Henry Chesbrough put the idea of open innovation on the map.
The Open Innovation concept is based on the idea that companies are no longer able to tackle the entire innovation process on their own. To truly innovate, companies need external resources (intellectual property, ideas, products, people, institutions) that must be integrated into their own innovation process. The end product or service, though, then may be useful across other categories and for other companies. Henry was adamant about saying that true innovation no longer comes from the top down and from the core out, but rather from the bottom up and from the fringe of the organization to the core.
Henry went on to explain the idea of closed innovation. In the closed innovation model, an internal flow of ideas passes through filters with possible ideas falling by the wayside, until proposals focussing on the market are reached, with the aim of being the first to offer products and services.
However, the scenario has changed according to Henry. First of all, the number of sources of innovation has grown.
Open Innovation can be applicable to the same funnel described above but now with holes that allow ideas to flow from internal and external sources and lead to different targets (current market, future market or any other third party). No longer is it necessary for innovation to come from inside a company in order to make a profit from it; it’s now possible to access your market with other people’s breakthroughs.
Henry provided some really nice tips on how to determine if your organization is ready for an open innovation culture:
- Do you have a strategy ready to go?
- Are you open to innovation internally? In order to share data and knowledge with external partners, you must be setup to share that same intelligence internally. If not, you quickly find that all this wonderful information is powerless.
- Can you manage intellectual property differently than your organization is use to?
- Do you have any instances to celebrate and build from?
If you make it through that quick-start assessment, consider the following:
- Wrap your services around your products (or vice versa)
- Turn products into solutions
- Co-create innovation with your customers
- Use openness to get more from specialization
- Build platforms to attract others to your solutions