9
OPEN INNOVATION AS A DISCOVERY SOLUTION FOR CONFRONTING THE EXTRAORDINARY CHALLENGE

Christopher W. Miller

There is no problem that we face as a species that cannot be improved by the application of New Product Development Processes.

Merle Crawford

A senior fellow at Arthur D. Little & Company, Joe Stilwell, was frustrated. For more than 30 years he had designed food and medical packaging and felt that he had substantially contributed to improvements in material, function, and safety. By any standard, his was an innovation success story for the 20th century. His career focused on the creation of the “package” in “packaged goods” and was part of a broad-reaching concept that involved hundreds of companies and thousands of scientists, engineers, and marketing people. Joe was part of an effort that had improved and reduced the cost of containers, contributing to the feeding of hundreds of millions. By most estimates, improved food packaging had dropped food spoilage from 30 to 50 percent in 1900, down to 2 to 3 percent by 1980 (Stilwell, 1991). Then, in the early 1980s, his product had become the poster child for environmental degradation as medical waste floated up onto the beaches of the Jersey shore. In response to the accusations, he wrote the book, Packaging for the Environment: A Partnership for Progress, (AMACOM, 1991) in which he outlined the challenges surrounding medical waste, not the least of which was a regulatory nightmare of state laws and of city ordinances governing disposal. Just outlining the problem wasn't enough for Joe. As an engineer approaching retirement he wanted to fix the problem, not just report it. He did not want to leave it for the next generation.

The problem, as Joe defined it, was bigger than his company and bigger than any company; it cut across economic sectors and government and nongovernment entities. It was too messy to manage. Put quite simply, the problem of medical waste was an “audacious challenge.” So Joe turned to Open Innovation.

9.1 Surfing on Innovation Impact Waves: The Source of the Really Big Problem

Radical innovation creates waves of opportunity that pass through the global economy. Decades of effort and thousands of companies work in networks to bring the promise of an advance to a hungry market. Every innovation creates impact waves. Impact waves are the unintended and frequently unforeseen consequences that radiate out from an innovation over time. Some are positive, others, not. On occasion, innovation impact waves become significant economic events crashing on every shore, echoing back over and over with sustainable opportunity and expansion. Innovations in food and medical products packaging make these products more attractive, less susceptible to spoilage, and less expensive. These are the intended consequences. But as a mature innovation, while packaged goods provide better nutrition for many, they have also contributed to obesity and diabetes for more than a few.

These new problems are the result of the effect of innovation impact waves. And like all known market challenges, hundreds of researchers and entrepreneurs move to the new problem like white blood cells to a wound. Innovation impact waves are the unintended consequence of successful innovation. Discovering and defining them was the topic of “Hunting for Hunting Grounds: Forecasting the Fuzzy Front End,” Chapter 2 in the first PDMA ToolBook (2002). This current chapter is focused on solving the extraordinary problems and taking advantage of the unique opportunities impact waves create.

Rarely are the opportunities created by the waves within the scope, or even the awareness, of the initiating organizations. When the problems are perceived, they are likely to be out of scope and a mismatch with the organization's capability and strategy. If they are perceived by the initiating innovators at all, they are perceived as a distraction or a threat. If Donald Reinertsen's original fuzzy front–end theory is accepted, the emerging waves or problems can exist for half of the problem's potential lifecycle, before other companies see the opportunity and step in (Reinertsen and Smith, 1991). While they do eventually step in, it can take a very long time. The earlier analogy of white blood cells rushing to a wound is perhaps overly optimistic.

9.2 Process, Purpose, and Payoff

Open Innovation is a process that clusters many standard innovation tools in a way that can cut across customary economic and social boundaries. An open and collaborative response might work in situations where a high potential but poorly defined, and possibly poorly resourced, opportunity is perceived to exist. The following six short case studies (Table 9.1) tell the story of building Open Innovation (OI) initiatives that were designed to solve really big problems. Some are simple, direct, collaborative efforts for a targeted purpose, while others are profound efforts designed to ignite dramatic change. Although each case is unique, they do have commonalities that suggest six general process steps that most product developers would recognize as part of discovery, or at least of using discovery tools. At the end of these discovery stages the opportunity area is more clearly defined, and each partner has the chance to continue the collaboration or to independently move forward through development and delivery.

Table 9.1 Open Innovation for Really Big Problems: Discovery Stages and Associated Cases

Stage	Process	Purpose	Case
Identify a Need and a Champion	Champion leadership conversation	To build problem recognition and organizational will in the initiating company	Medical waste—the Healthcare Resource Conservation Coalition (HRCC)
Diagnose and Design	Building a clear vision of the challenge and an agreed-to process	Building a finite and achievable program	An Orphaned Pharmaceutical— ReVia
Build the Collaborative	Attracting key sponsors and collaborators	Bringing together the right partners and interteam commitment	Kitchen of the Future
Charter	The two-tier charter, one collaborative and one introspective (organization specific)	Assure shared and distinct partner outcomes	Coopertition in Insurance
Share Discovery	Shared experience; the collaborative discovery process	Building cross-organizational commitment to people and ideas	Moldless Forming
Collaborative and Independent Action	Moving to action	To leverage the discoveries and outcomes along multiple shared and independent paths	Challenging Diabetes with Collaborative Action

Stage 1: Identifying the Need and a Motivated Champion in Medical Waste

In 1992, Joe had participated peripherally in an Arthur D. Little (ADL) Emerging Technologies Workshop on Advanced Manufacturing Processes/Moldless Forming (Case 5). He wondered if a similar process might work as a starting point for his medical waste problem. (Medical waste was the tip of his spear because of its high profile and emotional nature.) With this challenge he embarked on a multiyear project with the single-minded determination to move from dialogue to action. His steps included:

