The last ten years have seen the growing adoption of novel innovation approaches. Among them, open innovation has become particularly popular, with key stakeholders placing great hopes in this method. But has it really fulfilled all its promises? It’s time to take stock of the impact of open innovation and its value for the future of the innovation ecosystem.

Christophe Lienard, Head of Innovation of the Bouygues Group, and Antoine Baschiera, co-founder and CEO of Early Metrics, recently shared their views on the outcomes of the last six years of open innovation. Keep reading to find out the key highlights from their discussions.

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Promise n.1: Open innovation will be a quicker and cheaper way to innovate

Cheaper? Yes, without a doubt, said Antoine Baschiera. Early Metrics’ corporate clients have shared throughout the years that they were able to test new products with much lower budgets thanks to open innovation. Christophe Lienard added that indeed, Bouygues’ open innovation programmes are generally not capital intensive, but moving to the deployment phase demands greater budgets.

However, according to Baschiera, open innovation has been a letdown from a speed perspective. In fact, it can sometimes be slower than traditional innovation projects that are led internally. That is sometimes due to the startup’s ability to launch and scale the production process at speed, since they have limited resources. The speed can sometimes also be impeded by a slow adoption rate within the large company.

Christophe Lienard, Head of Innovation of the Bouygues Group, explained:

“It’s undeniable that open innovation allowed us to speed up the initial stages of innovation, especially ideation. However, we often oversold the speed of open innovation which led to operational stakeholders feeling frustrated, as it still took a relatively long time.”

He added that this could be particularly disappointing when projects ran over their initial budgeted time of 3, 6 or 12 months. Lienard points out that there is a difference of time between software-based innovation projects and hardware ones.

Among the ways to optimise the duration of open innovation projects, Baschiera pointed out, seems to be to favour partnerships with startups that have a certain maturity and/ or have reached specific milestones (e.g. raised a Series A). For Bouygues, it’s a balancing act between working with very early stage companies that have their finger on the pulse of tech trends and working with more mature ventures that can deliver faster.

One of the successful outcomes of Bouygues’ programme was Com’in, a solution to manage building site nuisance. After a gestation period of about 2 or 3 years, it is now a real business that has fully deployed its offering. This project proved that open innovation could hold its promise of a relatively cheap and fast method of product development.

Promise n.2: Open innovation will bring deep transformation

Over the course of Early Metrics’ history, we have witnessed concrete success cases when it comes to transformation. For instance, Airbus and Expliseat co-developed a new plane chair that was dramatically lighter. Arkea has also developed several new payment innovations in collaboration with fintech startups.

The main obstacle to bringing transformation remains the challenge to go from a POC to a fully deployed solution. But there’s also a new obstacle on the horizon. Baschiera feels that there is a rift forming between startups that attempt to form scalable business models with one or a few products, and corporations that seek to co-develop increasingly niche and tailored solutions. In this case, Baschiera sees intrapreneurship as a more suitable approach than open innovation. Intrapreneurs can deliver results that are tightly aligned with the corporate’s specificities, without worrying too much about the commercial potential of their solutions.

Indeed, intrapreneurship is playing an increasingly important role in the group’s strategy. Their new programme, Les Entrepreneurs, covers a wide variety of topics and involves about 60 employees from the five key functions of Bouygues’ innovation ecosystem (R&D, open innovation, think tanks and academic partners, intrapreneurship, international watch).

Still, for Lienard, open innovation remains an interesting way for the group to learn about new business models. As he pointed out, today there are about 801 unicorns globally that represent over $2,65 trillion, which is more than France’s GDP. Meanwhile, 4500 startups have raised over $100 million which represents $15 trillion in total valuation, as much as China’s GDP. Lienard stated:

“This is clearly not a trivial matter. We don’t have small startups on one side and large groups on the other. We, as a large company, need to learn from startups what tomorrow’s business models are.”

This implies that open innovation doesn’t necessarily entail co-development. Instead, it can be a source of market intelligence and inspiration for internal strategies or development.

Promise n.3: It will change the way we work

Many of the open innovation directors who collaborate with Early Metrics have confirmed that their projects have progressively improved and modernised their corporate ways of working. They showed that partnering with startups generally has a positive impact on working practices, from project management to experimentation.

