Throughout his more than 35 years at DSM, Rob Kirschbaum has witnessed the radical evolution of the now multinational company from its coal-mining roots to a life and materials science firm. He has taken active part in this change, holding several business development functions over the years. Until 2015, he has served as the vice president of open innovation.
Kirschbaum is widely acknowledged for his pioneering role in the field of open innovation, which means essentially relying on both external and internal knowledge and resources to enable DSM to develop new products and services.
As a concept, open innovation is the understanding that knowledge is distributed worldwide, and that the benefits of collaboration across external experts, universities, suppliers, competitors, customers, NGOs and other actors often exceed the risks. This concept is now an integral part of most of business school curricula.
Last month, Kirschbaum delivered an inspiring lecture to International Business students at the Maastricht University School of Business and Economics (SBE) who were taking part in a global business course. He showed how different topics relevant for global managers are applied at DSM. Central to the lecture was the focus on open innovation of global firms about which he addressed the following questions.
Why did open innovation become a necessity for firms?
Thinking about the mega challenges of today, such as pollution, climate change or poverty, no firm, government or non-commercial organization alone is large enough to address these concerns. Hence, they team up to join their skills and resources. Also, many different business models emerge nowadays and quickly become obsolete. This development demands from firms a much shorter time from the invention stage to availability on the market. Joining forces allows them to speed up the innovation process. Another reason is that open innovation allows capitalizing on ideas that firms have come up with but are not pursuing further.
These ideas might not fit with a particular firm’s strategy or resources. Through open innovation, firms offer these ideas to other organizations, give out licenses or spin them out in new firms to give such ideas a chance somewhere else. At the same time, this creates the additional possibility of obtaining a profitable return on investment in innovative activities like R&D.
How has open innovation evolved over time?
It has become widely accepted and its professionalization has tremendously improved. New innovation brokers/traders such as Innocentive or Yet2Come have emerged that facilitate both inside-out and outside-in-processes. Large firms have embraced venturing models and in-house incubators that offer external and internal entrepreneurs financial and managerial support to develop their ideas further.
What are current key challenges of Open Innovation?
Taking advantage of open innovation demands a culture shift in firms. They need to overcome the “not-invented here” syndrome, where people are resistant to ideas from beyond the firm boundaries, toward a “proudly found somewhere else” mentality. Developing motivation systems and measuring performance for organizations, teams and individuals represent a key challenge.
What can universities do to benefit and be active participants in open innovation?
Universities should seek active contact with commercial and non-commercial organizations. They receive much credit for their knowledge and are highly trusted for their independence. Both qualities are important to be regarded as a trustworthy facilitator of collaboration across multiple partners.
At the same time, universities need to show their willingness to address the needs of firms operating in a highly dynamic world. They also need to display a professional attitude in working together with other partners. Both out-of-the-box thinking and sharing their academic knowledge through inspiring ways is critical. Think, for example, about incubators that bring together academics with experienced business angels and regional venturing capitalist firms.
Rob Kirschbaum now combines consulting practices (small, medium size as well as large companies) with supporting organizations through participation in their Advisory Boards (SakuragiConsult.com).
The Global Business course is offered by the Organization & Strategy and Marketing & Supply Chain Management departments, and is co-coordinated by Prof. Dr. Wilko Letterie and Dr. Dominik Mahr.