetoric is ahead of practise when it
comes to innovation management and open innovation.
The vast majority of respondents knows who their customers are and how their input contributes to value creation for the user. However, specific methodology concerning the users and the more advanced methods for
user-driven innovation seem to be only moderately prevalent. There is great versatility in the methods applied and
private companies are at a more advanced stage than public sector participants.
The quantitative data is supplemented by qualitative
insights into the relatively advanced open innovation
experience by five Danish companies. This part of the
report is based on interviews with executives and innovation practitioners from the following best practise companies:
• GABRIEL LTD.
Networking and open innovation is key to Gabriel’s
business strategy - Concern over IPR
• DANISCO LTD.
Varied partnerships have been established over some
time - Careful selection of partners
Open Innovation – Case studies from Denmark
• QUILTS OF DENMARK LTD.
Increasingly involved in open innovation involving
NASA - Importance of a fair process
• IBM DENMARK LTD.
Long history of open innovation with wide variety of
partners - not just front-end innovation
• EXIQON LTD.
Research background of staff enhances extensive - if
selective - openness in innovation
The companies studied have different starting points for
their work with open innovation and differ significantly in
size and age which stand out as the two main defining
parameters. Smaller and younger companies tend not to
question the use of external collaboration in their innovation practise. Larger and older companies, by contrast,
tend to look inside their own company before they look
out – and to be more systematic when they do look out.
Based on the present case study, proactive networking
stands out as a characterising feature of best practise in
the field. With the exception of one company, the case
studies indicate a stronger emphasis on external involvement in the front end of the innovation process rather
than in the development and implementation phases. The
case studies provide a qualitative insight into the innovation process at company level and show interesting perspectives on open innovation in a Danish context. It is difficult to draw general conclusions on open innovation on
the basis of five case studies. The paper suggests learning
from mistakes and open innovation after the front end of
the innovation process as possible areas of further investigation.
6
Mondaymorning
I Innovation Cup Data
on Open Innovation
Rhetoric seems to be ahead of practise. This is a key conclusion from Innovation Cup. Participating companies in
2006 as well as 2007 have an obvious interest in innovation management but only 37 per cent indicate that they
have a clear innovation strategy. Amongst the ten per cent
best performing participants in Innovation Cup the share
of respondents with a clear innovation strategy totals 64
per cent. By comparison, 70 per cent have a formalised
organisational strategy. Only 21 per cent confirm that
their innovation strategy has been communicated clearly
in the company and to external partners.
On the basis of quantitative data from a web-based questionnaire combined with qualitative data from assessment
visits to the top performing companies Innovation Cup
identifies and celebrates the most innovative companies
in Denmark. The questionnaire is based on the management model Seven Circles of Innovation described in
more detail in Annex B of this report. Innovation Cup
Data covers innovation management in the broad sense
but this section of the report presents quantitative data
regarding open innovation from Innovation Cup.
Innovation Cup 2007 data is focused on user-driven innovation – only one of a number of possible variants of open
innovation – but also includes information on the prevalence of other types of open innovation.
Innovation Cup was launched in 2005 by Innovation
Council of Denmark in a collaborative effort with Monday
Morning Ltd. as secretariat and coordinator. Innovation
Cup was carried out for the second time in 2007 and provides an extensive set of data in the field of innovation
management where rhetoric tends to be more advanced
than factual knowledge. More than 1,300 employees from
more than 160 private and public companies have filled
out a comprehensive questionnaire. General findings of
Innovation Cup include apparent linkages between innovation management success and a learning culture, efficient systems for knowledge sharing and strong market
orientation and are described in the 2007 Innovation Cup
report. The following section details findings specifically
related to open and/or user-driven innovation.
Data on Open Innovation
User-driven innovation was chosen as the Topic of the
Year for Innovation Cup 2007 due to notable interest
amongst last year’s participants. Consequently, approximately 50 questions were developed for the questionnaire
MM | Strategy and innovation strategy
I agree to a high degree or always (per cent)
80
All participants
70
Private companies
60
Public sector organisations
50
40
30
20
10
0
The company has an
explicit corporate strategy
that is written down
Corporate strategy is widely
known and understood
by all employees
The company has
a clear innovation
strategy
The company clearly communicates
the innovation strategy
both internally and externally
Open Innovation – Case studies from Denmark
7
Mondaymorning
on advantages and challenges of working with user-driven approaches in the various stages of the innovation
process. In addition to putting innovation management
on top of the national agenda by celebrating the most
innovative companies as winners, Innovation Cup represents a learning process for all participants. Revision of
the questionnaire from the first to the second year is a
reflection of the work-in-progress character of the effort.
The EU Commission has welcomed Innovation Cup as the
first European attempt to systematically measure the ability to create innovation at company level. In other words,
Innovation Cup represents pioneering work and the concept is constantly developed and improved.
MM | External partners in the innovation process
IDEA GENERATION
“We collaborate closely with the following external partners on problem solving in the following phases of innovation management”
I agree to a high degree or always (per cent)
All participants
70
Private companies
60
Public sector organisations
50
40
30
20
10
0
Present
customers
Potential
customers
Competitors
Suppliers
Retailers
ComplemenExternal
tary business production
partners
Publicly
funded
research
institutions
Others
(government
agencies,
civil society)
TESTING
“We collaborate closely with the following external partners on problem solving in the following phases of innovation management”
I agree to a high degree or always (per cent)
70
60
50
40
30
20
10
0
Present
customers
Potential
customers
Competitors
Suppliers
Retailers
ComplemenExternal
tary business production
partners
Publicly
funded
research
institutions
Others
(government
agencies,
civil society)
LAUNCH AND IMPLEMENTATION
“We collaborate closely with the following external partners on problem solving in the following phases of innovation management”
I agree to a high degree or always (per cent)
70
60
50
40
30
20
10
0
Present
customers
Potential
customers
Competitors
Suppliers
Open Innovation – Case studies from Denmark
Retailers
ComplemenExternal
tary business production
partners
Publicly
funded
research
institutions
Others
(government
agencies,
civil society)
8
Mondaymorning
The impression of rhetoric ahead of practise is confirmed
when looking at participating companies’ external cooperation. When asked ‘Are you interested in maintaining
long term relations with customers, suppliers, retailers
and other complementary partners, 96 per cent respond
positively. The share of positive responses is lower when
asked about specific activities. Innovation Cup data shows
that customers seem to be the preferred external partners
when it comes to solving important problems in the various phases of innovation management. Customers are
followed by publicly funded research institutions and suppliers as preferred partners. There is a clear trend of
increasing external collaboration as companies move
from idea generation and testing into launch and implementation. Even the modest extend of collaboration with
competitors increases slightly in launch and implementation as reflected in the table on the previous page.
The table below lists positive responses to a number of
possible approaches to the maintenance of long term relations with external partners. Again, the general statement
of encouragement to all staff members to remain open to
input from external sources scores remarkably high with
support for 81 per cent for respondents. By contrast,
financial incentives for staff involved in external collaboration are very modest and reported by only five per cent of
respondents.
Two-thirds of the respondents know who their customers
are and how their input contributes to value creation for
the user. Information on user satisfaction is circulated at
all levels in the organisation in 44 per cent of participating
companies.
When it comes to gathering knowledge of and co-operating with the users and the customers, the level is lower. 47
per cent of the participants of Innovation Cup systematically gather knowledge of current customers and 42 per
cent co-operate with them on solving important problem
areas.
The gathering of information of and the co-operation
with potential customers and users are with 33 per cent
and 28 per cent respectively lower in the participating
organisations.
The private companies are notably more committed to
gathering information and co-operating with customers
than the public sector participants.
What specifically do Danish companies and organisations
do in their attempt to create user-driven innovation? This
subject is the theme of Innovation Cup 2007 and it has
been asked which methods are actually applied.