It has also created new career opportunities. For instance, there have been cases of first-time entrepreneurs who perhaps didn’t have a huge success with their own startup but found their place as open innovation leaders within large companies. This recruitment trend further contributes to making ways of working evolve and become more agile.

Moreover, open innovation has had an impact on deployment strategies within corporations. Before, IT departments would choose to deploy massive changes in lengthy waves. Nowadays, not only IT and digital teams, but also other functions are increasingly adopting a startup-like strategy involving prototyping and small incremental deployments. This has proven to bring productivity and efficiency gains.

Within Bouygues, more and more business unit leaders have requested guidance from the innovation team on how to restructure their department in an agile way. This is a by-product of the conversations that their innovation teams have had with their partner startups. Lienard explained that this dynamic was greatly boosted by Bouygues’ project WeWood, which aims to enable 30% of new building constructions in wood by 2030 and requires cross-department collaboration.

Promise n.4: Open innovation will be a key communication tool

According to Baschiera, this is a tricky topic as we have seen many large companies speak loudly about open innovation but then come short on concrete outputs. Between 2015 and 2018, we witnessed the launch of many startup contests organised by corporates that didn’t result in any solid commercial action. This lack of concrete success stories may have hurt the brand credibility of these corporations in the eyes of the startup ecosystem.

However, the situation is changing. We are seeing that many large companies who are committed to open innovation communicate less about their larger programmes and instead, do more punctual communication around specific startup partnerships. One positive example is that of TF1’s Media Lab which selects five to six startups per semester to deliver real solutions. According to Lienard, the programme has an excellent conversion rate, showing that open innovation can lead to real business opportunities.

For Bouygues, open innovation is indeed a factor of brand attractiveness, both internally and externally. While Lienard recognises that open innovation leaders need to be cautious to avoid overselling, he does see the value of open innovation for branding.

For instance, through the chair Construction 4.0 in Lille, Bouygues has been able to inspire engineering students by showcasing the application of IoT, AI and other technologies on their building sites. Bouygues also set up a similar chair with the university HEC to involve potential talent early on and raise awareness of the evolving face of construction. Lastly, Bouygues runs the Smart City initiative which has had a positive impact on its branding while delivering leverageable insights for the creation of smart cities in Europe. All in all, Lienard sees innovation as a way to open the door for long term collaborations with a variety of stakeholders, which go beyond the usual commercial scope.

Promise n.5: It will increase corporate resilience

In the early days of the Covid-19 pandemic, most corporations decided to cut budgets for non-core departments, including innovation. Yet, Baschiera noted that after a few months, many corporations decided to put more efforts into open innovation to find solutions to the new challenges brought by the heath crisis.

Baschiera commented:

“It was a nice surprise for us to find out that even large companies that had been heavily impacted by the pandemic, such as large airlines and airports, wanted to pursue open innovation. Our clients, such as Air France and ADP, see the value in continuing their innovation partnerships to better prepare for future crises.”

Hence, for Baschiera it seems that open innovation has kept its promise in terms bringing resilience within large companies.

On Bouygues’ side, Lienard explained that open innovation plays a key role in becoming resilient in the face of another crisis: climate change. He stated: “We are putting all possible resources on our side to be able to reach the milestones we have set ourselves for 2030 and beyond. We were already focusing on climate innovation before the pandemic and those projects were not particularly impacted by Covid-19, perhaps because we already had a good level of resilience.”

Among those projects, Bouygues Energies & Services has gone far with the startup Powidian (in which the group has invested). This collaboration has allowed civil aviation antennas to become energetically autonomous, thanks to a system that turns solar power into hydrogen and then stores it as available electricity.

To sum it up, the last six years has shown that open innovation can definitely deliver great results in terms of resilience and that it can help corporates modernise their ways of working. There have been promising cases of in-depth transformation and meaningful change from it as well. From a communications perspective, corporates have found it sometimes difficult to leverage open innovation but it nonetheless has delivered some positive branding outcomes, especially on specific startup-corporate partnerships. Last but not least, time has shown that open innovation is indeed often cheaper than other types of innovation but beware of its speed, which can be disappointing.