Wednesday, January 1, 2014

The Open Innovation Perspectives

Open Innovation starts with an Open Mindset and Disciplined Approaches. 

Open Innovation in its simplest form is that a company recognizes the benefits of working with others to stimulate innovationIs it too broad as a term or is it too vague as a concept? Is it a democratization of creativity, or just a cheap way for companies to underpay for good ideas? What is more insightful perspective on open innovation?

At the heart of innovation is a life cycle of idea generation, interaction, selection, and learning. Open innovation can improve idea generation, increase interaction and increase learning. Open innovation always intends to produce knowledge that leads to some value for those involved. Therefore, it can be a good thing

The idea behind Open Innovation is that the problem/challenge/brief is put out for anyone to apply or contribute. It can involve bringing in ideas from outside - from lead users (the ones that have passion and info to share), from wider user-community to drive features and understand the value-in-use of a product/service - or working with key suppliers or universities to innovate. You trust them and you both intend to learn and build knowledge. It can also involve close-coupled relationships between organizations - with intent on exploring areas of learning that fit strategically for all parties.

The point of open innovation is to increase the odds of finding the next great new idea. Open Innovation is about ensuring that business has access to the maximum number of potentially good ideas for new innovative products. This means having a very good internal program and it also means sourcing a lot of ideas from external partners. The goal isn't to be cheaper and it isn't to be just democratized, it is to ensure that as many of the good ideas as possible to flow in. The more different types of people and organizations that you can focus on solving problems for your customers, the better result you may get.

The goal of a good innovation program is not to minimize the expenses, but to maximize the chance to find the best idea and its market impact and profit. You will get different types of ideas internally and externally and if you want to profit from both of them, you have to have a good open innovation platform, program and culture ready. Open innovation is more about the process - involving a wider stakeholder group, and everybody can vote and participate.

Open Innovation pitfall #1: Lack of innovation cultures. Often open innovation is seen as the "Holy Grail" and solver of all the problems companies may have in new product development etc. Most companies using or moving to open innovation often do not have the innovation culture ready for it, or they are not willing to spend money for Change Management needed. Mostly they spend a lot of money for their open innovation platforms. What’s often missing is internal innovation culture to support these platforms and ideas coming from outside the company. "Open innovation mindset" inside the companies is missing. It needs a completely new way of dealing with knowledge, the willingness of sharing ideas & knowledge etc.

Open Innovation pitfall #2: Lack of Systematic Processes: Open innovation is sometimes overrated and often used as an excuse for not having an effective and efficient closed innovation process, and getting the "closed" innovation onto the market. Most of the companies are not prepared for open innovation but believe it is a cheap way of getting fresh ideas and solutions from outside; they may see it as "outsourcing of ideation" but forget about the systematic innovation processes needed to be successful and profitable at the end.


Open innovation is an important part of holistic innovation strategy, but it is just one methodology out of many for generating innovative ideas. If a company doesn't have a good internal innovation culture and systematic innovation processes, it is going to struggle with getting a lot of value out of open innovation








1 comments:

Really interesting Pearl, thanks ​!

Given your interest, I think you'll be very much interested in this list of emerging Open Innovation research: http://www.openinnovation.eu/07-05-2013/768/

And in this new research too:

- The Contours of Crowd Capability
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2324637

Powerful stuff, no?

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