Keynote speaker, Dr. Solomon Darwin, known as “The Father of the Smart Village Movement” stepped onto the Kraftwerk stage, fiddled with his two Macbooks and beamed a jolly smile to an international assembly of 200 entrepreneurs, intrapreneurs and innovation seekers. Little did participants attending digitalswitzerland’s Corporate Startup Summit event (CSS) recognize the American professor as a November Samichlaus, bearing gifts more valuable than all the gold cloistered in Switzerland.
On the Origin of Species
Darwin is a robust man in his late 50’s with neatly trimmed beard kitted out in executive uniform of dark suit, white shirt, maroon tie. No stranger to the mantra of open innovation, the Director of Corporate Innovation at University of California, Berkeley, quickly got attendees’ attention by dispelling illusions developed lands, like Switzerland or the EU, can expect their nation – or national champions, to remain relevant doing business as usual in the age of digitalization.
Struggle for existence
To make it personal, he divided prevailing mindsets of business leaders into two camps. On one side: strategy. The other: innovation. Lest both seemed like viable options for his audience of corporate entrepreneurs (or intrapreneurs in open innovation parlance), he reminded us how in less than one generation, a good strategy, can be totally eclipsed by innovation.
His case in point, Motorola’s strategy producing high value – high cost mobile phones (think RAZR flip out), was displaced by Nokia’s strategy producing high value (from consumers’ POV) low cost phones (think Nokia 1110), who were dispatched by Apple’s innovation. Paraphrasing Darwin, strategy is about choosing restraints – innovation is about establishing new frontiers.
The UC Berkeley professor’s surname, (fully explained in, The Untouchables: Three Generations of Triumph Over Torment) ensured evolutionary science underpinned his reasons of advocating open innovation as the best option for any business’s longevity – and by extension, the future of our Swiss quality of life. Word count restrictions prohibit recapping his insanely useful speech, but fortunately, all the key points are in his book, “Smart Villages of Tomorrow: The Road To Mori.” Check out this powerful short read to grasp why the untapped markets of India and the world are the catalyst to developed nation’s reincarnation.
Henry Chesbrough, a UC Berkeley colleague of Darwin, is considered the “father of open innovation.” In 2011, he wrote in Forbes, “Conceptually, it is a more distributed, more participatory, more decentralized approach to innovation, based on the observed fact that useful knowledge today is widely distributed, and no company, no matter how capable or how big, could innovate effectively on its own.”
A former Harvard Business School professor, Chesbrough’s adds, “For business, open innovation is a more profitable way to innovate, because it can reduce costs, accelerate time to market, increase differentiation in the market, and create new revenue streams for the company.” If that sounds like the same old bullet point slide deck, you would have enjoyed Stefan Schöbi’s Fireside Chat at CSS titled: “Same Same But Different?” with Roger Wüthrich-Hasenböhler, Swisscom Chief Digital Officer.
Despite the appearance of similarities to conventional innovation (if there is such a thing), there’s a good reason open innovation is not on every CEO’s lips. It’s because of the 2nd of two aspects of open innovation. One part is “outside-in,” or involving end users in design and development of your offering. The other aspect is alien to most businesses – this is the “inside out” part, where ideas and technologies in a company are allowed to “go outside,” to be adapted into others’ innovation processes.
Let me put that more bluntly: ‘inside-out means you share your ideas with competitors.’ That’s why open innovation is a tough sell to old school CEOs – it goes counter to our base human nature that says if I originate something, the credit (and reward) should be all mine. Two hundred years of economic and social evolution institutionalized this thinking. Then in 1989, a British scientist at CERN invented the Web, and overnight, the word “open” took on a whole new meaning.
Lots of companies incorporate employee and customer input to improve innovation. But to learn if any Swiss enterprises were practicing both sides of open innovation’s coin, I tracked down two of its champions: Kai-Nicholas Kunze, Co-founder and CEO of Lings, a corporate startup within Generali Insurance and David Hengartner, Head of Swisscom Kickbox and winner of two corporate startup awards at CSS: “Best Corporate Entrepreneurship” (for Swisscom Kickbox) and “Most Impactful Intrapreneur“ (for David himself).