The results show that the methodology concerning the
users and the more advanced methods for user-driven
innovation only recently have gained ground in the Danish
organisations. There is great versatility in the methods
applied. The results also show that private companies are
at a far more advanced stage than the public. In most
cases, twice as many of the participants from private com-
MM | External collaboration and network competencies
I agree to a high degree or always (per cent)
80
All participants
70
Private companies
60
Public sector organisations
50
40
30
20
10
0
All staff is
Staff members are
Management of
Staff responsible Financial incentives
encouraged to be
specifically
external contacts is
for external
are in place for
staff responsible open to inputs from
assigned to
part of job
collaboration has
for external
external sources
manage external
descriptions
sufficient resources
collaboration
collaboration
Participation in
external networks
is appreciated by
the company
Open Innovation – Case studies from Denmark
9
Mondaymorning
MM | Data gathering and problem solving
I agree to a high degree or always (per cent)
80
All participants
70
Private companies
Public sector organisations
60
50
40
30
20
10
0
We gather systematic
data on
present customers
We gather systematic
data on
potential customers
panies report that they apply the methods than is the case
with the public participants. The low share among public
sector participants is striking considering what a major
factor user-driven innovation is in the innovation strategies of the public sector participants.
The questions from this year’s theme have not affected the
total score. However, the study clearly shows that the winners of Innovation Cup are more frequent users of the
methods for user-driven innovation than the average.
Eight of the ten organisations, who score the highest concerning user-driven innovation, are on the top five lists
among either the large companies, the small companies
or the public sector participants.
We collaborate closely
on important problems
with present customers
We collaborate closely
on important problems
with potential customers
At the same time, a larger part of the top ten per cent
group confirm that the methods for user-driven innovation are prevalent in their organisation than is the case for
the average. This applies for all of the questions.
The participating organisations all consider that they are
well ahead when it comes to users’ and customers’ access
to sharing new ideas. Almost 70 per cent of the participants think that the customers to a great extent or always
have this opportunity. But only three of ten private companies and one of ten public sector participants make systematic evaluations when the ideas have been received.
Also few of the companies make an effort to promote the
ideas from the users and customers. In the study, there is
MM | Methods to extract ideas from customers
I agree to a high degree or always (per cent)
80
All participants
Private companies
Public sector organisations
70
60
50
40
30
20
10
0
Our customers have
easy access to
sharing their ideas
with us
We have a procedure
to ensure systematic
evaluation of
customer ideas
Open Innovation – Case studies from Denmark
We have campaigns
at regular intervals
to extract ides
from customers
We motivate customers
to share ideas by
offering the opportunity
to develop their ideas
We motivate our
customers to share
ideas by offering
them financial
incentives for good ideas
10
Mondaymorning
asked about a total of six different ways to motivate customers to contribute ideas. None of the methods are especially prevalent. Generally speaking, no one awards their
customers financially for contributing good ideas, almost
one-fourth have campaign ideas and slightly more offer
their customers the opportunity to co-operate further on
the ideas, as the tables shows. The general pattern that the
most advanced methods are not especially prevalent is
made clear once again when asked about methods such as
lead user involvement and user communities. Only a small
number of the participants use these methods. As shown
in the table on the previous page, private companies are
generally further ahead than the public sector participants
on this specific point.
19 per cent of the respondents from the private companies
point out that their wish for exclusivity on intellectual
rights to a great extent or always is an obstacle for userdriven innovation. A part of the explanation for the experience of few obstacles can simply be that the organisations yet lack extensive experience with the more
advanced methods for user-driven innovation.
Scanning of customer complaints for innovations is more
prevalent. About 50 per cent regularly check their customer complaints for ideas for new innovation projects.
Customer workshops such as focus groups are prevalent
among almost 40 per cent of the participants, while a
method such as for instance user observations is still very
rare.
Obstacles for involving the users
In connection with the topic of the year, participants have
been asked if the organisations experience obstacles for
user-driven innovation and customer involvement. The
answers show that only very few respondents experience
notable obstacles in that area. Of fifteen questions it is the
area intellectual property rights which is estimated to be
the biggest challenge in user-driven innovation. Still, only
MM | Methods of user driven innovation
I agree to a high degree or always (per cent)
60
All participants
Private companies
50
Public sector organisations
40
30
20
10
0
We scan our customers
to identify lead users
We support user
communities by
providing information
or financial incentives
We scan customer
complaints
We conduct customer
work shops and
focus groups
We observe users
Open Innovation – Case studies from Denmark
11
Mondaymorning
II Five case studies from Denmark
This chapter presents case studies of five Danish companies and their approach to open innovation. Four companies - Gabriel Ltd., Danisco Ltd., Quilts of Denmark Ltd.
and Exiqon Ltd. - have been selected for this case study
because the Innovation Cup competition has identified
them amongst the most innovative companies in
Denmark in 2007. Quantitative Innovation Cup analysis
as well as assessment visits to the companies indicate that
the companies have an interesting approach to open innovation with early mover experience meriting further studies. IBM Denmark did not participate in Innovation Cup
2007 but has been selected for this case study to get an
additional Danish angle on IBM’s well-published work
with open innovation and to look at their far-sighted use
of the internet in particular.
Open Innovation – Case studies from Denmark
The case studies are based on desk studies and interviews
with a key person in each company selected on the basis of
his or her experience with open innovation. Appendix A
provides a list of interviewees.
Each case study is introduced by a summary of key findings. The findings of the individual case studies are structured as follows: 1. Short presentation of the company. 2.
Overall approaches to innovation. 3. Identification of
partners. 4. Advantages of open innovation. 5. Challenges
of open innovation. 6. Open innovation in the future. A
specific examples of innovation in practise is included in
each case description in a box.
12
Gabriel Ltd.
• Networking and open innovation gives Gabriel a better
gearing of their investments
• Introduction of balanced scorecard has made advantages of open innovation visible
• Car manufacturing technologies have been adopted by
Gabriel and partners through open innovation
• Open innovation has turned former competitors into
partners
• Some concerns over intellectual property rights, especially with regards to China
Short presentation of company
Gabriel situated in Aalborg Denmark was founded in 1851
and is one of Europe’s leading suppliers of furniture textiles. The company has 122 employees and a turnover in
2006 of 32 million euro. In 2007 Gabriel was identified as
the most innovative company in Denmark by Innovation
Cup.
Overall approach to open innovation
Gabriel sees open innovation as part of the company’s
strategic development through networks. It is a natural
thing for Gabriel to practise open innovation, as they are
not specialists in everything. Through open innovation
they get to co-operate with the best in their business, and
they get another gearing in their investments, as they cannot implement the same projects alone in the same way as
in a network. Through open innovation Gabriel takes
advantage of the expertise that their partners have built
through many years, which they offer Gabriel when they
build a network around a given product that both parties
find interesting. On the incremental part Gabriel has 35
open innovation projects at the moment, and on the radical innovation side they have between three and five.
Gabriel has been working with open innovation for many
years. But they feel that things fell into place, when they
introduced balanced scorecard as a management tool in
the company. The introduction of balanced scorecard
helped Gabriel to execute its strategies, and the company
got a clear picture of what their efforts gave in return. The
introduction of balanced scorecard forced Gabriel to
become considerably more process-oriented. Now
Gabriel is a fully process-oriented company and it is clear
to Gabriel that the company must concentrate on four
value-creating core processes. In that way, the introduction of balanced scorecard has had an effect on the work
with open innovation, as it is more obvious for Gabriel
where innovation and value is created. Services from sup-
Mondaymorning
port processes are traded internally and externally to market price to get the true value and quality of their services
compared with what they can buy it for outside the company.
It is second nature for Gabriel to participate in diverse networks. All areas of the company participate in networks,
just as it is a natural thing that groups are invited to the
company. This contact with external partners generates a
lot of ideas to Gabriel and vice-versa. But as it is hard to
say when exactly an idea arises, as this often happens in
interaction with their partners in organised idea-generating processes, it is hard to say if Gabriel gives away or
receives more ideas.
Gabriel acquires new external technologies when a network partner is interested in making use of a technology.
In that way they gear their own development costs by
being open and achieve a benefit.