• Chartering. Drawing together local interested parties, internal and external to the company, for a series of exploratory conversations. The purpose was to build a definition of the problem and a belief that the problem could be solved. (It helped that, at that time, ADL supplied cocktail carts for meetings after 5:00 pm.)
• Socializing. Using the initial conversations and connections, they gained high-profile demand-side sponsors: the chief hospital engineers at the Mayo Clinic, Jefferson Hospital, and Johns Hopkins all expressed early interest. These in turn attracted several high-profile supply-side sponsors: DuPont, Johnson & Johnson, and eventually Waste Management Inc. (WMI).
• Exploratory Problem-Solving. They sponsored a facilitated, multiday, “under-the-radar” conference. The goal was to get many stakeholders into the room at the same time to redefine the problem(s) from differing perspectives and break those problems into subtasks supported by subteams. About 20 organizations participated and started to call themselves the Healthcare Resource Conservation Coalition (HRCC).
• Scaled Problem-Solving. Subteams with more targeted tasks were able to recruit players with more focused interest. Once committed, the supplier side sponsored a second “higher profile” 2.5-day working session. This conference involved nearly 60 supplier companies, healthcare providers, government representatives, and recognized thought leaders. The team emerged with a directional plan that was refined by a self-selected volunteer core team.
• Sustaining Implementation. They then formalized an independent association (the HRCC) for independent organizational action. This group worked on preparing and promoting example laws and codes, standardizing language, and defining the problems and subproblems. The result was extending best regulatory practices in a more consistent manner across many government and nongovernment entities. The single most significant outcome was the building of direct and candid connections between supplier companies and customer companies.
• Sunset. The core volunteer team oversaw the formation of an ongoing dialogue and movement of action plans back into the individual organizations. Growing to the point that a professional staff was needed, the HRCC was folded into a more established organization—The American Society of Hospital Engineers.

Perhaps the most significant learning from this story is the importance of an acknowledged and well-liked leader in the field assuming responsibility for driving results. This inspired a confidence in the community that the problems of medical waste were solvable problems. While hard to measure, team members consistently report the value of the exercise to be substantial. Terry Hornsworth of the Mayo Clinic reported, “The most significant plus was my own introduction to the idea of a creative process, and that creativity could be applied to such a difficult problem.” And Joe Stilwell himself indicated his satisfaction, “at the birth of a newly unified health care industry initiative.”

Concrete outcomes included the creation of the Healthcare Resource Conservation Coalition for the purpose of education and state and local legislative reform. This operated for a number of years before folding into the American Society for Hospital Engineers. And in a small way, participants felt that by getting DuPont to take a significant lead in the effort (co-chairing the first conference with Edward Barr, the Senior Manager of Support Services at Jefferson Hospital) motivated the first early steps toward DuPont's “Design for the Environment” strategy. “Design for the Environment” has become a fundamental part of countless DuPont product development efforts and serves as the gold standard for environmental leadership within their industries.

Advice and Pitfalls

• A knowledgeable, well respected and “liked” champion at the top of his profession cannot simply be “assigned,” he or she must be the initiator. A Joe Stilwell either exists or does not. Are you (or can you find) a Joe Stilwell?
• The organization and leadership must be willing to support exploratory work that may, at its outset, have unclear goals and may even appear counter to the best interests of the organization. The goals, in this case, emerged and were clarified over nearly a decade of experimental problem-solving. Because this is not an ordinary business time frame, it is so important to have a committed champion at the helm.
• The socializing process is essential. It may be measured in months, but more likely in years, and possibly in decades. It may even need to include time to write a book (as it did for Joe). Free food and drink have value. This may seem trite, but a social period with food at the end of the workday signals a different level of conversation and thought.
• Have a clearly defined and agreed-to process flexibly applied. The example did not have a long-term agreed-to process. Each step was taken with the understanding that the process might go forward, or not, and the next step would have to be invented by the team at that time. A fuzzy approach driven by an energetic and charismatic leader worked in this case, but can't be considered a replicable practice.

Stage 2: Diagnosis of the Problem and Design of a Process for an Orphaned Pharmaceutical—ReVia^®

The 1970s and 1980s can be described as the golden era of pharmaceutical development, as research outcomes of the 1920s through the 1960s were harvested. Blockbuster compounds like Lipitor^®, Plavix^®, and Nexium^® seemed to be around every corner. Speed seemed to be of the essence both for companies and a world hungry for new medicinal solutions to their problems.

But what were the impact waves of this harvest? A significant jump in pharmacological longevity and a focus on medicine as the “cure” made the pharmaceutical industry the largest segment of the healthcare industry. As blockbusters were rushed to market, compounds with a less promising commercial opportunity were pushed aside, dropped or underfunded. Many drugs ended their period of intellectual property protection without ever having been delivered to the people who needed them. Without a protected drug going to market supported by the necessary budget to advertise and educate, there is the further danger that such a drug will also make an unattractive generic offering.

In 1994 a DuPont-Merck pharmaceutical joint venture formed to relook at the nonblockbuster orphaned drugs; drugs that most would consider second-tier opportunities. A review of their portfolio found that one of their compounds had a popular, off-prescription use in parts of Europe. That use was as a treatment for alcohol dependence. Early, but limited studies proved quite promising. Unfortunately, Naltrexone was outside of an already extended protection period.¹ For legal, regulatory, and financial reasons, their analysis suggested that to break even, Naltrexone would need to launch with a new claim within 18 months, and in at least 5 major markets—a nearly impossible task. But at the same time, there was clear market demand, external pressure, and a sense that this was what the venture team was supposed to be doing—giving practitioners an additional tool in their fight against disease. In this case, that meant making Naltrexone available to practitioners supporting alcoholism recovery, and globally if possible. The challenge was to find ways to avoid the years it would usually take to successfully market and sell a new pharmaceutical product. If they could pull it off, they could possibly create a win for potential patients and the company alike.