Kai spoke with me a few days after CSS, where he led a Best Practice Slam, described in the programme as, “Success and survival guide of a corporate startup acting as an innovation virus inside the corporate immune system.” I asked Kai straight up if Lings willingly shared their tech and ideas with the world.
An unflinching reply telegraphed an unscripted answer. Kai said, “For the technology I would say no. For the Lings (ideas) part, we are very open about what we do, why we do it, how we do it. We share quite liberally with almost everybody, even competitors, which, I have to say, is a mind shift for insurance. We are not used to sharing our knowledge but I really believe it’s something you need to do.”
Which begged an interrogative, ‘why’? Kai explained, “Lings is trying to do something new in the market. The more others do something similar, the more the whole insurance market will become a market that is interesting for customers. So, I believe in sharing what we do and I see competition helping to build up a new and better proposition for customers.”
Due to a hockey date with my wife, I missed seeing David at the 4th annual CSS Awards, presided over by a jury which included Lukas Strniste, founder of CSS, Benno Seiler, Head of Economic Development, City of Zürich, Katka Letzing, FinTech Lead at Kickstart Accelerator and Daniel Ginter, Sr. Dir. Corp. Enablement at digitalswitzerland. But after briefly getting to know this 33-year-old “Intrapreneur on Fire” post event, I wished I had passed seeing Kloten Flyers lose in the 3rd period to VE Zug.
In a follow-up phone interview, David told me Swisscom Kickbox, their “bottom-up intrapreneurship program,” is itself an example of inside-out idea generation. The first time he learned about this structured approach for identifying and fostering intrapreneurs within large corporates was in Amsterdam three years ago where Mark Randall, VP of Creativity and Chief Strategist at Adobe, and inventor of Kickbox, delivered a keynote about it at The Next Web conference.
When I asked what role open innovation plays in Swisscom Kickbox, David replied, “Since Adobe open-sourced the program, we were able to test, adapt and further develop it and now bring our ready-to-use version to other companies. We built open innovation deeply into our framework with the ultimate goal to enable cross-industry collaboration and build an open innovation ecosystem.”
Before he rang off, David weighed in on a key question I had mailed him, ‘is there one secret ingredient to successful open innovation?’ He said, “I thought about it again and I really think it’s about the people. Sure, I agree the culture of an organization also plays an important role, but the biggest asset of an organization are its people.”
David describes his goal as building a new “mentality of getting things done” culture. He added, “We’re all startup people on the Swisscom Kickbox team. We’re happy to take risks, to work in uncertainty, to get things done. In my opinion, that’s the one ingredient that makes the Kickbox program successful.”
Was it coincidence his viewpoint echoed Professor Darwin’s emphasis on people? Or do open innovation evangelists all think this way? David summed up his optimism for open innovation, “It’s the future. I think in a global and digital economy, enterprises need to collaborate, if they want to survive. Company boundaries will start to blur and employees will not just work for one company anymore.”
In contrast to a general appeal for more cooperation by Federal Councilor Schneider-Amman at digitalswitzerland’s Swiss Agritech & Food event, Solomon Darwin was explicit in his advocacy for open innovation. Itemizing a list of conditional realities, this early St. Nicholas ended his keynote with a gift of revelation: the secret to open innovation.
Useless — unless
Like a matryoshka doll of truisms, Darwin revealed the secret step by step:
- Data is useless — unless it is converted into information.
- Information is useless — unless it is converted into knowledge.
- Knowledge is useless — unless it flows and produces something useful (like technology).
- Technology is useless without a business model.
- Business model is useless unless it is sustainable and scalable.
- Scalability is useless if it becomes the enemy of sustainability.
- Sustainability is useless if it’s not making people happy.
Backstage after his talk, he patiently reiterated on tape, “Ultimately, the point is to improve the happiness index of people. Data can be transformed into knowledge, and the resulting technology can be made useful by a scalable and sustainable business model, yet none of it is worth very much unless it adds to the happiness of the people.”
In the final analysis, Darwin insists, “it is the happiness of the people that must override everything else. And that happiness is tied up in the ability of the community to be part of the process that takes them from abundance of data, information, knowledge, technology, business models to happiness.”
Learn more about open innovation (by joining) in Darwin’s Smart Village Movement.