Practical Success Stories of Open Innovation

Despite years of hype and countless studies, many still find open innovation quite an abstract concept. 

This post gathers examples and key learnings from a wide range of companies using open innovation in different ways. Some companies use open innovation to add value to their hardware, while others use it to gain more information for developing new products. 

These 16 examples of open innovation should encourage and inspire you to apply the concept to your own business. Think about the different types of co-operation and your key stakeholders and potential collaborators. Consider how to motivate them to participate. The stakeholders from our examples range from product users to smaller companies, that complement the product or help solve your problems, all the way to scientists and individuals wanting to participate in order to learn new skills and gain valuable experience.

Samsung - Diverse types of collaboration

Even though you might recognize Samsung from several plagiarism case convictions, Samsung has also been qualified as one of the most innovative big companies today. Of course, Samsung has a major internal R&D unit, but the company is also a proud open innovation advocate. Samsung does open innovation collaboration especially with startups.

The distinctive part of Samsung’s open innovation collaboration is that Samsung divides it to 4 categories. The categories range from partnerships to ventures and from acquisitions to acceleration labs. The four categories are even described as being the four legs of the open innovation activities at Samsung. 
The 4 categories of collaboration

1. Partnerships
2. Ventures
3. Accelerators
4. Acquisitions

Partnerships are essentially collaboration between companies. For example, the collaboration Samsung has with startups in Silicon Valley falls in this category. Typically partnerships aim for new features or integrations within Samsung’s existing products. 

Ventures can be described as investments into early stage startups. These investments can bring revenue in case of exits, but also provide access to new technologies that Samsung can learn and benefit from. For example, Samsung has invested in Mobeam, a mobile payment company.

Accelerators provide startups with an innovative and empowering environment to create new things. Samsung offers these startups an initial investment, facilities to work in, as well as some resources from their vast pool. The idea is that the products stemming from the internal startups could become a part of Samsung’s product portfolio over time or just serve as learning experiences for the company.

Acquisitions aim to bring in startups working on innovations that are at the core of Samsung's strategic areas of the future. These acquisitions often remain independent units and can even join the Accelerator program.

As an example of Samsung’s collaboration with startups, Samsung has acquired an IoT company called SmartThings to gain an IoT platform without having to spend the money, and more importantly, time on R&D. Samsung sees potential in the IoT industry and views it as a strategically important part of their future business and thus an area where they want to be forerunner. For Smart Things, it still continues to operate as an independent startup fueled with the resources of a big company. With the investment potential and home electronics of Samsung, SmartThings can really be developed into an integral part of Samsung products, by creating new IoT possibilities for homes.

Practical takeaway 

By collaborating with startups, Samsung aims to benefit from the variety of innovations that smaller companies have already come up with. These companies often have products that can complement or be integrated to Samsung’s own products, creating value for both parties.

On the other hand, the kind of companies that aim for new innovations requiring high initial investments are typically better invested in or just acquired. So, the main learning point from the Samsung case is that different kinds of companies at different stages of their lifespan have offer different kinds of possibilities. You should identify these and figure out the methods that best match the different kinds of opportunities.

Local Motors - Co-Creation in a community

Local Motors activates its open community through its Co-Create platform. The designed vehicles are then manufactured through, for example, 3D printing. So the key part in Local Motors’ product development is its completely open innovation platform. You don’t even need to be registered to their platform-site to see the new designs that the community has envisioned. Like in most other open innovation companies, the innovations are coined through open innovation challenges, like the LITECAR challenge.

In 2015 Local Motors had an Urban Mobility Challenge: Berlin 2030, the aim of which was to envision the future of transport in Berlin. Now, one year later one of the envisioned transport solutions has already seen daylight. It’s one of the most known Local Motors Co-Creation products, Olli, the self-driving smart bus.

Apart from being self-driving, Olli also works through your phone. You can choose your routes through Olli or even create new ones. Olli is not just some envisionment of the faraway future, it’s actually already hitting the streets of Washington D.C. Like other designs, Olli has been developed through the Co-Creation site after the initial design. You can, in fact, see the conversations and ideas that the community has posted there. The site even has ongoing development: Currently, they are looking for solutions in universal interface improvement and a superior suspension development.

Practical takeaways

Local Motors has positioned itself as an open innovation company in an industry that’s traditionally everything but open. The company actually challenges collaborators to make a difference and be a part of the change. This makes them stand out from their competitors. The fact that this openness is clearly a fundamental part of Local Motors, makes people see that open innovation is not just a marketing trick, but at the very core of the way they work.