A project management powerhouse, Lou Mulliken, was put in charge. He began by interviewing team members with past successes in drug research, looking for best practices and advice in rapid time-to-market. Lou chose to take the advice on who should be involved and what skill sets were needed, and ignore the advice on how many should be involved. This led to the development of an oversized core team of DuPont-Merck employees and beyond. The team grew to include professionals in every avenue of the launch process who were willing to lend a hand. Lobbyists, lawyers, rehab specialists, doctors, FDA officials, consultants, marketing personnel, operations, packaging, and technical experts from five different countries inside and outside of the organization were recruited. A chartering and action-planning meeting was called that was more like a small conference than a core team meeting. The conference was held on a tight exploratory budget. Many attendees were asked to join using their own budget and time because, “it was the right thing to do.” Few turned down the invitation.

It was clear from the beginning that success would require a reinvention of the pharmaceutical Discovery, Development, and Distribution process. The quickly thrown together parallel work session focused almost exclusively on “why this Naltrexone effort was probably a fool's journey, but that it would be a shame not to at least try.” First, an exhaustive list of problems was created. There wasn't much on the “pro” side of the equation: “We have a compelling need and a significantly better technology that meets that need.” On the “con” side there was a laundry list of issues, obstacles, and unknowns. In the subsequent days, each issue was challenged with the full group, subteams, or just individuals working alone, but in parallel. The intense parallel co-located work allowed for rapid progress. A wide variety of process and ideation techniques were used. Over a period of days every objection the team could imagine was brought forward and challenged.

The option to walk away from the project was always on the table. Perhaps it was counterintuitive, but the constant specter of failure helped to drive the team to suggest, if not the impossible, certainly the improbable and nontraditional approaches to problem resolution. The problems and obstacles that would hinder any normal product launch were challenged and converted into a very basic no-frills action plan. One of the groups' conclusions was that to succeed, many teams would have to work independently. For unrelated teams to succeed independently, the leadership needed to provide simplicity and clear direction. This meant rejecting many good ideas in favor of those that could yield a record time to launch.

No further full group meetings were held. The rest of the project was a project management whirlwind, constantly referencing back to the single planning session. Within 11 months Naltrexone, renamed ReVia^®, was successfully introduced to five major markets opening up its rapid approval in the rest of the world. Dr. Joseph Volpicelli, of the University of Pennsylvania, an original extended team member and customer, came in with low expectations and was surprised by the result. He said, “We were in danger of losing an important tool. We now have a novel medical approach available that significantly increases abstinence rates.”

ReVia^® launched on January 7, 1995. Initial financial estimates were exceeded for two primary reasons: first because of a reduced time to market—11 months instead of the projected 18—and second, because of increasing the protected time by another 7 years. ReVia^® was eventually sold to Teva Pharmaceuticals and is still being prescribed.

Advice and Pitfalls

• Stand on a burning platform and declare imminent failure. Innovators hate to see wasteful failure: squandering a good technology that is clearly paired with a compelling need.
• Don't be inhibited by tradition. The right number of people on a core team is driven by the size necessity of the challenge, not by what is most comfortable for a process manager.
• Have a fixed deadline, with no possibility of flexibility. The DuPont-Merck team knew they had to do 3 to 5 years of work in 18 months or fail. They did it in 11 months.
• Combine stable, known, simple structures (packaging) with leaps of faith (a knowledge leader saying: “I think I can get this through the FDA process”). The team resisted any change to formulation or packaging in order to focus on global market, and legal and regulatory issues.
• Put the owners of the major problem areas on the team. In this case, legal and regulatory personnel worked side-by-side with customers (doctors, clinicians, and law enforcement personnel).

Stage 3: Building a Collaboration to Help Understand the Kitchen of the Future

It was the mid-1990s and Americans were cooking less, eating out more, and yet spending more on remodeling their kitchens. This was an oxymoron of the first order for Georgette McAuley, R&D Director at Lipton, a Unilever Company. Unilever had capitalized on the post–WWII change in the American consumer caused by the maturation of the automobile and the resulting innovation impact wave, suburbanization. Specifically, with products like Lipton's Cup-a-Soup^®, a product designed to follow America's hot tea drinkers (women) into the workplace of the 1960s. As the economic clout of women grew, so did control of how that money was spent. A showpiece kitchen designed more for the social advantage of food as entertainment and less for food production, was one outcome.

In an effort to understand the changing nature of the kitchen for the American family, Georgette initiated a conversation with Black & Decker (appliances), and later added Armstrong Building Products and Reynolds Metals (food, food preparation, storage, and environment) to the discussion. Each company represented a significant and noncompeting brand. The process was simple and focused:

• Nondisclosure and intellectual property agreements with partners were executed as they were recruited
• Formation of four cross-functional, cross-company teams, each with five or six team members and a team leader
• A planning committee consisting of the four team leaders and an external facilitator
• An information exchange and ideation event
• Parallel, but independent portfolio building
• Ongoing research sharing
• Sunset: An agreed-to end point

Far and away the most complex component of the work was the partner recruitment. Lipton worked out a legal and nondisclosure agreement between Black & Decker and Unilever that covered a one-year period. Other partners accepted the agreement as presented or chose not to participate. There was no lack of potential partners with interest in the problem. But finding partners willing to be experimental, partners willing to share their closely held information, and partners who were not at that moment overwhelmed by other endeavors was a challenge. For example, a telecom company had been prepared to join until a last-minute reorganization caused them to back away.

