Open-Innovation at Lego and Eli Lilly


OI

Open-innovation is about using the crowd to create value in the new product development process. Two examples of this are Eli Lilly’s platforms and Lego’s Design byME service. [1]

LEGO is a perfect example of a successful open innovation case. Nevertheless it has gone through a trajectory of failures and learning experiences to polish and perfect the crowdsourcing strategy into the big success that it is now.

Before Lego came up with their Design byMe service they were looking for a way to innovate. At first they focused on a Blue Ocean strategy, but all their new product launches failed because they didn’t create much value for the customer.[2] So, they had to find a way to make new product development much more efficient and cost-effective  and  that is where their customers came in.  Lego created Design byME after they saw that their online communities loved to share their own designs with each other. Design byME is a unique customization service where users can imagine anything they want and design it with the Lego Digital Designer software. It is also possible to order the product and share the design on the Lego website through the software.

Since any design was possible to order, the price of the end product was quite high compared to the mass products. Also, the software was too complex for children who are the core consumers of Lego And the experience didn’t live up to the quality standards. Therefore Design byME was discontinued early 2012, but it was not the end. Lego learned from their mistakes and started a new service that same year: CUUSOO, which was received by the market with big enthusiasm and acceptance. With this service users can also share their designs with the rest of the community. The difference is that the product will only be produced by Lego if the design is supported by 10,000 people. [3] In the end Lego went from mass customization with Design byMe to collective customer commitment with Cuusoo. This way mixing in market research with mass customization and therefore reducing the risk for the company and lowering the product price for the customer. [4]

Eli Lilly is an example of a pharmaceutical company that makes its innovation process more widely distributed among its customers by using the Internet. The open innovation is done by scientists, but the information needed by the scientists is generated at both the patients and Eli Lilly. Patients can share their information and insights in the specialized forums Eli Lilly created.  The company also enables patient-focused drug development, in the form of personalized medicines and individualized care. By means of the forums and customization of treatments, patients are able to state their needs. Eli Lilly gives information to the scientists about their targets and budget restrictions. One of the platforms for scientists is InnoCentive, which functions as a web-based market where solutions to problems are traded and participation is enhanced through competitive problem solving. With all the information in mind, scientist can work on finding the best solution, aiming to win the financial award. [5]

As mentioned before, Lego and Eli Lilly are two companies that have implemented Open Innovation(OI) successfully and currently enjoy its virtues.  These 2 companies have mastered the methods and they are currently considering models to follow by other firms. However they keep on looking for constant improvement and further application of OI and “design it yourself” platforms.

Lego, on one hand, spreads its application to the movie’s industry with The Lego Movie, where people can create their own figure for the chance of being chosen to be part of the trailer. This new application was received by the market with great approval and excitement. [6]

On the other hand, Eli Lilly has gone one step further by creating  an independent Web-based innovation marketplace, whose nature of autonomy allows the company to serve as an intermediary and gather unbiased valuable information from communities that are outside its reach and that otherwise wouldn’t be willing to participate directly with the firm. This new modality of OI is considered a complement to the traditional OI process controlled individually by the firm.

In conclusion, Open Innovation has an infinitive number of possibilities, as many as firms in the market and there is always room for improvement.

Team 3: Carolina, Eline and Xenia


[1] M. SAWHNEY, G. VERONA, AND E. PRANDELLI: COLLABORATING TO CREATE: THE INTERNET AS A PLATFORM FOR CUSTOMER ENGAGEMENT IN PRODUCT INNOVATION, Journall of Interactive Marketing, 2005.

[4] S.Ogawa and Frank T. Piller: Reducing the Risks of New Product Management, MIT Sloan Management Review, 2006

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