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HR and Open Innovation Prof. Henry Chesbrough, University of California, Berkeley & ESADE Prof. Wim Vanhaverbeke, Hasselt University, ESADE & National University of Singapore Dr. Nadine Roijakkers, Hasselt University March 4, 2013

We would like to acknowledge the efforts of Svenja Paul for providing input to this presentation on the basis of her master thesis.


Big gap in the (academic) literature •

Very little has been written in the academic literature concerning HR practices and the role of HR professionals in Open Innovation Golightly (2012) states that “(…) there is considerable potential for further research into the people side of Open Innovation, including (…) human resource practices (…)”

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The importance of HR practices •

Open Innovation is a people-driven business: –

“(…) Fundamentally, Open Innovation is about people dealing with people (…)” (Harwood, 2010)

Its therefore highly important to learn how HR practices related to both internal and external talent management can drive Open Innovation success 3


Quotes „You can create followers, but you can‘t create leaders“

- Tom Coen, Founder and Managing Director at Induct

„Openness exists in many people but it is buried“

- Harry Berry, Founder of Brightstar Innovations

„People can be trained to be more open“

- Lucienne van der Werff, VP HRM at DSM Innovation Center

„People should be a lot more proactive than average in order to make quick changes“

- Marc Hufkens, HRM and Deputy CEO at Ridley Bikes

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The relation between HR and OI effectiveness HR practices (Internal and external talent management)

Organizational climate / culture

Employees‘ attitudes and behaviors

Open innovation effectiveness

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Internal talent management •

OI skills, traits, and roles relevant for selection, training, and evaluation purposes

Other HR practices to stimulate OI behavior

Dynamic view on HR in relation to OI

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OI skills, traits, and roles •

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HR needs to select and train individuals for OI based on identified skills (du Chatenier et al, 2010) Individuals should have the right capacities (Wagner & Piller, 2012), skills (Mortara et al, 2009), and capabilities (Golightly, 2012) Training is essential, rather than merely desirable, when preparing the company for open innovation(Mortara et al, 2009) 7


Soft and hard skills • Soft skills rather than hard skills underlie OI success • OI performance evaluation should focus on these soft skills: Its not only important what people get done but also how (Sloane, 2012) • There should be a balance between hard and soft skills (Thoen, 2011)

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Necessary OI skills General (based on Thoen, 2011): • T profile: Breadth and depth fusing specialisation and generalisation • Three legged stool: The technical mastery, the organizational mastery, and the business mastery

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Listing of specific OI skills •

Entrepreneurship

Internal and external networking

Belief in change, bring about change, faciliate change, question status quo

Tolerance of uncertainty and risk taking

Need to learn, open to learn, and quick to learn

Optimism, passion, and energy

Able to grasp the big picture

Team player

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Interactive poll 1 What are the three most important skills for Open Innovation? •

Entrepreneurship

Internal and external networking

Belief in change, bring about change, faciliate change, question status quo

Tolerance of uncertainty and risk taking

Need to learn, open to learn, and quick to learn

Optimism, passion, and energy

Able to grasp the big picture

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HR practices •

Strategic challenge exchange to stimulate change, creation of relations, exchange of ideas, acquisition of external knowledge, create interdisciplinary knowledge in employees, etc. (Donkor and Monti, 2010) Leads to high motivation and retention of staff Examples: Google and P&G swapping employees and network of four Swiss MNCs strategically exchanging staff frequently 12


HR practices • ‘Open choice of career paths and researcher mobility‘ within the firm (Petroni et al, 2012) • Ideally all talents and future managers start in the R&D department and then move further, so that R&D knowledge is integrated in all departments (Petroni et al, 2012; Harryson, 1997)

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A dynamic approach • Different skills are needed in different phases of the innovation process (Lindegaard, 2010) • It is very rare for one person to possess all the ideal skills for OI; different people may need to be involved in the OI activity at different points in time (Mortara et al, 2009)

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External talent management • From 'talent ownership' to 'talent attraction’ • Talents need to be kept connected even when not internally employed • ‚Attract and manage external talent‘ in addition to ‚finding the best internal talent‘ • ‚Build and curate talent pools‘ • Create value for the external talent pool in order for them to want to stay connected • Philips example on spinoffs 15


People-driven OI •

Individuals and their attitudes are the driving force behind the success of OI (Du Chatenier et al, 2010; Lichtenthaler et al, 2011).

