Johnson Matthey Open Innovation 

Client

Johnson Matthey

Challenge

Johnson Matthey, a company with a strong tradition of in-house R&D, recognised that relying solely on internal innovation was no longer sufficient to maintain competitiveness in today’s rapidly evolving market landscape. Despite their historical success with internal research and development, the company needed to expand their innovation sources to support strategic growth objectives. This realisation aligned with industry trends, as 40% of the largest companies in innovation-intensive industries (including chemicals) were already engaged in corporate venturing activities. The challenge was to develop a structured Open Innovation (OI) process that would complement their existing R&D strengths while allowing them to tap into external innovation ecosystems.

Johnson Matthey’s current involvement with SMEs was primarily through publicly funded programmes like Innovate UK and H2020, where they served as what they described as a “passive industry partner.” The company needed to transition from this passive role to become more proactive in selecting and managing innovation partnerships. Additionally, while Johnson Matthey possessed unique facilities and expertise that could benefit SMEs, these resources were not readily accessible to external partners.

Solution

To address these challenges, a comprehensive project was undertaken to design an Open Innovation process tailored to Johnson Matthey’s specific needs and capabilities. The project included:

1. Market Analysis: A thorough review of UK energy storage SMEs identified a significant number of companies working on various battery technologies and other storage technologies. This database focused primarily on UK companies but also included firms from several other countries.
2. Industry Benchmarking: Detailed case studies of two relevant corporations with established OI programmes—[Company A] and [Company B]—provided valuable insights into different approaches to open innovation:
   • Company A’s comprehensive program, established in 2005, utilised corporate venturing, licensing, competitions, incubation, and partnerships.
   • Company B’s more recent initiative started with a £10 million venturing fund and employed proactive scouting, employee secondments, and an open competition called “Big Energy Idea.”
3. Value Proposition Assessment: An evaluation of Johnson Matthey’s potential offerings to SMEs identified valuable assets including unique facilities, market insights, access to customers, and transfer-to-manufacture expertise. Areas for improvement included HR support relevant to SMEs and early-stage investment capabilities.
4. Pilot Programme Design: Based on these findings, a focused pilot programme was developed within a strategic business division. The pilot would involve:
   • Active scouting for suitable innovation partners
   • One-to-one selection meetings with a number of candidates
   • Final selection of a small group of companies for deeper collaboration
   • Assignment of internal champions/mentors to each selected company
   • Structured access to Johnson Matthey’s in-house resources

Outcome

The proposed pilot program was designed to deliver several key benefits:

1. Exclusivity and Selectivity: By carefully vetting potential partners, Johnson Matthey could focus resources on the most promising opportunities.
2. Resource Efficiency: The program leveraged existing internal resources, keeping per-company costs low while maximising impact.
3. Enhanced Impact Options: The basic framework could be augmented with additional investments to fund SME expenses (particularly for accessing overseas Johnson Matthey facilities), offer innovation prizes, and provide external incubation in areas where Johnson Matthey lacked internal experience.
4. Strategic Alignment: The pilot within the selected business unit would test and refine Johnson Matthey’s approach to open innovation, directly supporting strategic growth objectives.

Following the completion of the project, the next steps identified were to secure buy-in from key stakeholders regarding the pilot’s focus, approach, and resource requirements. Once this approval was obtained, the project team would finalise and implement the detailed pilot design with the selected SMEs.

This structured approach to Open Innovation positioned Johnson Matthey to realise the documented benefits of OI observed in other companies: reduced costs, accelerated time to market, increased market differentiation, and creation of new revenue streams.