Companies often believe that it is essential to innovate in all secrecy, that it is crucial to hide all new developments from competitors...
And while that is true in some cases, trying to do everything internally and by-yourself is not always (and even less and less) a recipe for success.
Leveraging talent, knowledge and ideas from the outside might be a faster and better way to success. Crowdsourcing ideas from clients or consumers, scouting for solutions and startups that help your company address business challenges is what is referred to as an open innovation.
It is an approach where you share your challenges and leverage the wider community around you to innovate.
Open innovation is just a mindset, an approach...
when there are challenges there a mostly related to a company's maturity to deal with partnerships and sometimes consultants like Accenture, over-promising, coming in and making things more complicated than what they need to be....
There are plenty of examples of companies that successfully crowdsourced new product innovations like Starbucks or Lego, but this requires a certain maturity level to be able to take ideas forward. Companies that work with startups like AT&T have also been fairly successful. The problem is that consultants with 0 entrepreneurial background have been promoting these approaches (in particular setting-up innovation labs and accelerators) with little consideration for the organization's maturity to turn concepts into commercial solutions. It is not one size fits all model.
In addition working with co-creation can be difficult as it requires not only a similar maturity level on both sides, but also an alignment on objectives and wanted outcomes...
I believe open innovation needs to be seriously considered and equally seriously implemented...
I believe organisations where this hasn't seen much success is where the 'closed innovation' with an additional layer of partnering with some external network players (e.g. a start up, an academic inst.) is quickly packaged as 'Open Innovation'.
Key issues have been more political/cultural rather than technical. Departmental fiefdoms, gatekeepers, skepticism regarding anything “not internally and formally invented,” and turf wars all hold back adoption and hence this concept requires a larger network effect.
Two key success factors in my opinion, emerge:
- a. Knowledge Commercialisation, which drives accuracy, scale and transparency (e.g. United Genomes Project) and
- B. 360 Degree Rewards where initiators, contributors and beneficiaries all derive tangible value in the end (e.g. Lego, Coca Cola etc.)
In my experience, Open Innovation can be hugely successful under the right circumstances. For example, when there's an enthusiastic external audience for the company to leverage (e.g. LEGO); or when the purpose of the innovation isn't to create protected IP and/or when the purpose is to provide a better customer experience that also needs to be widely adopted for it to replace the current standard (e.g. mobile boarding passes).