The planning team met, designed and prepared for a single convergence event. The process they chose had four parts:

1. Information exchange: Each team brought market and capabilities information to share with the full group.
2. Synthesis of learning: The different points of view about the market were discussed and merged into themes (scenarios); these themes were presented as problems that could or would need to be solved. (See Figure 9.1 and Table 2.)
3. Group ideation targeting the identified problems: Many ideas were out of the scope of any of the organizations present. Many of the ideas had value to just one team; a few of the ideas used capabilities from multiple organizations.
4. A four-tier decision support process:
   • Full group nomination of leading ideas (no preset criteria)
   • Company team proprietary evaluation of ideas based on company-specific criteria
   • Portfolio development: Sorting the ideas that should move further from those that should not be pursued at this time.
   • Collaborative discussion: Interesting ideas that had the potential to cross company boundaries sparked cross-company conversation.

Figure 9.1: Quick Scenario Illustrations Based on the Sharing of Information and Experience Across the Companies

Table 9.2 Scenario Grid Based on Cross-Company Sharing of Market Information and Experience.

Component	1980	1990	2000	2010
Telecommun-ications	Telephone answering machines help kitchens become the home telecommunications center	PC encourage Hoffice as a digital appliance	Widespread 2-way TV; Electronic shopping, PCs and CDs	Smart packaging, Smart appliances, PCs can control everything
Food and Food Preparation	Fast food explosion Italian is the number 1 ethnic food	Explosion of food malls/courts Next Gen Fast Food (Boston Market); More $ spent on takeout than sit down; More $ spent out of home than in home; Mexican	USDA Food Pyramid starts to really have an impact; Other Latin American and Asian cuisine takes hold	Bioengineered food within reach; Five meals a day becomes the norm. Cooking at home for those who can't afford to eat out; Truly multi-ethnic options
Retailing	Malls Discounters Supermarkets	Outlet Malls and Big Box retailers	Home Shopping Network, Big Box and Catalog	Home shopping network, Specialty outlets and catalog
Home Office		37MM Homes contain persons working in or from home; 1/3rd of US Corporations downsizing	40% of US working in or from home; large scale downsizing continues	50% of US working in or from home

Naeem Malick, the Armstrong team leader reported, “It was an exhausting exercise. We added components to the program as we discovered things about one another. This led to four very long days.” Frequently what was common knowledge to one team and their industry, was new news to another team. This meant that a team's simple capabilities presentation could lead to an exciting and explosively creative conversation . . . sometimes late into the night.

Following scenario building and product ideation, the individual company teams met separately, in separate rooms, to determine what ideas and joint relationships they might like to pursue. The individual companies selected areas for further work. Notes and emissaries were sent from room-to-room if there was a partner with whom they wanted to work. “It was fun,” reported one of the process managers, “Every now and then there would be a knock at our door or a note would slide in, ‘would your team like to talk to our team about…'” Eleven separate cross-company conversations emerged. During the following year, full group reunion meetings were hosted by individual companies to share what they were learning and to explore further collaborative opportunities.

Georgette reports, “I can't be specific about a product idea that came out of the session, but now, 20 years later, I remember that Armstrong had a color expert give us a presentation on color and color trends. As a food scientist, this was a totally new concept for me. The insight on color has become an important part of my perception of the kitchen.” John Shiffer, a Reynolds marketing professional and trained anthropologist reported that, “Noncompeting partners interested in the same space gave us a new way to look at our consumer and their context. This added new insight for our business.” John suggests that others think of this type of exploration as being closer to scientific “research” than to engineering and marketing “development.”

Advice and Pitfalls

• Establish a core relationship, legal and process agreement with a primary partner and with a defined time limit (a project charter). Then reach out and involve others and get them to sign on to the existing charter and legal arrangements.
• Apply all of the standard rules for selecting team members: diversity, openness, curiosity, and a willingness to share and listen in appropriate proportions. A balance of different disciplines is important as well as a team that has the seniority to commit to a further conversation.
• Openness will add value to the conversation, but you need not share everything. It's called “open” innovation for a reason. Your team will have questions about what they can share and how candid they can be. Ensure that the internal team conversation is held before the team leaves home base. (Involve executives and legal advisors for full agreement on what can or cannot be shared before the opportunity for exchange takes place.)
• Over-recruit: A reorganization or leadership change can redirect any team at any time. It is unlikely that five teams from multiple organizations will be stable for the entire three or four months of a process.
• Add value with appropriate cameo participation. Not everyone need be a full participant. As Georgette McAuley pointed out, the Armstrong color expert provided value even though the expert was only there for a short time.

Stage 4: Chartering a Bridge to “Coopertition” Between Finance Giants

Innovation itself is not the only source of impact waves. For example, regulatory change can create innovation impact waves. An overt result of what was called the “Reagan Revolution” was the Garn-St. Germain Act of 1982. This was a major deregulatory step that significantly opened the door for many financial institutions to cross traditional boundaries.2 National Liberty Life Insurance Company of America (NLC), with its headquarters in the Greater Philadelphia area, and The Credit Union Mutual Insurance Company (CUNA Mutual), headquartered in Madison, Wisconsin, began a joint venture to co-develop and market insurance products through credit unions in the midst of this turbulent environment. The agreement was entered into at the highest levels of both organizations. This case discusses the primary problem encountered between the point of high-level agreement and the work of product development.

