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  • Anna Ehrnrooth

Open innovation and NGO's - when “It’s no use anyway” becomes “Hey, why don’t we try this?"

Is open innovation only for businesses? Or can NGO’s and other third sector organizations also benefit from open innovation, and what is needed for it to be successful?

What is open innovation?

Open innovation was originally developed to revolutionize R&D by opening up the process. Traditionally R&D had a high security profile, and industrial espionage was a big risk. Drilling holes in the boundaries of R&D and involving actors from outside the company allowed new and better ideas to thrive, which led to growth and success.

There are plenty of ways open innovation benefit companies: partnerships, ventures and spin-offs with others or independently, incubators and accelerators for cooperation with startups, or even acquisitions of companies with new ideas, technology or innovative teams, and much more.

But is it only companies that can benefit from open innovation, or can organizations working primarily within a non-commercial context, often referred to as the third sector, also find value in such activities? And what kind of value is it that NGO’s, foundations, charities or other not-for-profit organization are interested in?

There are plenty of examples where open innovation has been used to improve and increase funding, improve efficiency in governance or project execution, or drive growth in order to deliver more of what these organisations are founded for. The challenge is that they are often very strictly bound by their statutes or founding letters, as well as by tax or regulatory restrictions due to their nature and purpose.  They cannot generally be “profit-seeking” or market oriented. However, efficient organization, more funding/donations, improved productivity – both in terms of economy and outcome - and growth, are all goals that can be the object open innovation activities.

Case Folkhälsan

Folkhälsan, an NGO and foundation providing social and health services primarily for the Swedish speaking population in Finland, realized that it needed to be better equipped for the digitalization of its industry and prepare for impending regulatory reform. Breaking with both industry and organizational tradition, it decided to collaborate with Vertical, a startup-accelerator turned Business Augmentor.*  With the help of Vertical, an interesting threesome was created to foster a new way of working. The startup chosen for the project was GonioVR, whose Virtual Reality product for rehabilitation at first seemed a bit off focus for Folkhälsan, but whose interesting technology as well as a dedicated and fun team totally charmed the participants and laid a great base for the collaboration. Just goes to show how important it is to have the right people involved.

In order to be successful, open innovation projects in health care usually need to

  • Respond to gaps in the innovation system, which means that they need to address a clear need or specific barrier to innovation

  • Capitalize on existing strengths and resources;

  • Start small and simple, with focus on low hanging fruit and demonstrate impact;

  • Gain support from health leadership, which adds prestige and even creates a brand for the project;

  • Build strong relationships with health services at different levels;

  • Support teams of innovators (Having the right core team is indispensable.);

  • Provide opportunities for interdisciplinary working; and

  • Focus on innovators as well as innovation

1. The gaps and the goal?

Pinning down the goals for the project was not an easy task. While the general interest of course was clear, i.e. to prepare for digitalization and make way for an innovative organizational culture, more concrete objectives and deliverables needed to be defined. In an organization whose activities range from babies to the very old and frail, from health promotion to health care and advanced research, from education to summer camps for children, to services for young people with special needs, Folkhälsan decided to focus on services for the elderly, focusing on health and well-being in its assisted living facilities.

Folkhälsan set out to find 2-3 startups, of which at least one would improve efficiency, increasing the time nurses and care givers have for the "human touch". It was important that as many people as possible could be involved in different parts of the project – although quality, not quantity, was prioritized. The third goal was probably the hardest, focusing on creating an innovation process for the organization as a result of the collaboration.  When the startup-collaboration is very concrete, i.e. developing rehabilitation and health promotion activities with Virtual Reality technology, the goals have been helpful to keep the big picture in mind.

2. Capitalize on existing strengths and resources

Folkhälsan's strengths are focused around its strong engagement within the Swedish speaking population, a strong economic position, good leadership and a genuine commitment to public health promotion, with world class research to support it. As it turned out, the organization already had a number of “modern” technologies in use, and a curiosity and openness to digital tools helped the startup collaboration take off. Customers as well as personnel were eager to try new things, test the prototypes, and give valuable feedback. 

3. Start small and simple – get quick wins

The initial plan was to find 2-3 startups to collaborate with, but it was clear that there was not enough time and resources to manage more than one.  As a compromise, the collaboration was divided into three different streams, to maximize on outcome but minimize on management.  With the original focus group – the elderly - in mind, the organization set out to test the existing rehabilitation product, and to develop two new solutions – one for health promotion purposes and one for elderly with dementia or similar memory related problems or illnesses.

Without clinical research, the health effects can’t yet be verified, but it was clear from the feedback, that both solutions were effective - and fun!  They were always used with the help of a physiotherapist or equivalent professional to make sure the player was safe and using his or her body correctly to maximum effect.

4.  Leadership

You definitely need a champion, an ambassador, to run the project. Someone enthusiastic who sees the value in it, but also has the ability to communicate and demonstrate results. He or she has to have the will and the power to lead for change. All this existed in Folkhälsan, the enthusiasm spreading among the professionals and all the way up to the board of directors. Emotion definitely helped drive the project forward when a somewhat complicated organizational structure could have been a much larger challenge.

5. The teams, relationships and interdisciplinary work

The regulatory environment in the health and social services industry is like no other.  It ties resources, involves extensive red tape, defines working hours and number of personnel required, to name just a few. Regulation also suggests there is little time and room for innovation: things have to be done in a certain way.  Selecting the participants through a competition, where teams were chosen based on interest, engagement and innovation, was used in one part of the organization.  In another, the team was chosen based on their responsibilities.  Both worked, but in different ways. The competition gets you an engaged team, the other way a team based on professionalism. Neither way excludes the other characteristic though, but priorities may be different. Both have overcome the apparent challenge of regulation.

With people from different backgrounds, creating an environment where it was ok to be creative and letting ideas run free, was one of the startup collaborator’s strong sides, as was the ability to listen and identify the ideas worth taking forward.

Just as important was making time for testing prototypes with end users, in an environment and setting where they felt comfortable. The exhilaration on 94-year old C’s face when she, sitting in her wheel chair, with a virtual reality headset and controls in both hands, was reaching for berries in the virtual forest. Not wanting to stop, and laughing at her sore muscles after the session. And the comments of her friend, who followed her efforts from the couch, about how it was just as much fun watching someone playing the game as playing it yourself. What a rewarding experience!  You can watch her at work here:

6. Focus on innovators?

Where do you find them – the innovators? And how do you give them room to innovate? I think everyone can be an innovator. We all see problems that need fixing, and things that can be improved. To make everyone an innovator, it needs to be ok to be one.  Open innovation practices can be a way of changing that culture of “it’s no use anyway” into “hey, why don’t we try this?” Through problem definition, good leadership and starting small, an organization can change and become better, in any way it sees important from its own point of view – businesses as well as third sector organizations.


Non-profit doesn’t mean the organization shouldn’t be efficient, or that economic considerations aren’t involved. On the contrary. Efficiency, productivity, good management, solid finances, development etc. are all important for the non-profit, just as they are for businesses.  And they can all be the object of open innovation.

If you are an NGO wanting to try out open innovation practices, don’t leave these business related elements out of the process just because they don’t seem to fit in your values – they are tools, not ends in themselves.


Vertical defines what it does as follows: "we believe in combining strengths and making business better by adding to it, we support the joining of forces between corporate experience and startup tenacity.”

Would you like to find out more about open innovation, startup collaboration or - if you are a startup interested in collaborating with large organisations - business or NGO collaboration, do get in touch and we'll help you get started.

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