Open Innovation (OI) was a term coined by Henry Chesbrough to reflect the paradigm to bring ideas, technologies, know-how from around the world in-house and likewise bring the home-grown ideas outside. There are several ways to achieve OI – Platformization, Open sourcing, Hackathons, Idea Jams and organizations may choose one or several of them.
OI is also thought more in terms of product innovation, but its (increasingly) true for service innovation – sourcing ideas for process improvement, improving the quality of service and so on. OI is prevalent in startups (Kickstarter, Seedrs, etc.), but it is increasingly being adopted in established enterprises. One of the first cases I remember is that of the IBM Eclipse platform where IBM made the platform available for everyone thus encouraging enterprise developers the world over to adopt the platform and hence increasing the adoption of IBM platforms, products & services built on top of the Eclipse platform.
Similarly, GSK has done it by open sourcing its clinical data and letting external scientists develop cures, P&G has done it through its Connect+Develop program. More recently, Philips embraced OI by the way of platformization & hackathon as it evolves from a Healthcare products company into a Healthcare platform and services company. The Android & iOS platforms that we use everyday are also examples of OI. (The Implication of Open Innovation and Open Source to Mobile Device Manufacturers ; The App Economy and Open Services Innovation)
OI is looked upon as a “paradigm”, but I look at it as a new business model. A business model that drives the top line (new/better products or services, new revenue streams) and improves the bottom line (reduced costs of RnD, Engineering).
OI is also made possible by technologies that did not exist yesterday – social media, collaboration, cloud, mobiles. Organizations must first need to embrace the idea of OI – understand the need that to keep pace with today’s world, no matter how much they invest in their existing internal resources, they will not be able to match the pace of innovation needed.
Then comes the part of selecting the right model of OI – moving from products to platforms, open sourcing, crowd sourcing. Once the objective & model is decided, next comes the part of choosing the right partner(s) that will help realize the OI objectives. The right partner brings in 3 key things – a robust framework, an underlying tool that enables this framework and know-how.
The framework brings the people, process & technology together. The tool powers the framework by providing the features needed to support collaboration, ideation, selection and implementation.
Finally, the know-how brings in best practices from having worked internally or with other clients. Once the OI engine is running, the partner needs to support the engine. But most importantly, the partner must bring in new innovation itself and also adapt to the changing needs of the organization it is supporting.
OI is here now and is no longer a question of “If” but a question of “When” & “How”.