Several years into the co-development agreement they had made some progress in cross-marketing, but no significant progress in leveraging the strengths of both to co-develop the product. So they met. They talked. They even spent a week in a team-building program. Their conclusions were that they fundamentally did not speak the same language, and that their working styles and requirements were so different that they tended to derail every effort. Regardless of what the leadership of the two organizations felt, the team members felt competitive.

Clearly frustrated with the lack of progress, two senior marketers decided to try one more time and embarked on a hyperstructured, clearly defined process with all critical parties involved in a chartering and ideation process. All previous work was scrapped, and they started with a clean sheet of paper. The process involved a quick audit by an independent moderator to confirm and clarify objectives and goals. The audit helped to eliminate unnecessary baggage, to abolish a criterion that the product needed to use the existing resources from the partner companies, and to create focus on a simple set of criteria:

• Meaningfulness to the customer
• Differentiation in the market
• Fits the strategic objectives of the partnership

These criteria were the critical cornerstone to building an achievable charter. Other important components of the charter were a carefully laid out process, a clear decision-making agreement that included the elimination of a number of decision makers, and the recruiting of new team members. Some of these were not only new to the team, but new to the company and the industry.³

The next step was to take over two dozen key stakeholders through a three-day ideation and planning process. Every detail of the process was reviewed and approved by both sides prior to the session. After substantial challenge, agreement on process was eventually achieved. In those three days, ideas and concepts were developed and illustrated to form a product portfolio with action teams assigned to each concept. Then, the portfolio was converted into a product development roadmap. Each concept that was to move forward was given a mini-charter that was approved by the relevant parties on the third day of the session. An action team was a dyad—one team member from each company. The action teams left the meeting with all of the approvals they required to go from concept to test market. Only the two team leaders working together could slow down or kill a project.

Carol Myers, Vice President of Partner Marketing at National Liberty said, “Highly structured innovation was the answer to a problem that had lasted years. When we committed to the process, we got our answers fast.” The structured process finally allowed for real team-building through shared accomplishment and for jointly owning ideas. Within six months of creating the New Product Concept Roadmap, the joint venture launched a successful new “living benefit” product—Acorn^®. Janice Schlimgen, Vice President at CUNA Mutual, commented, “Our success is big news around the company.” The shared achievement of an actual new product launch broke the ice and cemented the two companies' relationship, led to the extension of the co-development agreement, and resulted in the successful co-development of other new products and services.

Advice and Pitfalls

• Build teams through shared accomplishment. The real cure for a cultural barrier is market success. Even early failure and a positive learning experience can be a positive team shared accomplishment.
• Do not dismiss input from less experienced team members. Consider new team members or team members from areas of the organization not traditionally associated with product innovation when you need fresh eyes.
• Focus on the end goal and not on the individual success criteria. Criteria can kill. Too many criteria divert attention away from what is really important during the early stages.
• Focus on the customer to create a path to collaboration. Working solely for the customer can eliminate organizational confusion.
• Leverage your agreed-to process, or highly structured approach, to yield surprisingly creative results. Structure can actually free the creative mind. Lack of structure can allow for a strong-willed participant to derail progress.
• Loosen and flex the structure once a highly structured approach has proven that success is possible.

Stage 5: Shared Discovery as a Tool to Forecast and Encourage Technology Development—Moldless Forming

Imagine throwing multiple stones into a pond simultaneously. The result is a ripple pattern that is more complex and with higher peaks and deeper troughs. In 1992, innovation impact waves from software, computer hardware, machining technology, and materials science were converging. The promise of Moldless Forming (Moldless forming is now often referred to as 3D printing.) had seemed like part of science fiction up to this point. Tri-laser lithography had just started to make a place for itself outside of the lab. Alternative and broadly disparate technologies were emerging on the horizon. There was a hope that within 20 years, Moldless Forming could seriously enter the mainstream of manufacturing methods. Still, the concept was poorly defined and the knowledge needed was in widely separated fields.

However, Peter Hilton, Director of Advanced Materials Processing for the Arthur D. Little Company, felt that a technology development roadmap was possible and, if broadly shared by different R&D organizations, the time to harvest this potentially valuable tool could be shortened. This simple thought became the guiding principle for an Open Innovation technology mapping project.

Peter organized an “Emerging Technology Workshop.” He selected participants from among those who appeared to be potential stakeholders in the technologies being discussed, and who had a professed interest in developing the associated technologies. While the overall discussion was technical in nature, participating organizations were encouraged to provide group members who were willing to discuss topics beyond just technology and also get into social, policy, and economic impacts.

In addition to Arthur D. Little and the non-ADL workshop facilitators, a number of organizations provided teams: The Alcoa Technical Center, The Ford Motor Company, The General Electric Research and Development Center, The Massachusetts Institute of Technology, The G.E. Plastics Technology Group, 3M Systems Engineering Systems and Technology, Monsanto, The Sandia National Laboratories, The Wright Laboratories—the United States Air Force, Aeroquip Corporation, The Asea Brown Boveri Company, The National Institute of Standards & Technology, and Ampersand Ventures. It was critical to pull together the right knowledge and the right organizational credentials, and for everyone to participate in an exploratory conversation.

The output of the exploratory workshop took several forms. Each participant was to leave with their own special point of view informed by discussion with others, to be applied as they felt appropriate. ADL provided a status report on the technology: Moldless Forming: An Advanced Manufacturing Process (Arthur D. Little, 1992), for distribution to all participants and for each participant to redistribute as they saw fit.