This positioning and “strength of openness” brand is a great foundation for standing out and building collaboration. As a result, Local Motors benefits from an active and motivated community. The community is also a great advocate for the company. So in order to create an engaged community, you need to make sure that you’re committed enough for people to really believe in your initiatives.

Lego - Creating new products from community ideas

Lego is another example of how engaging your users creates more value. Lego activates its users through its Create and Share site as well as the Lego Ideas site. The Create and Share site lets Lego community members share their designs and Lego pictures, while the Ideas site actually aims for new product releases. 

As an example, the mini-Big Bang Theory Lego set is a community-based product that originated in the Lego Ideas. When the amount of supporters reaches 10k, Lego evaluates the design and the design can hit the stores under the Lego Ideas product label. The idea for mini-Big Bang Theory was submitted over 2 years ago and it took the project over 10 months to get from the Ideas site to production.

When the product ideas are approved for production, the original community members that ideated the product also get monetary compensation. The mini-Big Bang Theory is just one example. More recent products that are yet to be released in the Lego Ideas series are, for example the Adventure Time themed set and the Beatles - Yellow Submarine set.

The community provides Lego with thousands of new ideas annually, which means that Lego has a steady flow of free ideas that people are already waiting to buy. This open innovation approach in their product design phase is said to be one of the core factors for Lego’s successful brand. It has definitely been one of the things that saved their brand and made them stay at the top of the market.

Practical takeaways

If you make products directly to consumers, you should aim to activate your users into helping you create products that fit their specific desires. When the users interact with one another and tell you what they would want to see on the store shelves, you probably have ready demand, and can save a lot of resources on market research and reduce the inherent risk in R&D. Getting their voices heard can also build you a base of committed users. Just make sure you have the capability to implement at least some of the most popular ideas and communicate that well so that your customers can feel like they really made an impact. 

However, it’s noteworthy that the same model of user activation might not work as well in other kinds of environments, such as in some B2B contexts with a smaller customer base. So think, could user activation and participation bring you value, or are you on a market that requires you to take a different approach?

Facebook - Using Hackathons to generate fresh ideas

There is an interesting internal open innovation example within Facebook. At Facebook, they organize hackathons for their employees. The idea of these hackathons is that the employees generate new ideas and innovations and make initial versions of them. 

These hackathons are not only for developers, but for anyone within the company. The point is that you work with something that you don’t work with on a daily basis. It’s argued that doing things outside your day-to-day work and enjoying making a difference within the company are what generates outside-the-box creative thinking. Of course, you can’t undermine the effect of diversity in these hackathons either.

Developers and architects might have certain ways of thinking, so it makes things interesting when you get ideas, for example, from people who work in the finance or marketing department as well. When your employees meet each other across all the departments and other barriers that they normally have, they actually transmit tacit knowledge, the sense of team spirit across the company and build meaningful relationships within your organization. All this happens while the employees are creating and innovating something new for your company. When this kind of collaboration is typical for your organization, you also create a product-innovation centered culture for your workplace.

These hackathons are quite productive for Facebook. There are plenty of feature examples that can be traced back to these hackathons. For example, the like-button, live chat, and the Facebook timeline are ideas that have sprouted from Facebook hackathons.

The pride flag feature, that allowed you to modify your profile picture to support the LGBTQ community in 2015 was created at a Facebook hackathon. The idea was coined by two Facebook interns. Through the hackathon, it fastly spread throughout the company and ended up being released for public use. This example shows that your job title doesn’t necessarily matter when having a great idea.

Practical takeaways

Include the whole of your employee body. If your employees are knowledge workers and you pay them for their creative thinking, it makes sense that you include all of them in the process of innovating new products and features. Anyone can have a groundbreaking idea and it pays off to listen to them.  

Opening up innovation internally has both short term and long term benefits. In the short term you can get new ideas to develop your business, and in the long run open internal innovation can be a great tool to motivate your employees and boost the development of both their thinking and skills. In the even longer run, you should be able to teach this mindset of creatively and proactively solving problems to all your employees.

You can also get the aforementioned benefits of hackathons and open creative culture by arranging smaller events and sessions. Not all internal open innovation occasions need to be full-on weekend long hackathons, you could also have many of the benefits from practices like shorter idea challenges.

