Open Innovation

Open Innovation is s a term promoted by Henry Chesbrough, of the Center for Open Innovation at UC Berkely, in his book Open Innovation: The new imperative for creating and profiting from technology. It is based on the concept that in a connected, networked, knowledge-based world an organisation cannot rely on its own innovation capability and capacity but must exploit the thinking of others – by buying or licensing external intellectual property (IP). The term ‘open innovation’ was suggested by the open source, software concept whereby collaborative projects involving previously unlinked individuals or groups can result in concerted and co-ordinated effort towards agreed goals.

An example: Procter & Gamble initiated their open innovation program when they learned that for each of their 7,500 R&D people there were 200 people outside the company with equal skills and competences. What a resource if it could be (at least partially) tapped.

There is now an open innovation ‘movement’ and a number of organisations that act as ‘knowledge brokers’ (or ‘ideas matchmakers’) to assist in the process of locating and licensing appropriate IP … and a number of tools that claim to facilitate open innovation.

The ‘movement’ has also expanded and branched into other concepts and areas of practice such as ‘crowdsourcing’(a word coined in 2006) – the practice of issuing a call for ideas or collaboration and ‘stitching together’ as many of the respondents as possible (a form of ‘distance brainstorming’).

Open Innovation is not ‘new clothes for old practises’. Much of the claimed open innovation practice seems to be between commercial organisations and university research departments. This has always gone on … but now they call it by a new name!

The real development is open innovation have been in the partnerships created by commercial organisations and in the ways in which technology (and especially social network services) have made different working practices possible.

Of course a move from ‘closed’ to ‘open’ innovation can cause tensions within an organisation … the R&D department that thought it was responsible for innovation might feel ‘squeezed out’ (though relying on R&D departments for innovation never was a good recipe for innovation in my book). As such they might be ‘protectionist’ espousing open innovation but not practising it. An open innovation initiative should be lead - or at least championed – by a senior executive who can change behaviours.

The aim is to be open enough so that potential partners see you as the partner of choice – the easiest to deal with.

Of course adopting open innovation can help smaller companies get access to resources that would otherwise be outside of their reach. However if they partner with larger, more established organisations there is a risk that they lose their voice. There is also the risk that the flexible, creative, small organisation gets ‘frozen’ into rigid work practices by their larger partner.

Involving customers or users is helpful – but not enough. They can help direct innovation towards customer needs (knowing WHERE to innovate is always a good thing!) but open innovation, involving external partners, also looks at HOW that innovation might be delivered.

As with innovation itself, open innovation often needs a change of culture – to one focused strongly on teams and on ideas … and the mix of the two. There are things you can do – temporary co-location of teams, assigning overlapping tasks to different organisational ‘silos’, frequent prototyping and review, etc – to help change the culture … but it only works if the key individuals at the top of the organisation ‘walk the walk’ as well as ‘talking the talk’.

Open innovation is not easy to accomplish – but it can offer new inputs into the organisation and it can deliver …. Innovation!


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