The workshop process was one in which the ADL team presented a series of three technology scenarios. Each short scenario presentation was followed by broad-spectrum ideation (product ideas, business implications, opportunities, and relevant issues for resolution). Example ideas from one scenario can be seen in Figures 9.2a and 9.2b.

Figure 9.2a: A Small Sample of the Set of Simple Scenarios Prepared by the Organizing Team—Imagined Timeline

Figure 9.2b: A Small Sample of the Set of Simple Scenarios Prepared by the Organizing Team—Matrix Approach

After general discussion, the group was broken into three company teams with the instruction to build a story about the company. What would they need to be like in the year 2010, and what would they need to be successful? Breakout teams were formed around the companies inside each scenario. For example, one team might form around required software development while another team might focus on legal and regulatory issues that could emerge. Each team delivered a short 2010 report that included:

• Things that would be different in 2010 if this scenario was to come to fruition
• A list of 5 to 10 changes along a timeline between 1992 and 2010
• A list of things that existed in 1992 that would not need to exist in 2010
• A discussion of the desirability of the scenario
• Spin-off opportunities and issues outside of materials processing

Further full group discussion followed each short report.

Working through all three scenarios in this way, a final session was held to draw 20-year pathways with marked milestones. Some milestones were supported by well-understood patterns in development (like Moore's Law), while others were “we will need this kind of discovery in this time frame.”

All participants received detailed session notes as well as the resulting report (Greenwald et al., 1992). It was clear at the outset that all discussions were to be public domain, and that all work-product belonged to all participants equally for use or distribution as they saw fit. For example, the Sandia National Laboratories distributed the report as necessary to use for long-term planning and budgeting. But as one facilitator pointed out, “There was a real sense of shared discovery and pleasure in that discovery among team members. There was reluctance to draw the workshop to a close and return to the day-to-day focus.”

Advice and Pitfalls

• Think far enough into the future so that individual teams that are potentially competitive will feel sufficient abstraction. ADL put a stake in the ground that was out nearly 20 years. Every time they got close to current research, the conversation shut down.
• Form a clear knowledge policy. In the Moldless Forming case, no closely held information was to be shared. No agreements were to be signed. All conversations were to be considered public domain. Make such a policy explicit.
• Value comes from pursuing ideas not from the ideas themselves. Ideas are not realities. The key learning came from how to get to the example idea, and planning what would need to be done to get there. The product ideas themselves had limited value.
• Respect the input and interaction from all disciplines. Every discipline can have an impact on every other discipline. Technology does not form in a vacuum, nor does a business model shift occur without sufficient reason. Allow space for a dialogue across broad categories of thought.
• Allow sufficient slack in the process for shared discovery to take place as the team is forming. Don't allow the tyranny of the lunch bell to drive the process. Process serves the content of the discussion.
• Make participation the reward, and make it rewarding. Being invited to participate should be perceived as an honor. Participants and participating organizations are rewarded with new understanding and new relationships.

Stage 6: Collaborative and Independent Action in Diabetes Care—Project IMPACT

An unintended consequence of processed food and increased leisure can be diabetes. The diabetes that now threatens to afflict 70 million Americans is an innovation impact wave. The trends are clear and the predictions of even the optimists are frightening. The problem of diabetes is bigger than can be solved by any one organization. Diabetes has many treatments, and social factors are poorly defined. In short, it is a perfect setup for Open Innovation.

Figure 9.3:: Project IMPACT

Reprinted with permission from APhA Foundation

Ben Bluml is Senior Vice President of Research and Innovation at the American Pharmacists Association Foundation. Earlier than most, Ben saw the diabetes wave rising and understood the overwhelming consequences. For essentially his whole career, Ben believed that diabetes threatened to wipe out a generation of health and wellness gains in America. He felt that pharmacists, his colleagues, could be important players in the fight to help people become more effective self-managers of diabetes. He deeply believed that the 320,000 pharmacists in America could tip the scale in the battle against diabetes. He also believed that participating in the fight to manage diabetes could enhance the careers and opportunities for the pharmacist.

What follows is the story of an iterative service development process. It is a story about creating successive collaborative efforts on four levels. The result is new or enhanced service, from many to many, in a distributed noncentralized manner.

The first level was a small experiment, or test project, in Asheville, North Carolina that became known as The Asheville Project^®. It began in 1996 as an effort by the city, as a self-insured employer, to provide education and personal oversight for employees with chronic health problems such as diabetes, asthma, hypertension, and high cholesterol. City employees with these conditions were provided with intensive education and were then teamed with community pharmacists. Participating pharmacists were encouraged to develop patient care services. With unexpected speed, participating employees, retirees, and dependents with diabetes began experiencing improved A1C levels, lower total healthcare costs, and fewer sick days. Unlike other experiments, the Asheville model was payer-driven, patient-centered, and used the pharmacist as a counselor. The pharmacist-as-counselor was the fundamental new service development to emerge. As a self-insured employer, the city could carefully track the financials and career performance factors of those in the program.

At the second level, counselor training and a structured counseling program with implementation and funding support, were added for pharmacists. The Diabetes Ten City Challenge (DTCC), sponsored by the APhA Foundation with financial support from GlaxoSmithKline, ran from 2005–2009. Thirty self-insured employers in 10 cities provided employees, dependents, and retirees afflicted by diabetes a voluntary health benefit, waived co-pays for diabetes medications and supplies, and helped people manage their diabetes on a day-to-day basis with the help of hundreds of specially trained pharmacist “coaches.” Each program was still remarkably independent, leading to substantial experimentation.