GE - Connecting with young talents

GE is famous for their open innovation challenges and initiatives on their open innovation page. These challenges aim for external open innovation and new ideas. Through these challenges, GE familiarizes itself to future potential talents around the world. The prizes for these challenges include scholarships, monetary awards, chances to work with GE on the project in question and paid internships at GE. These prizes are very appealing for young professionals and students in particular.

The benefit of this is that GE gets connections to talented young people on top of the innovation work in open innovation challenges. GE’s innovation challenges and the possibilities they offer also affect the employer image of GE in a positive way.

For example the Unimpossible Missions: The University Edition challenge is clearly targeted for students that are creative, have a certain level of technical skills and a clear recruitment motivation. Through the challenge, GE aims to get three smart and creative students to have their internship at GE.

Practical takeaways

Open innovation can be used as a way to connect with talented young professionals and recruit new talent for the company. The innovation challenges for individuals and universities can be a good way to do this. They enable you to see the potential of young talents in a much wider angle than in a regular job interview, case interview or even take-home exercises.

P&G - Being open about the innovation needs 

P&G’s open innovation with external partners culminates in their Connect+Develop website. Through this platform P&G communicates their needs to innovators that can access detailed information related to specific needs and submit their ideas to the site. P&G recruits solutions for various problems all the time. Connect+Develop has generated multiple partnerships and produced relevant products.

As an example, P&G’s COVERGIRL bypassed a lengthy R&D process by partnering up with OraLabs to publish a new lip balm, a market that was suddenly trending. As time is money, especially with trendy products, the collaboration with OraLabs really benefitted COVERGIRL. On the other hand, as P&G communicates its needs openly, it creates competition for the solution providers as well, which is of course great news for P&G.

Practical takeaways

Let others know what your needs and problems are. This makes it possible for others to propose customized solutions for you, which enhances competition. In the best scenario, you can pick the best innovator for your solution. Opening up about problems and needs can also bring great connections that you wouldn’t otherwise have found at all.

Being open about the problems that you have might be a scary idea, after all, not only possible collaborators but your competitors will be able to see what you are working on. Despite this, there are great benefits about opening up about your needs to companies that could solve your problems. The collaborative relationships can also last for decades, ending up being helpful on more than one occasion.

P&G often refers to collaboration with long-lasting partnerships as being efficient due to the fact that you already know each other's working practices inside and out. On top of the fact that being completely open gives you the best chance to get outside-the-box solutions that you wouldn’t have thought yourself, it’s also possible to create your own trusted community that you can share your problems with.

Nivea - Involving users in product development

Nivea’s B&W deodorant is a strong example of activating users throughout new product development from ideation to implementation. Open innovation per se is not as widely and openly practiced by Beiersdorf, the company behind the Nivea brand. The intimately open collaboration with possible partnering companies happens via Beiensdorf’s pearlfinder, which might be interesting to take a look at. However, the real case that we can learn from here is Nivea’s B&W deodorant’s development.

The idea for Nivea’s B&W deodorant was coined together with Nivea’s usersthrough social media. The way Nivea collaborated with its users throughout the R&D process is very interesting. They pretty much said that “okay, we know that our current product can be connected to stains in clothes. Could you share your stories and home remedies so that we can develop a better product?”

They basically shared what kind of product they needed, what seemed to be the reason behind these stains in the first place and how they could be prevented. The resulting B&W deodorant then became the first deodorant on the market that prevents white and yellow stains from appearing.

Beiersdorf then partnered up with a company they found via pearlfinder and developed, together with the users, the B&W deodorant. This admittance of issues in their product could have been seen as a sign of weakness, however, users were very active in collaborating with Nivea and the end-product ended up being a great success.

Practical takeaways

Your users might have surprising problems that you could solve. User involvement and activation might be a good idea in engaging them to collaborate with you. Even if open innovation collaboration may seem frightening to you, listening to your customers needs is common sense. So keep your eyes and ears open (also online!) for all ideas that come from your potential and existing users.

Of course, Nivea could have invented the invisible B&W deodorant by traditional means, but it would probably have cost more time and money. Nivea also gained visibility and committed customers by including them in the innovation process, which thus doubled as marketing. 

Open innovation is not just a cool way of doing things. It can have major cost benefits too. Do you know what your users are thinking of your product? Maybe there is a way of involving your users in the process, thus giving you helpful insight into their needs, wants and ways of bettering your product.