Globalisation has meant a deliberate strategic focus on
innovation for Gabriel. Gabriel has gone from being a traditional production company to being a virtual production
company where logistics is a core process instead. Earlier
Gabriel delivered to Western Europe, now a large part
goes to low-price countries and therefore they need to be
in low-price countries with their production. Gabriel is
now situated in China (2003), but they are very careful
about being open because of IPR concerns and they do not
develop in China yet.
Identification of partners
When Gabriel engages in co-operation with others on
innovation activities, they want to make sure that they and
their partners have the right competences in view of what
is being developed, and they also want to make sure that
they have a mutual clear understanding of what is meant
by open innovation. They do not just open their door for
everything and everybody, and when they engage in open
innovation, they always sign a confidentiality agreement
with their partners to be able to work freely.
Gabriel has always had quite an open approach to the outside world which also includes their competitors. They
have been evaluating their core concepts from a strategic
point of view for a number of years. They have asked the
competitors what their core processes and strengths are
and in some cases maybe drawn the value chain. By asking
themselves what really justifies them, they have often
found out that they did not have to be competitors, but
they could actually improve products together.
Open Innovation – Case studies from Denmark
13
Mondaymorning
Gabriel has mainly been working on incremental innovation and Gabriel is used to developing together with their
customers around their wishes along with other partners.
For many years they have been developing their products
up against the market with approximately 60 large international furniture producers who are their strategic costumers, but they also develop with substitute producers.
Case: Introducing technologies from the
car industry to the furniture industry
Throughout the years Gabriel has often been inspired by
the car business. For some reason the car business
has been more specific about what is expected of a
seat compared with the other areas that Gabriel is involved in. Gabriel has only been involved in the car business with some special seats. But car seats have for
many years been more innovative-looking than furniture
seats and even flight seats. Gabriel has also transferred production processes from the car sector. In a close
corporation with a furniture company called HAY, they
have introduced a fabric electro-welding technology to
the furniture industry that for example is used by Fiat.
The special method in which the fabric and the filler are
laminated rather than sewn together provides a major
reduction in production costs.
Gabriel also engages in open innovation with an Italian
partner who delivers to the car industry and who is also
a competitor for Gabriel in some niche areas. The competition does not play a role as they can lift much more
value together than they miss by competing against
each other. This collaboration develops constantly.
Gabriel finds that the Italians have a distinct sense for
open innovation. Gabriel has another Italian collaborator that has also been a distinct competitor, but now
Gabriel has taken over their sales functions and at the
same time Gabriel’s development people run in and out
of their door, because the Italians are so keen on open
innovation.
So far, it has primarily been the customers who Gabriel
has been developing their products with, but they also
develop with substitute producers who can also think of
a solution in the development of a new work chair. The
partner could be someone who has at special competency in furniture foam and who can easily satisfy the
requirements by law that goes along with Gabriel’s furniture textiles and the manufacturer’s wooden or steel
constructions. In the case of the foam they found a type
of foam that was usually not used in traditional furniture business. Gabriel has often undertaken the task of
finding a producer somewhere in the world, and they
have often ended up with someone who does not have
a metier in the furniture business.
Open Innovation – Case studies from Denmark
Gabriel has often undertaken the task of finding a producer somewhere in the world, and they have often ended
up with someone who does not have a metier in the furniture business.
In the area of radical innovation, which is a relatively new
approach for Gabriel, they often work with Danish universities on organisation and innovation. It is especially after
their collaboration with the large European development
company Pera that they have begun working in other areas
than they have done traditionally. However, the areas are
still part of their value chain just as the projects are within
areas that will solve problems or add value for their collaborators. At the moment they have three radical development projects in the pipeline. In this kind of open innovation new technologies are often very important, but
Gabriel was not aware of all the relevant technologies
available. Pera has one of Europe’s most extensive databases regarding technologies and they are also well
known in these networks. They have daily contact with
i.net that consists of 25.000 scientists in Europe and has a
reputation that Gabriel does not have so they use Pera as
spearhead. On the three radical projects Gabriel will
receive the IP rights. Pera has had a special interest in
Gabriel because of the way that they are organised by
processes, and Pera will move into Gabriel’s new innovation centre and collaborate with Gabriel on their new
business unit called InnovationMaster which is aiming at
Gabriel’s value chain.
Advantages of open innovation
Gabriel is convinced that the work with Open Innovation
has had a positive influence on their development costs.
They find that the right co-operating partners have a clear
gearing in Gabriel’s development costs. Gabriel has actually evaluated on this together with Pera. If three percent
of the turnover is used on development and they do not
use open innovation they probably get an effect around
three percent. But if they use the same three percent in
open innovation Gabriel is convinced that they will end up
with an effect that is the double. If you include significant
EU funding you get an additional effect because it requires
open innovation and you get an output on 13-14 per cent if
you invest three per cent of your turnover.
On the other hand, Gabriel has not experienced that the
speed of development has been shortened, rather the
reverse, but the result has still been considerably better.
14
Mondaymorning
Challenges of open innovation
The biggest challenge in open innovation is to make sure
that the partners have adjusted their expectations. Related
to other cultures, and even similar cultures, one might
assume, that everybody has the same expectations, but
this can not be taken for granted. Gabriel does a lot to
make sure that the partners know each other’s positions.
Gabriel has not had negative experiences with open innovation. Gabriel cannot think of legislation or other external factors that have complicated the work with open
innovation. But if Gabriel must drive through the radical
projects, they readily admit they depend on large EU
grants.
Gabriel has not experienced complications with intermediaries spinning in and out of the company. By contrast
the employees find it enjoyable that there are new people
in the staff cantina every day. As it is a part of Gabriel’s
culture to look for help and ideas from the outside, the
company does not experience the Not-Invented-Here syndrome or the Not-Sold-Here-Virus, although unused ideas
that are developed by Gabriel often are handed over to
other companies.
Open innovation in the future
Gabriel will also work with open innovation in the future.
Open innovation is the model for the way that Gabriel
develops and essentially conditions the co-operation with
Pera.
Gabriel is not using the internet in their work with open
innovation yet, but they can see the advantages and possibilities. They consider it very likely that they will use the
internet more in the future. Currently, Gabriel gets a lot of
approaches from prospective partners, and the fact that
they have taken part in Innovation Cup has given them a
number of contacts that they did not get before.
Open Innovation – Case studies from Denmark
Mondaymorning
Danisco Ltd.
• Open innovation requires an externally oriented organisation that can respond quickly and systematically to
inputs from partners
• Phthalates substitution technology is an example of
NGO involvement in vision-creation in the front end of
innovation enabling Danisco to discover trends early
• Untraditional partners like chefs inspire Danisco
employees
• Concerns on IPR leads to careful selection of open
innovation partners
Short presentation of company
Danisco’s history reaches back to 1872 but in 1989 three
companies merged under the name of Danisco. Today,
Danisco is one of the world’s leading producers of ingredients for food and other consumer products. The company has around 1,500 employees in Denmark and a total
of more than 10,500 employees in some 46 countries. The
revenue in 2005/06 was 2.8 billion euro. In 2007 Danisco
was awarded a second place in Innovation Cup and
received the special price for user-driven innovation for its
approaches and methods on user-driven innovation.
Overall approach
Danisco sees open innovation as a close collaboration
with other external partner i.e. NGO’s, customers, consumers or other people that may have an input on the
future of their company. They consider it extremely
important to have an open eye towards the outside world.
A large portion of Danisco’s development time is on incremental innovation and how they can improve their products. This often happens in collaboration with their customers. Danisco does not only sell a bag of ingredients to
their customers, but they also include services. They help
their customers optimize recipes just as they help them
with their processes in bread or ice cream production. If
there are problems in the process, they help their customers identify the problem and resolve it. This is how
they differ from their competitors, and this is what they
live off. They have done this for the last 30 years, but to a
higher extent.
The main approach at innovation at Danisco is that they
see themselves as a service business. They live of selling
physical products, but if they do not offer service it would
only be a question regarding price, whereas now they can
offer more value through their knowledge on food ingredients and food production. In that way, Danisco involves
Open Innovation – Case studies from Denmark
15
their customers in the development and they get new
ideas and knowledge from the meetings. Helping others
in the field gives them inspiration so this interaction is
important for development.
