This is how ABB Drives takes the most out of open innovation

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Written by:
Juho Vuorio
Innovation and Venture Program Manager at Drives business of ABB

Since 2016 ABB’s drives business has actively connected with startups through a structured program. The program has three distinct steps that each serve a specific purpose: Connect, Collaborate and Commercialize (CCC).

CCC complements ABB’s corporate startup and open innovation approach by adding a business lead initiative, creating additional possibilities for startups and innovators who are willing to partner with a technology leader.

ABB’s drives business serves global customers in utilities, industry and transport and infrastructure. Depending on the needs and type of a solution, a startup may gain access to markets, conduct a pilot at a customer site, and gain further development and funding support. .

Why does ABB Drives want to connect with innovative startups?

  1. Digitalization: ABB and its’ customers in utilities, industries, transport and infrastructure are going to be transformed through energy and 4th industrial revolution. The pioneering technology that ABB has been proud of for 130 years needs to be supported with software and services elements that are not in the traditional ABB comfort zone. We need collaboration with innovators.

  2. Today, new technology is monetized first in consumer market. Contrary to the situation some decades ago, when the best technology was first found in government research labs (e.g. NASA, etc.), then implemented in industry and later adopted in consumer market. Since some time now however, the innovation in technology has moved to the consumer space like mobile phones, social networking, streaming media and artificial intelligence driven apps. This has led to explosive improvements in computation, storage, and connectivity. Those technologies are now spilling over to the industrial markets causing a massive opportunity for new value creation.

  3. We need to improve the traditional validation and learning cycles. The industry standard is two to three years of research followed by three more years for product development and a sales rollout. We need to be faster.

How do you run a successful corporate startup collaboration program?

Distilling the elements of successful corporate-startup collaboration, I’m confident that the following key takeaways capture the elements of our successful program and can be generalized to any corporate-startup collaboration initiative:

  1. External co-innovation needs must be in line with the corporation’s overall strategy. Only then will the program gain the support of senior executives from across the corporation. Otherwise there’s a risk of running vanity projects and wasteful resource allocation, as well as a lack of clarity and uncertainty for the participating ventures.

  2. Stakeholder management at all levels.  Top management support alone won’t open the doors for you. It’s important to convince each function when launching a new type of initiative. I believe it pays to have network of stakeholders both at the executive and project management levels.

  3. Be explicit on what you have to offer. One of the fundamental mistakes is how corporations assume startups will just flood in when you open a door for collaboration. My observation is that the best startups out there are not knocking on your door. They are scaling their business with customers and are 100% busy! Corporations need to be clear and honest, to themselves and the startups, about what they can offer.

  4. Start doing and revise as you learn. You can always find a dozen reasons why you shouldn’t start; build a better plan, mitigate risks, or ensure alignment. I hate to say this, but a corporate innovation executive needs to break some rules from the ordinary to get things going. One of my favorite quotes is, “It’s easier to ask forgiveness than it is to get permission.” It won’t be picture perfect from the start but delivering some results is far more important than planning for perfect execution.

What’s next?

Our CCC program has reached a ‘continuous mode of operation’, which means we’re active in each of the three steps:

  • Connect: We are actively connecting with new ventures.

  • Collaborate: We are working with half a dozen ventures to validate mutual business potential and agree on a way forward.

  • Commercialize: The first venture through the CCC program is now in the implementation process.

We have some exciting projects in the works and I can’t wait to tell you more about them in my next blog.

About the author

For two years now, Vuorio has been working with an internal and external innovation portfolio of ABB Drives, hosting venture collaboration programs towards commercial outcomes and studying rising customer needs that could be served through new business models and innovations. Prior to joining ABB, Vuorio has been heading sales solutions and business development both in corporate and startup contexts.