A report published in the May/June 2009 issue of the Journal of the American Pharmacists Association4 (JAPhA) documented favorable economic and clinical results for both employers and participants. Employers realized an average annual savings of almost $1100 in total healthcare costs per patient, when compared to projected costs if the DTCC had not been implemented. Individuals who participated also saved an average of almost $600 per year.

Participants improved in all of the recognized standards for diabetes care, including decreases in A1C, LDL cholesterol, and blood pressure; and increases in current flu vaccinations and foot and eye exams. Ben Bluml, with the support of an experienced NPD ethnographer, Cynthia Daub, went into the field for a deep-dive qualitative best practices review. The ethnography was conducted to help understand which practices were leading to the greatest level of success within the program and to provide an insider's view of the program for those involved in Level 3. At Level 2, over 35 different organizations were involved.

The third level leverages the learning in the first two levels, adds a focus on hard-to-manage populations, and explores the potential implications of sustaining patient gain and ultimately scaling the program. If the program is to survive scaling, it must become self-funding, and that almost certainly means that pharmacist counselors must become a reimbursable part of the care team. Level 3, Project IMPACT: Diabetes, IMProving America's Communities Together (IMPACT)⁵, was a national initiative with 25 communities, which aimed at improving care for patients with diabetes through community-based interdisciplinary teams that include pharmacists in underserved and highly affected populations. The qualitative research from the Ten City Challenge was critical to attracting funding and sponsorship. Ben Bluml suggests that, “The funding community, whether foundations or governmental, are hungry for the unvarnished truth. The numbers are important, but the video from ethnography provides that truth.”

In Project IMPACT, qualitative and quantitative pre- and postresearch was conducted. At Level 3, they were interested in more than just overall best practices; the effort was targeted at gaining a deeper understanding of how the treatment program might impact a broad variety of patient groups and provide specific guidance in these cases. Ethnographic knowledge was collected into a video archive that was organized to be researched and broadly shared. This knowledge-sharing approach allowed organizations to independently draw conclusions about practices that might work for them and share these practices across organizations.

Again, the results, both qualitative and quantitative, were positive. Even hard-to-manage populations, such as Native Americans and migrant workers, had improved A1C and LDL scores and demonstrated both stronger compliance and persistence if they were assigned a care team with a pharmacist coach.

The fourth level is sustaining and scaling. At this writing, the team is working on ideas for implementation. Critical to success is expanding the open innovation circle. The initial hope is that each of the 25 communities will find the local support necessary to spread the program to other centers in their region.

Critical to scaling, the APhA Foundation approach is providing a guide, coaching, training, and collaborative support while encouraging creative implementation among the diverse participating organizations. Table 9.3 summarizes this perspective.

Table 9.3 The Growing Circles of Open Innovation

	Level 1:	Level 2:	Level 3:	Level 4:
	The Asheville Project; an early experiment with	The 10 City Challenge; Counselor training	Project IMPACT; Leverage the learning in	Scaling and Sustaining; Introduce the and populations
Service Development Stage	Discovery & Definition	Design	Development	Delivery
Sponsor	City of Asheville with Publication Support from APhA Foundation	APhA Foundation with Advisory Committee	APhA Foundation with advisory council and community champion support	TBD
Funding	APhA Foundation	GlaxoSmithKline	Bristol-Myers Squibb Foundation	TBD
Delivery	One self-insured city and 6+ pharmacists	Ten cities with over 30 employers and 50+ pharmacists	25 community centers that provide care, 80+ pharmacists	TBD
Patients and Families Served	136	573	2000+	TBD

Advice and Pitfalls

• Don't walk alone. If you are working on a big problem, a problem worth solving, figure how to share. There is probably enough credit for everybody.
• Continue to learn and modify the core offering throughout the delivery process. Discovery does not end at the beta test. A service can be designed in a fluid manner that allows new practice(s) to emerge and to be adopted by others.
• Think global; act local. If the local practitioner (in this case the individual pharmacist) does not drive the project and make it their own, it will not succeed. No matter how good the national standard is, it will not overcome uninspired, inflexible local delivery.
• Communicate a good and compelling story in addition to the data. Even the tough-minded funding and legislative actuaries need the good, compelling story. That story can only come from ethnographic research methods. They also must have the quantitative data that make the financial story add up.

9.3 Conclusion

Confront the extraordinary challenge. The singular message from this collection of stories should be that we should not fear going after the really big problems of our time that are worth solving. As Merle Crawford, the Founder of PDMA said, “There is no problem that we face as a species that cannot be improved by the application of New Product Development Processes.”

A significant product development success implies taking on a significant challenge. In many cases the really big problems of our time dwarf the resources of any one organization. In these cases, the innovator should consider collaboration among organizations. The “Big Hairy Audacious Goal” (BHAG) was proposed by James Collins and Jerry Porras in their 1994 book, Built to Last: Successful Habits of Visionary Companies, but was an internally focused tool to help catalyze a company around a visionary charter that is at once both strategic and emotionally compelling. This chapter has told the story of a number of innovators who stepped outside of their ordinary and expected boundaries to achieve an extraordinary result. Companies, affiliations among colleagues, or formal Associations, have a special opportunity to form collaborations and a special set of problems when they do.