Danisco finds that open innovation requires an organisation that is open towards input from the outside, and an
organisation that can respond quickly on these inputs. It
also requires a trusty organisation where you do not have
to ask too much, but a management that trusts their
employees do what is important for the company. The
management must give the employees the possibility to
make decisions. The scopes and the vision of the company must be clear. If their project is inside this, employees
do not have to ask anyone else.
Danisco experiences that collaboration with external parties can occur everywhere, and the company needs to be
open to this. In this regard, it is very important for
Danisco that their employees get around and that they try
to identify new ideas. But it can be hard to bring the ideas
home when the focus mainly is on incremental innovation
and demands for efficiency and optimizing processes. But
the balance between efficiency and new business is in
focus, and Danisco is aware that they need to look at both
at the same time, so it is important to create an organisation that makes this possible. Therefore, they have
changed the organisation. Earlier they had an innovation
department that covered the entire organisation and all
divisions at the same time, but now every division has its
own product development and process development
department. The division of the departments have made it
clear what is in between the departments, and who is
responsible. The Danisco committee still meets regarding
development across the divisions.
The internet makes it possible to get in touch with far
more people, but Danisco has not taken full advantage of
that fact yet. They have got a website where one can ask
questions regarding ingredients, but it is not a site where
one captures challenges in the world.
It is hard to measure the balance between ideas from the
“outside-in” process and the “inside-out” process as it is
hard to measure how many people are inspired in the collaboration with Danisco. On the other hand, Danisco does
not deliberately trout for business with their unused ideas.
But it often happens as a result of informal discussions
when people are inspired talking to Danisco employees.
16
Mondaymorning
Danisco occasionally buys external technologies. They
know that they are not world champions in everything. It
is also important not to start with Adam and Eve and
develop everything from scratch. Danisco buys technologies and companies that appear strategically interesting.
But Danisco does not experience the Not-Invented-Here
Syndrome because the collaboration has often occurred
prior the buyout. And when they buy a new technology it
is because it is interesting, and employees typically find it
interesting.
countries too when adopted to local cultures and markets.
Danisco would like to make employees aware that it could
be interesting for them to work with other people in new
ways in open structures. However, open innovation can be
a costly affair and management must be convinced that it
is worthwhile. It is a challenge to move resources from the
incremental area to new businesses. But it is an important
process to explore the unknown potential even if immediate output can not be guaranteed. It is important that
managers can cope with this type of uncertainty.
When they sell technologies this often involves entire divisions including the employees and they therefore do not
experience the Not-Sold-Here syndrome. When the
employees do not follow the technology that they have
been working on it can be hard.
Identification of partners
Danisco has more than 2,000 active patents and patent
applications, and they have a procedure for not used
patents which is very commercially based. They look at
how much value is in the technology, and how much they
believe in the technology together with how much they
will pay for the patent rights. When they try to sell technology, and this is not possible, they give up the patent
when it gets too expensive to keep it. But patents can have
many purposes for Danisco. Patents can be used to protect
their business but they can also prevent others from taking out a patent for something that is peripheral for their
business. But as times go by and the business develops,
they might give up the patent. In that regard, they are quite
active. They do not pay for something that has no value.
But often, when they sell patents, they have to sell the
entire technology. This also happens for Danisco but they
do not develop a technology without a clear purpose.
Therefore it is rare that they end up with a technology
which they do not know how to use.
Globalisation influences Danisco’s work with open innovation, as they have been an international company for a
long time. They have innovation centres all over the world.
In Danisco’s own view the company could benefit more
from the ideas of the two to three billion people in developing countries, where Danisco is also located, and where
people have different eating habits. If Danisco wants to be
a truly global food company, they must ensure that they
also involve users in open innovation in these parts of the
world.
Danisco works on setting fixed global standards within
the company. They are an international company and what
is done in one country should be implemented in other
Danisco has always been very open to the needs of their
customers. The customers are naturally interested in their
own solutions and there is an issue of confidentiality. Of
course Danisco cannot take a solution from one costumer
and add this to the products of another customer.
Case: Open innovation with NGO’s and
chefs
Danisco involves NGO’s in the definition of challenges
to be tackled with their technological expertise.
Danisco wanted to solve the problems of phthalates
and has invented a substitution technology for
phthalates which is called GRINSTED® SOFT-N-SAFE.
However, it would be attractive from an idealistic as well
as a commercial point of view to establish mechanisms
for identification of these types of challenges on an
ongoing basis. Collaboration with NGO’s is vision-creating but not necessary solution-oriented. NGO’s are
involved in the front end of innovation where Danisco
seeks the visions and goals relevant to go for.
In a sense, Danisco does not see the cooperation with
customers as true open innovation. Open innovation is
rather the identification of people who have come up
with something that Danisco can partner up with. In this
context they have had collaboration with a chef who
would like to open a restaurant around molecular
cocking. The chef asked if he could visit Danisco and
learn more about the ingredients that one uses for molecular cocking. He then worked with three employees
from Danisco around developing his dreams. One of his
dreams was to serve a plate of air for people. He would
like to serve an edible soap bubble that did not taste of
soap. Through this collaboration Danisco got some extremely inspired employees that experienced that there
are other ways of thinking quality, that you make a soap
bubble that tastes of lime on the outside and of raspberry on the inside is interesting. This inspires the
employees to do other things.
Open Innovation – Case studies from Denmark
17
Mondaymorning
But when Danisco innovates in more open environments,
the conditions are different. If they join open collaboration relations with public organisations, Danisco solves a
problem for them and gets the IP rights or they share
them. Danisco would like to help someone solve a particular problem, but in return they want to use that technology and apply it elsewhere.
agreements become difficult. While the dispersion of royalty is not always that important, time to market is a key
factor. It is important to get as fast as possible to market.
It is important to develop new methods and identify
lawyers who have the same thoughts around open innovation and see new possibilities in making new types of contracts.
In the last five to ten years collaboration with universities
and other co-operating partners has been intensified.
Danisco identifies more universities to benefit from their
knowledge just as they look for partners who work with
technologies that have an interesting oblique angle to
what Danisco does. Danisco also tries to influence the
universities in a direction that they can use.
Danisco does not experience that legislation or other
external factors complicate the work with open innovation. External funding is considered too troublesome by
Danisco. If a company is serious about something, they
must do something about it no matter what the government says or does.
Open innovation in the future
Advantages of open innovation
Generally, Danisco sees far more advantages than challenges in open innovation and expects to do more open
innovation in the future. Danisco does not find that the
work with open innovation has had a direct impact on the
development costs or speed. But it will have an impact in
the future, because they have begun to identify some of
the issues in society at an early stage. The scanning of
open innovation opportunities will make them able to discover these trends earlier.
Challenges of open innovation
As an organisation Danisco has issues to deal with in open
innovation. The legal department is concerned with legal
rights and clarification of the roles in external collaboration.
Danisco has had negative experiences in the collaboration
with competitors, and this has a tendency to stick. An
organisation is influenced by past experience. If the past
experience involves problems with patents, the legal
department is aware that patents are something you must
look after and maintain. Consequently, collaboration with
competitors is kept at bay.
The biggest challenge in working with open innovation is
the legal aspects of IPR. Danisco is keenly aware of that.
There must be clear management guidelines in the development stage. At the same time it is important that staff
and partners do not get scared when you ask them to sign
a confidentiality contract of twenty pages before they enter
a workshop and share thoughts about the future. Methods
must be developed that do not scare off people, but ensure
that if anything comes out of the collaboration IP can be
protected. Without a confidentiality agreement patent
Open Innovation – Case studies from Denmark
The way that Danisco works with open innovation is likely to change in the future. They feel they can approach it in
a much more interesting way. If they want to use the communities on the internet, they need different kind of people with more soft skills, like for example anthropologists, than the engineers that are more prevalent in the
company today. Soft skills include communication, trend
spotting and interesting connections. Danisco feels they
need to change the profile of the people that work with
these issues to benefit even more. All employees must
focus even more on open innovation to make it more of a
calculated and planned process. Danisco would like to
have more double loop learning in regard to open innovation and make people think about the implications for the
rest of the organisation of solving one problem for one
particular customer. Employees need to reflect systematically on what they do, and how the experience can be used
in the rest of the company. Every contact with the customer or other external co-operations should create a
reflection.