Focus first on getting individuals to realize the potential value of Open Innovation, so that they can then put in place practices that realize its actual value (Golightly, 2012).

The ability of an organization to increase the absorptive capacity of its individuals has come through strongly as a crucial step in realising OI value (Golightly, 2012).

With respect to absorptive capacity “people may be in a certain role today but have the expertise we're looking for because of previous experience. We often forget people are in their second and third careers” (Byrum, 2012) 16


The role of the HR department •

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The HR profession will have to build new core competences in network orchestration and managing talent - no matter where the talent lives (Kelley, 2012) The HR department needs to redefine its role (Mattes, 2011): Establish a Chief Talent Officer; Engage in building internal and external innovation networks; Contribute to the design of these networks (with respect to e.g. cultural issues); Drive adoption of internal and external innovation networks; Support OI implementation by providing leadership in culture change; Drive OI into all of the firm‘s business processes; Consider OI leadership aspects when leader/top management positions are to be filled; Bring in OI aspects when corporate structures and processes are redesigned; Review existing training and coaching programs in the light of OI; Design new training and coaching programs in the light of OI concepts 17


Interactive poll 2 What are the three most important focus points for the HR department? 1. Establish a Chief Talent Officer 2. Engage in building internal and external innovation networks 3. Contribute to the design of these networks (with respect to e.g. cultural issues) 4. Drive adoption of internal and external innovation networks 5. Support OI implementation by providing leadership in culture change 6. Drive OI into all of the firm‘s business processes 7. Consider OI leadership aspects when leader / top management positions are to be filled 8. Bring in OI aspects when corporate structures and processes are redesigned 9. Review existing training and coaching programs in the light of OI 10. Design new training and coaching programs in the light of OI concepts

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References •

Golightly, J. (2012): Realising the value of Open Innovation

Blog entry (2011a): innovation-3, Mattes, F.: HR departments take the driver‘s seat in Open Innovation

Blog entry (2011b): innovation-3, Mattes, F.: Report from the German flagship conference on Open Innovation

White paper (2012): innocentive, Kelley, B.: Harnessing the global talent pool to accelerate innovation

Harwood, R. (2010): Motivation in Open Innovation, University of Cambridge (audio interview)

Du Chatenier, E. (2010): Identification of competencies for professionals in OI teams, R&D Management, 30, 3

Sloane, P. (2012): A guide to Open Innovation and crowdsourcing

Interview Chris Thoen (2011): Chris Thoen on Open Innovation part II

Lindegaard, S. (2010): The open innovation revolution

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References •

Donkor, C. and Monti, F. (2010): Strategischer Talentaustausch als Erfolgsfaktor für Innovationen

Mack, J. (2008): Google, P&G swapping employees, Direct Marketing News

Byron, E. (2008): A new odd couple: Google, P&G swap workers to spur innovation, The Wall Street Journal

Wupperman, A. (2011): Kann man ‚Talente tauschen‘? – Open Innovation im Bereich Human Resources, Presseanzeiger

Petroni, G. et al (2012): Open Innovation and new issues in R&D organization and personnel management, The Int. Journal of Human Resources Management, 23, 1, 147-173

Palensky, F. (2011): 3M’s Open Innovation, strategy+business (Interview)

Harryson, S. (1997): How Canon and Sony drive product innovation through networking and application- focused R&D, Journal of Product Innovation, 14, 288-295

Bingham A; - Spradlin D. (2011): The open innovation marketplace

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References •

Interview with Byrum, J. (Global Head of Soybean Seeds and Traits R&D, Syngenta) (May 2012). From: Syngenta Thoughtseeders, IdeaConnection. Retrieved from; http://www.ideaconnection.com/interviews/00304-SyngentaThoughtseeders.html

White paper (2012): innocentive, Kelley, B.: Harnessing the global talent pool to accelerate innovation

Lichtenthaler, U.; Hoegl, M.; Muethel, M. (2011). Is your company ready for open innovation? In: MIT Sloan Management Review, Vol. 53, no.1.

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Hr and open innovation