Why Open Organisations will Win

Openness

People respond well to openness. We warm to others who are open-hearted and open-minded. They seem to generate an aura of trust with nothing to hide and an inquisitive and positive attitude.

Trust

Can we say the same of organisations? Many are hard to approach, defensive and highly selective about what they reveal. Many people would say that their experience of organisations is anything but open. Perhaps related, we do know that the level of trust in companies and state institutions is in long-term decline and that is bad for business and bad for society. So are there any organisations that are bucking this trend?

Disruption

In fact the world of business is undergoing a profound change. Driven by social media and the development of the web, old secretive and closed cultures are giving way to more open engagement and collaborative innovation. Organisations as diverse as Lego, Ford and GSK are opening up to consumers becoming more accepting of ideas and innovations from outside. This is important because the old order of business is rapidly becoming disrupted. In an age where a seven year-old cab company (Uber) has a greater market capitalisation than automotive giants Ford and GM, organisations need to change before they become disrupted from outside.

Becoming an open organisation often starts from the inside. 100%Open worked with Oxfam, using an internal crowd-sourcing platform called Oxfam Ovation to engage staff in a global efficiency drive. This sourced 100 new cost-saving ideas without the cultural disruption and suspicion that change programmes often create.

Give|Get

Organisational growth, differentiation and survival no longer come from the ability to recruit and align employees around executing a well-understood and incrementally changing set of processes. In nearly every sector of the economy— including health care, defence, consumer goods, education, charities, telecoms, media and finance— the ability to rapidly adapt to disruptive trends, and to co-ordinate across internal and external boundaries, are becoming the most critical organisational capabilities. This is easier said than done, but this is in effect a call for greater and deeper partnerships and blurred or porous boundaries.

Culturally this means letting go of control and making generous offers to the outside world in the hope of receiving equally generous responses – 100%Open’s Give|Get philosophy. The ability to achieve and maintain world-class performance depends on the ability to successfully build win-win partnerships. These partnerships can be with consumers as well as other companies. The agency worked with Lego to build a strategy to co-create new products with its customers that had been implemented across the business, notably via LEGO Ideas, now the world’s largest crowdsourcing platform with 1 million members.

Open Organisation Test

As this fundamental shift gathers pace, questions about “why should we change” are giving way to questions of “how can we change”.  The Open Organisation Test is a new tool designed for making this transition. This tool creates ratings for 40 different dimensions in order to help prioritise process, personal and cultural development for successful opening up. Does an organisation have the right Policies, Processes and Partnership approach? How about its Purpose, People or Platforms? Do its collaborations have sufficient Pace and Profitability for all partners to benefit?

Almost 500 tests have been taken so far across 50 organisations from Arup to Unilever. So far, these are the headlines:

How ready is your organisation for open innovation?

Totally ready                      21%

Nearly ready                      59%

Work to do                         17%

A lot of work to do               3%

This is a very positive picture with the aggregated score of the majority of organisations nearly or totally ready. Of course the sorts of companies that have visited the 100%Open site are predisposed to an open strategy, so perhaps the real picture is less rosy. Across the 8 ‘P’ categories of openness, a varied emerges. On average companies rate their People and their Platforms quite high. Employees are good connectors, well-networked and believe in external ideas. Organisations tend to have the right spaces and tools to share knowledge and test ideas. However ratings for Processes and Purpose are lower.

This suggests that organisations find creating the right procedures and resources hard and aren’t good at flexibly engaging externally or sharing information. Furthermore, they find it hard to communicate clear innovation briefs and make the right collaborative innovation choices.  100%Open found such an insight with UK Government client Dstl. The Open Organisation Test helped diagnose its specific barriers to open innovation. This has resulted in a major new initiative to create a defence and security open innovation network, promoting UK growth via innovative SMEs and Universities.

One concluding observation is about the Pace of innovation that organisations are reporting. The more open they are, the faster they innovate and evolve. They have what it takes to be responsive collaborators, they can prototype and iterate fast and provide easy access to the right people and facilities. In a business world where speed is becoming increasingly relevant, this is important. In fact the key promise of open innovation is that it gets you better innovation faster and cheaper. From the Open Organisation Test data, this seems to be coming true.

Thanks for reading.  If you’re interested in taking the Open Organisation Test please check it out here.  And let us know how you find it.

(reproduced from a blog for The Crowd here)