18
Quilts of Denmark Ltd.
• Open innovation has reduced development costs as
Quilts of Denmark share the development costs with
external partners
• Partnerships ranging from sleep researchers to NASA
have given a small company like Quilts of Denmark the
advantages of a big company
• Open innovation has given Quilts of Denmark new
angles to the real product requirements and the entirety of the innovation process
• From the point of view of a small company open innovation requires rules to ensure a fair process
Short presentation of company
Quilts of Denmark was founded in 2000 and is behind a
number of international brands in the field of high quality sleep. The company is situated in Vamdrup, Denmark,
and has 75 employees. In 2005 the gross profit was 2.7
million euro. In 2007 Quilts of Denmark was chosen the
most innovative company in Denmark by Innovation Cup
in the category of small companies (less than 100 employees).
Mondaymorning
ences from working with thousand companies as the
main reasons for engaging in open innovation with Pera.
But a routine or system on open innovation is also used in
smaller projects. Quilts of Denmark finds it important to
make it clear which competences the different parties possess and who owns the rights to the new technology very
early in the process.
Quilts of Denmark has not sold technologies, but they
have thought about the possibility of using their technology in other areas. They have also developed some patents
that their competitors would like to use, and a couple of
these competitors have also been given licenses to use
them. In those cases they make agreements on which
areas and markets their competitors may use their technologies. The competitors have not been in the same
areas and markets as Quilts of Denmark or in areas and
markets that Quilts of Denmark plans to enter.
Quilts of Denmark has about fifteen large patents and a
number of small patents which are all in use. They have a
procedure for patents, in the sense that they evaluate the
commercial value of the patents compared with the costs
of maintaining them and the value of the protection.
Overall approach
The work with open innovation in Quilts of Denmark has
come along the way since 2000. Today the development of
new products always includes external partners. As it is a
young company, and co-operation with external parties
was a part of the conceptual framework from the beginning, it has not been necessary to change the organisation
to work with open innovation.
Quilts of Denmark sees itself as a born global company
because of their international background. They wanted
to be an international company from the beginning, and
today they operate in 35 countries. If they are to invest in
expensive development, the new product must have a
global potential.
Identification of partners
Quilts of Denmark works systematically with open innovation. They form different development consortiums
where the partners determine the rights to the technology
and the wishes on benefit from the beginning. The size of
the consortiums differs and depends. From three or four
partners to the biggest at the moment which has knowledge partners form Lund University Hospital and customers and technology partners from Italy, Spain and
Denmark. The project, which has a million Euro budget,
will probably receive EU funding and runs for four years.
Quilts of Denmark would probably never join such a large
development project themselves, and therefore they have
organised it together with a large European development
company called Pera. Pera is responsible for the project
management, and Quilts of Denmark mentions professionalism, their access to 500 engineers in Europe, a big
network consisting of experts in all areas and the experi-
There were areas where Quilts of Denmark had no knowledge and knew no one, i.e. sleep research, when they first
started. Therefore they actively sought a network in this
field by calling and asking different sleep researchers to
collaborate. Quilts of Denmark finds that they are very
good at using their network and it is important to have
some partners around as they give the company more
strength. From the beginning they also had an informal
advisory board.
Today they have many good contacts to well-reputed sleep
researchers. Quilts of Denmark has been able to say that
they do not have big budgets for the collaboration, but
they would like to work seriously with solving relevant
issues. On the other hand, when Quilts of Denmark distributes products, they write something about sleep, and
here the sleep researchers are always involved. The sleep
researchers find this interesting and they are interested in
Open Innovation – Case studies from Denmark
19
Mondaymorning
spreading knowledge about the good sleep just as this it is
part of their clause. Therefore, the sleeping researchers
can work with Quilts of Denmark.
Apart from sleeping researchers they also use companies
and technology experts in the co-operation on development if the external partners can provide knowledge that
they do not possess themselves.
Advantages of open innovation
The use of external partners has had a positive influence
on the development costs at Quilts of Denmark. When
they develop new technologies with external partners i.e.
suppliers they share the development costs, and the supplier invests in the development of the expectation of
orders. The work with open innovation has also shortened
the development time as their employees can work on
more projects at the same time.
Challenges of open innovation
Quilts of Denmark finds that one of the challenges with
open innovation is to establish a fair process. It is important that everyone in the development project gets ownership and interest in the project. But it is equally important
to have the same time schedule. Quilts of Denmarks has
had a few negative experiences with open innovation due
to the development with partners far away like for example China. Therefore, they experience that the physical
contact is important.
Quilts of Denmark has not experienced the Not-InventedHere Syndrome. There is an understanding in the company that it is a large advantage for a small company to
acquire external knowledge and technologies which gives
them some of the advantages of a big company. They also
find that this is the possibility for Denmark if companies
can handle and get the right projects.
Quilts of Denmarks does not experience that legislation or
other external factors complicate the work with open
innovation. But there are some demands to the products
that make it complicated. They are engaged in the work
with international standards, as different standards in different countries have a very negative effect on the company. As it is now, Quilts of Denmark has to make different
products for every country in Europe as the product
demand on size differs.
Open innovation in the future
Quilts of Denmark is convinced that they will work more
with external partners in the future. The approach to open
Open Innovation – Case studies from Denmark
Case: Working with NASA on a healthy
sleep
The quilts made by Quilts of Denmark are based on
knowledge provided by sleep researchers. The sleep
researchers could tell Quilts of Denmark what the real
needs on quilts were. Normally quilt producers concentrate on comfort, and this of course has significance.
But when it gets to insomnia the important issue is
temperature regulation. It is not enough to produce
something that isolates and gives you an immediate
comfort. The temperature regulation in the middle of
the night is more important which the sleep researchers could tell them.
Quilts of Denmark worked on a technology inside the
company that could regulate the temperature in quilts
but the technologies did not work. In some scientific
magazines they read that NASA had solved this problem
and invented a technology called TempraKON®. They
then contacted NASA. At that time many people asked
them, if they could just call NASA. And actually they
could. When Quilts of Denmark got on to right people,
the people at NASA were quite surprised that a small
company from Denmark was interested in what they
had worked on. So NASA kindly shared their knowledge.
It took two weeks before Quilts of Denmark got trough
to the right person, so stubbornness was important.
NASA sells some of their rights for technologies that
can be used at peace full purposes. It is a part of
NASA’s objects clause that they receive public funding
for research, but in return the technologies must be
used to improve the quality of life on earth. The company Outlast had bought some of these rights and used
it on insulation materials for house insulation. Quilts of
Denmark contacted Outlast and they agreed on a joint
development. Basically Outlast kept the rights on insulation materials and Quilts of Denmark received the rights in relation to down quilts and down pillows.
But the technology invented by NASA could not be directly transferred to the company’s quilts. The problem
with the technology was, that Quilts are soft and the
technology invented by NASA was stiff as chipboard. So
the technology had to be modified and they issued
some demands and a long development work with
Outlast to make it work. A producer of winter jackets
now has a licence production where they use the
technology owned by Quilts of Denmark.
The collaboration with Outlast did not require much
legal work. With NASA it was different. Actually the collaboration started out at as development work where
not much was written down, because they had not calculated the actual commercial value. Also no confidentiality agreements were signed, which they would probably do today.
20
Mondaymorning
innovation may also change. They have recently established a joint company in America with three partners. It
started out like a project, but it has now developed into at
joint company.
They have not used the internet (blogs or communities) to
a very significant extend in the work with open innovation. They find that they should do so in the future and it
is probably coming up, but they have not taken specific
steps so far.
Open Innovation – Case studies from Denmark
21
Mondaymorning
Exiqon Ltd.