Philips - The High Technology Campus 

Philips has a wide range of open innovation activities. It has the platform, the challenges and it activates its own employees to think openly . Philips also established its own open innovation campus at Eindhoven in 2003. The High Tech Campus is open for a variety of companies to work in. It offers them tools to help accelerate their business and research projects.

Basically, the campus has been said to be a post-stamp-size Silicon Valley in Europe. The physical proximity has enabled Philips to work closely with other technologycompanies and make use of most of their projects, even those that would otherwise have been left on the shelf.

Currently, the campus works on its own, but Philips’ presence is still there and it continues to gain from the physical open innovation space. The possibility to actually work physically together has created an innovation ecosystem in Eindhoven with over 140 companies with varying sizes working in the same small area.

Practical takeaways

Creating and being present in spaces where there is a possibility to collaborate together is great for open innovation. Nothing builds collaborative and trusting relationships between companies and research groups like the possibility to visit one another casually on your coffee breaks to talk about what you’ve just been working on.

Even though technology gives you the possibility to open up your innovation to the masses, physical proximity is still a key factor in one-on-one close collaboration. Physical proximity is not always necessary. Companies can have active platform collaboration online and hold open innovation challenges worldwide. Still, if you work closely with others and want to establish close personal connections, you could benefit from these physical spaces that enable concrete encounters. Could proximity with collaborators be beneficial to your company?

Telegram - Enabling users to create content

Telegram is a messenger application that works on computers and smartphones very much like WhatsApp and Line. However, what makes Telegram different is how much users can contribute to its content openly. Users with any developing skills can create their own stickers and bots (i.e. their own content) on the Telegram platform. While Telegram can also be used like a regular messenger, it’s also possible for users to customize their user experience by themselves through their own features. 

Telegram has also some default features that are different from other messenger apps, like being able to ping members in a group chat and send messages forward. However, what makes Telegram interesting and popular is the fact that you can customize it to your liking.

Even though instant messaging is a very competitive market with giant applications like WhatsApp, Facebook, and LINE, Telegram has still gained a lot of users because of its ease, openness and the fact that you can create your own content. The Telegram company also encourages users to create, as they sometimes even grant prizes for new content.

Having your custom stickers makes it possible for you and your friends to have stickers made of the funniest moments that you’ve shared. Telegram also promotes the best stickers updating an in-app list of the trending stickers.

Practical takeaways

The main giveaway of this case is that openness can allow users to create versatile new features for themselves and customize their user experience. When users can create almost any kind of feature they want to, you can benefit from the best innovations. Telegram can even bring the most popular features forward to all users. So it might be a good idea to let your users create what they want to on your platform. It might just be enough to differentiate your product from all the others! Also, having the users configure a product to exactly match their needs creates a positive lock-in effect. Why would you want to change the product to a substitute, when others can’t be made to match your preferences?

Lilly - Gathering information 

Lilly is a pharmaceutical company, that has applied open innovation via its Open Innovation Drug Discovery program (OIDD) . In OIDD scientists (at universities as well as companies) can safely share biological data that aims for new drug discovery. Lilly then offers modern tools and help in screening and researching the data. So basically OIDD is a platform that enables companies to find new drug compounds faster.

OIDD is also a platform for generating R&D partnerships with Lilly. With the OIDD Lilly has generated a wide, Open Innovation 2.0 like open innovation network. In the network, all parties can benefit from the new value created within the network, in this case, from the new drug discoveries. Hence, new discoveries lead to new medicines faster.

This open way of working enables Lilly and other scientists to find new possible drugs and cures for severe diseases faster than before. Researchers apart from Lilly get the tools to test their compounds, while Lilly gets a great database of compounds. On the other hand, Lilly obtains connections that it can use when possible drug solutions are found.

Practical takeaways

The Lilly example demonstrates an open innovation network, and how that positively affects Lilly’s own R&D. The OIDD platform speeds up new drug discoveries, and when new drug compounds are found, Lilly can collaborate with the finding company. In the end, Lilly might be able to manufacture the end product and be the one to sell it. This kind of open innovation network can be issued in many ways, like via this case’s open innovation platform. You might not even need to create the network yourself as there are many existing open innovation networks that you might be able to join.

If you are still apprehensive about open innovation because of problems with potential intellectual property rights, you might want to reconsider. Lilly is a big company in the pharmaceutical field, a highly patented and IPR restricted industry and while they’ve certainly had to address these issues, they’ve made it work. And if they can make it work in the pharmaceutical industry, why couldn’t you? 

Hopefully this post has inspired you to come up with ways to incorporate open innovation to your business!