Considerations

• Identify a Champion. A knowledgeable, well-respected champion at the top of his or her profession is not assigned; they are the initiators.
• Diagnosis and Design. Stand on a burning platform and declare probable failure. Innovators hate to see wasteful failure—the squandering of a good technology that is clearly paired with a compelling need.
• Build the Collaborative. Establish a core legal relationship, and process agreement with a primary partner and with a defined time limit (a project charter). Then reach out and involve others, and get them to sign on to the existing charter and legal arrangements.
• The Charter. An agreed-to agenda, and possibly a structured process, can yield surprisingly creative results. Structure can free the creative mind. Process supports the overall objective and is not likely to be repeated, and therefore can be more flexible.
• Shared Discovery. Think far enough into the future so that individual teams who are potentially competitive will feel sufficient abstraction. Old news to one team may be a radical point of view in a nearby industry.
• Collaboratively Independent Action. Don't walk alone. If you are working on a really big problem, a problem worth solving, figure how to share. Your challenge is about how to grow the pie, not what percentage is yours. There is probably enough credit for everybody.

These stages are suggested options but should not limit the creativity of the innovator. Process serves content, in these cases most especially. These are one-off processes, never to be repeated. Without a tested process an experienced innovation professional is extraordinarily valuable. That experience can also be an inhibitor to the flexibility you will need when sailing these unchartered waters.

Every innovation creates impact waves. The greater the level of economic and social impact the greater the waves. Some waves, like diabetes or medical waste, can seem like a tsunami. Some impact waves are positive; others are not. Open Innovation, and openness to innovation, can present an opportunity for resolution to some of these innovation-inflicted wounds. The author has tried to put a variety of cases in front of the reader in something of an organized form. Some of them represent challenging the giant problems of our time. Others represent a simple curiosity, such as “what could the kitchen of the future be like?” Still others are the sensible collaboration of large organizations that could teach us something like, “we should be able to figure out a way of working together.” The hope expressed in this chapter is that more of us will aspire to take on the really big problems of our time. Open Innovation can be the enabling process. Big success can emerge from taking the audacious challenge.

References

1. Crawford, C., and C. Anthony DiBenedetto, 2000, New Products Management, Homewood, IL: Irwin/McGraw-Hill.
2. Collins, J., and J. Porras, 1994, Built to Last: Successful Habits of Visionary Companies, Harper Business Essentials.
3. Fera, T. BPharm, PharmD; Benjamin M. Bluml, BPharm; William M. Ellis, BPharm, MS; 2009, Diabetes Ten City Challenge: Final Clinical and Economic Results. Journal of the American Pharmacists Association Foundation, 49: 383–391.  
4. Greenwald, C. Gail, S. Auerbach, P. Breardmore, T. Cox, T. W. Eager, L. R. Hepp, R. Nelson, G. Rawlings, H. Schmitt, L. Semiatin, E. T. Smith, L. Sweet, H. T. Yolken, R. Crooker, P. Hilton, P. Kopf, W. D. Lee, J. O'Brien, M. Rona, S. Roudolph, C. W. Miller, K.L. Miller, and M. B. Neblett (Arthur D. Little Emerging Technologies staff and conference participants), 1992, Moldless Forming: An Advanced Manufacturing Process, Executive Summary, Boston: The Arthur D. Little Company.
5. Katzenbach, J. R., and K. S. Smith,1993, The Wisdom of Teams, Boston: Harvard Business School Press.
6. Miller, Christopher W., 2002, “Hunting for Hunting Grounds: Forecasting at the Fuzzy Front End,” Chapter 2, PDMA Toolbook 1, Paul Belliveau, Abbie Griffin, and Stephen Somermeyer (eds.). pp. 37–62, Hoboken, NJ: John Wiley & Sons, Inc.
7. Reinertsen, D.G., and Preston G. Smith, 1991, The strategist's role in shortening product development, The Journal of Business Strategy 12, 4: pp.18–23.
8. Stilwell, E. Joseph, R. Clair Canty, Peter W. Kopf, and Anthony M. Montrone, 1991, Packaging for the Environment: A Partnership for Progress, Chicago, IL: AMACOM Books.
9. Wyman, Carolyn., 2004, Better than Homemade: The Amazing Foods that Changed the Way We Eat, Philadelphia, PA: Quirk Books.

About the Contributor

• Chris Miller is Founder of Innovation Focus and is a high-energy facilitator and speaker in service to inspire deep understanding and meaningful innovation. Chris was President of the Product Development and Management Association in 2004.  He received his PhD in Psychology from Case Western Reserve University.  His doctoral research targeted the life-long career development of engineers.  He has over 25 years of experience in facilitating, consulting, and exciting interdisciplinary high-performance teams on product development, customer interaction, and rapid project completion.  He is an Ernst & Young “Entrepreneur of the Year” Award winner for his role in initiating business ventures in consumer electronics, publishing, and consulting services.

Note

1 Merck had been able to get Orphan status for Naltrexone for the treatment of heroin addiction in 1984, one year after the legislation creating the orphan designation came into existence. This got them seven years of additional market exclusivity and shows that they were looking for alternative uses in smaller populations. It was one of the earlier drugs to get that designation.

² The Garn-St. Germain Act of 1982 was intended to allow certain financial firms to enter into new financial territory. The primary driver of this was a consistent pattern for the traditional savings and loans to become less competitive (their business model had fully matured). Unfortunately in opening the door to new opportunity, new risks were also present for which these previously sheltered businesses were not prepared. The Garn-St. Germain Act was partly to blame for the Savings and Loan insolvency crisis of the 1980s.

³ For further information on the important issues of charters and teams, you are directed to two classics: Crawford and DiBenedetto (2000) and Katzenbach and Smith (1993).

⁴ www.diabetestencitychallenge.com/pdf/dtccfinalreport.pdf

⁵ Project IMPACT is funded by the Bristol Myers Squibb Foundation via a Together on Diabetes grant to the APhA Foundation. The APhA Foundation, in turn, was able to provide grants to 25 communities, support the program nationally, and continue the best practices research.