• Exiqon’s staff of researchers have brought with them
academic traditions of open innovation
• Partnerships with cancer researchers reflects Exiqon’s
mutually beneficial approach to open innovation
• Open innovation at Exiqon has had an positive impact
on development costs and time to market
• Exiqon tries to avoid licence agreements as they are
seen as inflexible
• Exiqon has systematised the work with external networks to align co-operations with internal development needs
Short presentation of company
Exiqon was founded in 1995 and launched its first product
line in 2004. The company is a leading supplier of highvalue gene expression analysis products for the life
sciences, research and drug discovery industry, has 70
employees and reached a revenue of 5.7 million euro in
2006. In 2004 Exiqon was selected as a top 100 innovator
by Red Herring.
Overall approach
For Exiqon there are two key approaches to open innovation. If Exiqon has applications that they wish to develop
they contact people who have expertise that would help
them in the development. The second approach to open
innvoation is user driven innovation. This can be external
partners who contact Exiqon with an issue or a solution
on their products.
Confidentiality agreements just as material transfer agreements are often used by Exiqon. Exiqon tries to avoid
licences when they develop with external partners,
because a licence agreement is complicated to work out.
Licence agreements are considered time-consuming and
must be worked out very early in the process where the cooperators do not know what the benefit of the development is. Secondly a licence agreement will often limit the
development because they may find out five years later
that the area is much broader then first assumed.
The business also has a very large number of products and
it is a challenge to follow small licenses and royalty payments.
Exiqon builds on a technology which they bought. In this
sense they have always been working with open innovation. At an intermediate stage open innovation was actually the strategy. From Exiqon’s point of view there is so
Open Innovation – Case studies from Denmark
much administration around EU grant applications for a
company like Exiqon that the potential economic benefits
are overshadowed. On the other hand EU collaborations
can be a way of financing useful projects and get connected with new groups of researchers. It was a part of their
strategy at a certain time; to take part in these networks
knowing that there was no immediate economic gain.
The organisation has not been changed to make Exiqon
benefit from open innovation, but they have systematised
the work with external networks and have tried to make
some evaluation criteria. University researchers are always
interested in co-operations with Exiqon, but it is important for Exiqon to align their co-operations with their
internal development needs and if the external parties can
solve their issues. For that purpose Exiqon has a committee that keeps track of which co-operations they enter
into.
Case: Working with researchers for the
benefit of both partners
Exiqon wanted to develop a technology that could visualize genes in intact tissue. They had some idea that a
technology they already had might be well suited for
this. They contacted a cancer researcher from the
Netherlands who had a specific expertise in this area
and had all the biological samples that were relevant to
test this. In many cases it is important for Exiqon, that
the researchers have access to the biological samples,
which is one of the longer steps in a development process. If they start the process from scratch with biological analysis Exiqon can do a lot from a technological
point of view, but when they want to test in a biological
problem definition, they need to have access to tissue.
Access to biological resources is critical to Exiqon’s
development work and therefore one of their key benefits from doing open innovation.
Sometimes external partners contact Exiqon with an
issue or a solution. For example they cooperate with an
American university which contacted Exiqon regarding a
technology that Exiqon possess. The university wanted
to use this technology in some applications. Exiqon was
interested in a co-operation and the university was
given the use of the technology. The university developed some new interesting methods that Exiqon benefits
from today. The university contributed with an issue that
Exiqon had a part of the solution for, but the final solution was developed by the university via Exiqon’s
technology. Exiqon acquired new methods for their
technology and the university solved a problem and
obtained scientific publications and grants.
22
Exiqon has 150 active patents and patent applications,
including 75 issued patents. They do not use them all, and
they do not have a formal procedure for handling unused
patents. As the costs on patents rise they evaluate on the
commercial potential. When the patents go into a national phase they have to be translated which means large
costs. In this phase there is a reality check. Do the patens
have value and in which countries?
In the last couple of years Exiqon has not disposed any
unused technologies, as they have been in a rapid growth,
and they believe that they can use the technologies some
day. But people have called Exiqon for licenses and they
have evaluated and considered every case. If the buyer has
patents in the same area they do not lose that much and
consider it.
Exiqon has always been a global company, and 95 per cent
of their production is sold in foreign countries. They have
opened a sales office in America, and this has resulted in
a more extensive network in America. This has also had an
impact on the development, as they get more input from
the users of their products.
Identification of partners
When Exiqon enters into development co-operations with
external partners they look at different things. They would
like to recruit ambassadors, and therefore the look at their
CVs, but they also work on defining what sort of issues
they have and to make it clear weather this collaborator
can solve this issue.
Exiqon looks for external development partners in all
phases of the innovation process and they often have more
external partners around the development of one product
at the same time. The projects are then formally coordinated and typically very project-oriented. In small projects
the work can go on in small satellites – which can be seen
as a form of skunk work combined with open innovation.
Mondaymorning
Challenges of open innovation
According to Exiqon there are two key challenges on open
innovation. It can be time-consuming to manage your network and time must be allocated to harvest the knowledge. Secondly there can be a significant cost factor
around the contractual issues.
The employees welcome it when Exiqon engages in external co-operations and therefore they do not find that they
experience the Not-Invented-Here Syndrome. Exiqon
finds that this probably is interrelated with the fact that
Exiqon has experienced rapid growth and that any help is
most welcome.
Exiqon has had a few negative experiences with open
innovation, when they have not made a clear agreement
on when scientific publications may be published.
Researchers would like to be the first to publish articles,
but Exiqon would like to time publications with their marketing strategy.
Exiqon often releases products for researchers which are
not fully developed. This is a calculated risky option as
researchers also write about the things that do not work in
the open as with the things that work.
The patent legislation is the only legislation or external
factor that has a negative impact on the work with open
innovation for Exiqon. In America and a couple of other
countries they have a grace period which means that the
inventor can patent an invention up till one year after he
has disclosed it. This is a quite unique American invention. Exiqon has used this from time to time in relation to
co-operations where they find something that a
researcher has published and they think is interesting.
They have a dialogue with the researcher and maybe file
patents inside the grace period. But this is not possible in
Europe.
Open innovation in the future
Advantages of open innovation
The work with open innovation has had an impact on the
development costs in a positive way, and Exiqon at present
has around twenty development co-operations with external partners. Exiqon finds that there is no doubt they have
saved on development costs. Open innovation has also
had a positive impact on the development speed. In both
cases savings are obtained because Exiqon does not have
to build the knowledge inside the company.
Exiqon will probably be slightly less engaged in open
innovation in the future as they grow and employ more
people inside the company. However, they do not have
deliberate efforts to reduce open innovation. The way that
they work with open innovation may change over time, as
they also improve their internal processes on an ongoing
basis. Changes in internal processes could have an impact
on the work with open innovation just as it can make the
pros and cons around open innovation more visible.
Open Innovation – Case studies from Denmark
Mondaymorning
Exiqon does not use the internet (blogs or communities)
in their present work with open innovation. But their
rapid growth has challenged the knowledge sharing
inside Exiqon for which reason NEWS (Now Exiqon
Works Smarter) an intranet for internal knowledge sharing has been introduced.
Open Innovation – Case studies from Denmark
23
24
IBM Denmark Ltd.
• The internet has provided IBM Denmark with inspiration for new ways of working with open innovation,
Innovation Jam, which has resulted in many new business ideas
• Open innovation has increased development costs but
given IBM Denmark competences that they would not
have been able to build themselves
• Technologies developed for container monitoring at
Maersk has through well-functioning internal knowledge sharing at IBM Denmark resulted in technologies
developed in one business area being used in other
business areas
Short presentation of company
IBM Denmark was established in 1950 and is Denmark’s
largest IT-company with some 6,100 employees in the
country. IBM Denmark delivers IT services and sells hardware and software products that are mainly developed at
their research and development laboratories. A leading
global player in its field IBM Denmark has a long history
of open innovation experience.
Mondaymorning
strategic customers. ODIS is an organisational change.
