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Change Management and Open Innovation: Know the Pillars of Digital Transformation

To talk about Open Innovation is to refer to profound changes within the organization.

It’s important to have a good Change Management strategy, especially for companies in the process of a digital transformation — which is virtually all of them!

In this article, you’ll see how this as well as open innovation are at the base of Digital Transformation. Keep reading and understand how interconnected they areas well as how they facilitate the efforts of modern companies to be more innovative and harness the advantages of digital technology!

Open Innovation and Change Management: the challenge of change in organizational culture

People are territorial by nature, they protect their homes, work tasks, and relationships. We don’t like others that violate areas we claim as ours.

Companies are organizations formed by people working towards a common goal. As a human enterprise, corporate culture eventually incorporates human traits as well, including the suspicion of outsiders and the fierce protection of their entrenched systems.

With that in mind, how do you open efforts for innovation in order to collaborate with external agents? This is the challenge faced by innovative companies of all sizes and in all segments of the market!

The tipping point is in the culture!

Traditional organizational culture is based on specific beliefs:

  • No one can do this better than we can.
  • Everyone has a position and each needs to stay within their duties.
  • We’ve always done that, so we doubt if we really need to change.
  • “Don’t fix what ain’t broken.”
  • Our processes are secrets to be protected from outsiders.
  • Innovation and market response are important, but it is more important that we control the process.

On the other hand, an Open Innovation culture is based on very different beliefs:

  • We don’t need to give rise to an idea to develop and profit from it.
  • We will capitalize on intellectual resources, regardless of their origins (internal or external).
  • Information must be shared within the organization and with external employees to achieve true innovation.
  • Building a better business model will result in long-term success.
  • External employees create value, and our internal R&D allows us to share this value.
  • Market responsiveness is necessary for survival, and open innovation is the key to this success.

Por outro lado, uma cultura de Inovação Aberta é baseada crenças bem diferentes:

It is clear that the real challenge in implementing successful Open Innovation lies in changing corporate culture.

This process goes beyond the development of new positions. Start by redefining the core values of the organization and developing the culture from that base.

The benefits of these approaches for the company

Open Innovation is inherently a proactive and optimistic strategy. It is an attempt to create a better future using collective skills and creativity, with special actions from agents outside the organization.

On the other hand, the concept of Change Management is an approach used to address the reactive impulse of those involved in a process of change.

Generally speaking, we can define Change Management as:

the strategy that guides how we prepare, equip and support individuals to adopt changes successfully in order to enhance results (in specific projects and/or in the company as a whole).

It is an approach used to facilitate and manage the reorganization of a company in order to respond to an uncertain future by implementing new structures and processes.

Check out below a detailing of the main advantages of each of these approaches!

Benefits of Open Innovation:

  • Reduction in the time and cost of innovation projects.
  • Incorporation of solutions and innovation in the form of ideas, patents, products and technologies that would never have been generated by the company due to lack of time, knowledge and technological resources.
  • Access to markets where partners are most active, and where the company has limited participation.
  • Adaptation of the knowledge base, according to market changes.
  • New commercial opportunities through unexplored internal R&D activities.
  • Commercialization of inventions which, due to lack of capacity or for strategic reasons, cannot be placed on the market by the holding company.

Benefits of change management strategy:

  • Reduction of the chances of project failure, due to modification planning.
  • Elimination of misinformation; unification of discourses and actions.
  • Engagement of those involved in the project, since they know what new challenges they should adapt to.
  • Faster implementation of changes, due to minimized resistance.
  • Budgetary control of the project with better administration of the changes (previously mapped and studied).
  • Improvement of communication between all those involved in the project.
  • Ease of impact analysis (psychological, procedural, financial, etc.) generated by the modifications implemented.

Change Management and Open Innovation: Why Combine Them in the Digital Transformation Process

We all know that Digital Transformation causes profound changes in a company’s culture.

It not only modifies the way people deal with technologies and processes, but brings challenges such as protecting corporate data, the need to develop new skills, etc.

That’s why here at MJV, we resort to Open Innovation and Change Management whenever we help our customers enter the Digital Transformation process consciously and strategically.

Success case

See the case of this large company in the retail field for construction materials that needed to reduce the impact of new technology ecosystem implementation n the routine of its approximately 9,000 employees.

The company was entering a process of implementing new systems in its store network and called on MJV to develop a unified platform and build a new training experience.

The company needed an innovative solution to deal with the challenge and sought external help (Open Innovation).

MJV’s team of consultants chose to structure a Change Management strategy that, while circumventing employee resistance, helped prevent enormous operational risk.

The consultants proposed the Design Thinking process to understand the needs of employees. In-depth interviews were conducted to understand under what conditions market information was delivered to employees and how they reacted to these and other day-to-day processes.

With feelings and expectations properly mapped and studied, the team opted for Gamification.

A game was conceived where users were explorers who needed to explore worlds and territories still unknown, each world corresponded to one of the areas affected by the change.

The unknown territories contained content that made players aware of information that would be important and useful in their daily lives.

In short, the process of implementing the new system, which lasted one year, went through without a hitch. And that’s because users were sensitized, engaged with the game, learned and couldn’t resist transformation.

How is the Digital Transformation process in your business? Have you ever thought about how Open Innovation and a Change Management strategy make it faster and more efficient?