Relationship managers in research have one-on-one relation with two or three big customers. EBO (Emerging
Business Opportunities) is another area that developed
around seven or eight years ago. EBO are principally some
temporary global encored organisations that identify
potential business areas where they can see a growth
potential for IBM, of a certain kind of size (typically
around one billion dollars) with a time frame of three to
five years. They can work long term and across traditional
organisation and they are not in the same way measured
on quarterly revenues as the most of IBM.
As they mature these projects IBM reassesses on the product portfolio as the products are produced and get a part
of the normal organisation while EBO focuses on something else. EBO might also shut down the organisation if
their mission is accomplished or they may have built a
community of business partners around the project. It
may also turn out that this is not an area for IBM, as there
is not a market, or the customers go some were else. In the
last case they may shut down the organisation and move
their resources somewhere else or they might sell it to
external parties.
Overall approach
Although IBM is a large company with around 360,000
employees, they are aware that a lot of the ideas are outside the company and that the bright minds are not only
inside IBM.
In 95 percent of the cases IBM does not innovate for the
sake of the innovations. They innovate because they know
that the innovation has significance and can be commercialized. Therefore, they find it is important to get impulses from the outside. Open innovation according to IBM is
when you include customers, business partners, universities, research institutions and others outside IBM in the
innovation process. But IBM also provides external partners with their knowledge and they sell their patents and
their innovations: ODIS (On Demand Innovation Services)
is a part of IBM where they mix their research and their
consulting competencies and sell innovation projects to
customers.
The work with open innovation in IBM has changed over
time. In resent years the pace of change has increased.
The research became much more outwards in connection
with the crisis in the early nineties. They found that if they
wanted to survive, they had to listen to their customers.
IBM has introduced new roles for certain parts of the
organisation who are given the task of working with
Identification of partners
IBM Denmark engages in open innovation projects with
other parties. The projects must create value and have a
commercial potential just as the external parties must
have competencies that IBM does not have on its own or
the external parties can bring new technologies to the
project. This may also include very small companies that
have some sort of core competence. There are no special
demands on how external parties must contribute in the
work on open innovation.
An example of open innovation is ElderTech where IBM
Denmark has made a public private co-operation contract.
They look at how one can monitor elderly in their own
homes and create some technologies that the elderly can
handle so that one can meassure their blood pressure and
weight on an ongoing basis. Another project in healthcare-IT is on how one can predict that elderly get a staggering walk and fall over to prevent this from happening.
This collaboration involved a technology that IBM knew
that DTU was controlling as they had developed some
thread less censors that could monitor this which they
used it to monitor how pigs walk. Therefore IBM included
some knowledge from DTU and tested the technology on
elderly. The knowledge was given back to DTU who was
Open Innovation – Case studies from Denmark
25
Mondaymorning
made aware of that there were other applications for this
3D accelerator.
Advantages of open innovation
IBM Denmark finds that open innovation has an impact
on the development costs because they involve some competencies that they do not have to develop themselves. The
development might get a little more expensive and slow
but they get some competencies that they could not build
themselves. Open innovation can slow down the process
because of the external decision making process.
In recent years IBM has run specific activities to get input
on innovation. Innovation Jam is a very fast process which
they run over 72 hours. Via a special website all at IBM,
universities, thought leaders, family members and customers are invited to participate in a debate about topics
that IBM decides. Last time it was big global issues: environment, healthcare and traffic, and ran in two rounds. In
July they raised some topics and started the discussion
that ran over 72 hours. They had quite a few people and
software that could analyze the incoming data: What is
the trend? What is especially discussed? What are made
suggestions for? In September they then ran a second
round where ten areas were crystallized out and they could
identify needs and interest. They then began to allocate
resources for related innovation processes and were funded with approximately 100 million dollars. Around
150,000 people participated, and 46,000 qualified proposals were collected. They have used some time on analyzing
the data. To be a success the process has to be managed
and some areas must be pointed out.
In one of the projects on healthcare, IT and electronic
patient records IBM Denmark (Acure) is involved because
they have special competences in that area.
At IBM Denmark they are interested in making an
Innovation Jam on issues where Denmark has special
competencies. IBM also offers the technology behind
Innovation Jam for other companies and their customers.
“Thinkplace” is an intranet site where all employees at
IBM have access and can submit proposals on new products and processes. People can be catalysts and rate the
incoming proposals in their area. Just like on YouTube.
The product or process may then move on to the next
level, and managers can sponsor an idea and take ownership of the idea. A team of typically three or four people
from all over the world with the right competences can be
formed. They might get allocated one day a week to work
Open Innovation – Case studies from Denmark
Case: A global collaboration on container
monitoring solutions
IBM Denmark has a global competency centre on logistics. They have an organisation that only services logistic companies and especially the company Maersk
with a lot of the very specialised systems that they
have. Maersk is a strategic customer and IBM often
makes a value creation centre with their strategic customers, where innovative core employees from both parties are brought together. Employees from research are
appointed and they have a direct relation to the customer and they start looking at which areas they would
like to develop inside. One of the things that were brought up was the monitoring of containers, as there were
some demands from the American government. IBM
was already looking at that area so they decided to join
forces with Maersk and exchange some of the ideas
and IP rights that they had, and they actually merged
these IP rights and made a joint development project.
Together they developed a global container monitoring
solution, which is very unique device that can be placed
on the container. It communicates in different ways so
that one always knows where the container is, if it has
been opened or shook and if there are dangerous
things in it when it approaches the American harbour.
This co-operation included people from Maersk, external experts in telecommunications where they needed
competencies from the outside, and their research in
Zurich, their ODIS (On Demand Innovation Services)
people which are their consultancies. At team of
approximately 40-50 people worked on a solution that
was found nowhere else in the world for a couple of
years. The project was global as they have people situated in America and Zurich, just as they had quite a few
people situated in Denmark because this is where the
customer, Maersk was situated, and this is where they
got the business knowledge and were told which requirements the solution had to fulfil.
The project also integrated other companies with similar demands for this kind of technology. A big transport
company that works with flight transport was interested
in wether this technology could be used on containers
that are loaded into aeroplanes or transportation by
road.
When IBM works on projects they create knowledge and
make sure of telling about this inside IBM. This can
make people from other industries interested. At IBM it
is very easy to locate who is on a project. This creates
the possibility for employees to present knowledge to
other customers who have related issues.
26
on and develop this technology or business model.
Thinkplace is as a starting point internally. But the later
idea development might just as well include external partners as in the normal business model. IBM also has some
programs that are called “extreme blue” which are innovation development projects that involve universities in a
short development period around six weeks, and an idea
from “Thinkplace” might just as well go to “extreme
blue”.
Challenges of open innovation
One of the challenges regarding open innovation in IBM
is to find funding. There must be a commercial aim.
Corporate social responsibility can also generate funding.
Other challenges can be IPR rights which are handled by
the legal department. The biggest challenge is probably to
allocate the money, which is often taken from the normal
business. Open innovation often needs to be seen in a
long term perspective.
Mondaymorning
are more open towards using experts form other parts of
the world, among other factors because of their technological tools which makes this easy.
Open innovation in the future
IBM Denmark is certain that they will work more with
open innovation in the future. IBM Denmark has recently
been established in second life and open innovation is
seen as an essential part of this. They find it interesting to
look at whether second life can facilitate open innovation
as a place to meet and develop in three dimensions. IBM
Denmark sees second life as a place where everyone can
look at and comment.
IBM Denmark does not find that they experience the NotInvented-Here Syndrome, rather on the contrary because
their partner concept is such an integrated part of IBM.
They also find that people in IBM are proud of working
with other people. In the same way IBM Denmark does
not find that they experience the Not-Sold-Here Virus.
Employees are proud when a patent is sold, and they get a
certain amount of the sales value.
IBM Denmark does not experience barriers for open innovation. A study on e-readiness carried out by IBM and The
Economist even ranks Denmark with the highest e-adaptability in the world measured by six parameters. IBM
Denmark considers this to be a big advantage.
IBM Denmark runs about five to ten open innovation projects on radical innovation and they sign confidentiality
agreements when they engage in open innovation. Patents
are managed globally.
IBM Denmark does not find that the globalisation has had
an impact on their work with open innovation as they are
a global company. They have been working with partners
all over the world for a long time. But they are building
facilities for video conferences at the moment because
they want to level the earth also inside IBM, in relation to
their customers, as customers can get access to
researchers all over the world without travelling. The
globalisation has only had the impact that they can use
their network and offer this to our customers. But not in a
negative way. They also experience that their customers
Open Innovation – Case studies from Denmark
27
Mondaymorning
III Perspectives on open innovation
in Denmark
Open innovation - and active involvement of users in particular – is recognized by the vast majority of participants
in Innovation Cup as a key priority in strategic business
planning. However, if this general recognition is crosschecked with the prevalence of specific innovation methods it would appear rhetoric is ahead of practice. What is
known to be important is not always practiced.
Seen in a positive light, rhetoric ahead of practice means
an unexploited potential awaits businesses aware of the
possible benefits but have not yet realized the full potential.
The five Danish companies, subjected to the present case
studies, practice open innovation to a very high degree. It
comes natural to the case study companies to practice
open innovation. Neither does it appear to be a result of
direct pressure from globalization, nor – necessarily - a
very calculated strategic choice. The Danish leg of the
international giant IBM is the exception from this last
point. They practice open innovation due to a more strategic global focus.
Intellectual property rights
A shared experience by all five companies is the fact that
open innovation draws attention to the challenges of
intellectual property rights. The challenges do not stop
any of the companies from doing open innovation or recommending it for the future but establishing the rules of
the game from the beginning is seen as key to avoiding
subsequent conflicts over IPR issues. Small companies
draw particular attention to the need to establish rules for
a fair process. There needs to be clear benefits for all parties involved.
Open innovation is practiced with varying degrees of
openness and formalisation. A shared understanding of
the objectives of open innovation is seen as important to a
successful process. Companies who see contracts as key
to handling potential conflicts over IPR stress the need to
Open Innovation – Case studies from Denmark
involve lawyers with a clear understanding of the objectives of and particular mind set involved in open innovation.
Different starting point for open innovation
The studied companies have very different starting points
for their work with open innovation. They differ significantly in size and age. More than anything else, size and
age seem to be the two defining parameters. The smaller
and younger companies tend not to question the use of
external collaboration in their innovation activities. The
larger companies are generally more internally oriented
and tend to look in before they look out.
The size and age also effect how the companies organize
themselves internally for open innovation. The smaller
companies can easily adapt to the work pace and procedures of external partners, whereas larger companies
seem to be more troubled by the fact that other actors have
different development systems and traditions.
All companies are systematizing – in one way or the other
- their collaboration with external partners. High on the
agenda is making out and signing agreements enabling
the partners to collaborate more freely with less ambiguity.
The use of intermediates is mostly applied when development technologies and innovations are transferred from
one organization to another. In collaboration on development projects the connections are often more direct
between the involved actors.
Push and pull on the network
On the basis of the present case studies Danish companies
would appear to be very active networkers. In achieving
optimal benefits from collaboration in networks there are
both pull and push effects that work simultaneously. The
companies experience that their networks push new ideas
to them that prove very useful. But they also sometime
28
Mondaymorning
have to put a lot of effort into pulling ideas from new and
old contacts.
Open in the front end of innovation
The five cases in this study are mostly focused on open
innovation in the front end of the innovation process.
They are most keen on getting ideas from others and not
so much on developing their own in other organizations
or selling them to others. Some of the companies like
Danisco that actually push their innovations on to the
market through their customers do not perceive this as
open innovation, probably because the innovation is not
marketed by themselves.
Issues to be explored
The case studies provide a qualitative insight into the
innovation management processes at company level and
show many interesting perspectives on open innovations
in the Danish context. Younger and smaller companies
tend to be more open than larger and more established
ones but due to the limited scope of the study, it is difficult
to draw general conclusions on open innovation in
Danish companies as such. However, the study sheds
light on a number of relevant, yet unclear, elements that it
would be interesting to study in more depth.
For one thing the method of studying best practices limits
the knowledge about challenges with regard to open innovation. It would be very interesting to investigate cases in
which open innovation has failed. Rather than looking at
success drivers only, such a study could focus on obstacles
to successful open innovation and how these may be overcome. Learning from mistakes and recognizing the trial
and error nature of innovation processes requires confidentiality and respect for the companies involved. The
prize to be won might be useful insights into the black
box of open innovation. From a Danish point of view,
open innovation experiences by small and medium-sized
companies would be of particular interest.
Although Open Innovation is practiced to a high degree in
the companies studied, little focus is given to openness in
the later phases of the innovation process. Licensing out
technologies or spinning out companies would be interesting aspects to look into in the context. It would therefore seem relevant to try to make companies more aware
of the potential benefits to be derived from open innovation. A mapping of the challenges to openness in the later
part of the innovation process could prove useful in this
respect.
Open Innovation – Case studies from Denmark
Mondaymorning
Appendix A
List of Interviews
Gabriel Ltd.
Mr Jørgen Kjær Jacobsen, CEO
Danisco Ltd.
Mr Flemming Vang Sparsøe, Senior Scientist
Quilts of Denmark Ltd.
Mr Hans Erik Schmidt, Development Director
Exiqon
Mr Søren Morgenthaler Echwald, Vice President
IBM Denmark Ltd.
Mr Anders Quitzau, Business Development Manager
Open Innovation – Case studies from Denmark
29
30
Mondaymorning
Appendix B
Innovation Cup
Innovation Cup builds on a method measuring the most
important management parameters necessary to be successful with innovation. The method is developed into a
model entitled – “Seven Circles of Innovation” – in cooperation with:
• A range of Europe’s leading innovation research scientists, including professor in innovation, Anders Drejer
from Aarhus School of Business, Sören Salomo from
the University of Graz, professor John Bessant from
Cranfield University, professor José Santos from
INSEAD
• A wide range of leading Danish companies, including
Radiometer, Coloplast, Novozymes Danmarks Radio
and Jyske Bank
• Danish Centre for Leadership, one of Denmark’s leading development centres on management, and
Fremtidstanken, a forum for innovation thinkers
The model uses the latest knowledge and practise regarding innovation management and has been tested on 450
Danish private and public companies. On the basis of this
extensive research a web-based questionnaire has been
developed thus providing quantitative data for the identification of the innovative capacity of the individual company.
Innovation Cup analyzes the organisation’s innovation
competences on the basis of the results of a web-based
questionnaire, filled out by ten employees. Together with
assessment visits at selected companies, the steering
committee behind Innovation Cup works out an
Innovation Profile. The profile gives a picture of the innovation competences of the organisation, both strengths
and weaknesses, in three main areas:
Strategy, organisation, competences, culture and external co-operation. The quality of the framework defines
the ability for continual innovation
• Innovation processes – Innovation requires well-functioning processes. The innovation process is divided
into a number of different activities from idea generation to implementation. Each phase can influence the
total success.
• Innovation success and results – Innovations are categorized as successful if they have created value. Either
by the way of increase in sales and profit, better service,
increased customer satisfaction or if the innovations
have created completely new markets or contributed to
more effective internal processes.
With the Innovation Profile lined up the companies can
focus on selected parameters under the three main areas
as for instance market flow, internal co-operation,
resource application, external co-operation, team competences, information gathering and project management.
The company’s results are benchmarked with other participating companies and organisations – private and
public – in Innovation Cup. This provides a unique perspective on their profile and serves as basis for an
Innovation Profile (18-20 pages), summarizing their
strengths and weaknesses, opportunities and challenges.
Innovation Cup 2007 culminated with an Innovation
Camp on 27 March 2007. Innovation Cup participants
met with leading experts at an interactive “camp” and
developed new ways of handling challenges and making
use of opportunities on the basis of their individual
Innovation Profiles. More details can be found in the
report ‘Innovation Cup 2007: Vindertræk – perspektiver
fra danmarksmesterskaberne i innovation’ (in Danish).
• Innovation framework – fundamental conditions for
innovation are the cornerstones for all organisations.
Open Innovation – Case studies from Denmark