Here is a slide deck from a presentation I gave a few weeks ago, together with the first section of an article we are writing on the same theme. Always interested in comments and feedback.
Open innovation is not a new. The term was coined in 2003 in a book of the same name by Henry Chesbrough and the concepts that underpin it have been around for much, much longer. Yet whilst the term has been widely adopted in recent years, it has remained a marginal business strategy for many large organisations.But that is now beginning to change due to a unique combination of major economic challenges combined with an emerging consensus around the open innovation tools and processes and recently the open business models required for effective innovation in an increasingly networked world.
For example we recently surveyed 153 senior executives from FTSE 100 companies and found that 47% are doing more innovation as a direct response to the recession, 42% are doing the same amount of innovation, with only 11% doing less. And in these constrained times where efficiency counts, the fastest growing innovation trend identified was that of ‘open innovation’.
We argue that open innovation has been ‘a great idea waiting to happen’ but can now become an established and mainstream engine of economic growth.
Our definition of open innovation is simple enough, namely ‘innovating with others’. In this context, we embrace the widest possible definition of ‘others’, including , suppliers, clients, universities, consumers and corporate peers.
This may sound deceptively simple but it isn’t. Open innovation is about mutually productive relationships and not just about sourcing ideas or technology from the outside. It is fundamentally about sharing – sharing the risks of innovation and sharing its reward.
This requires both careful consideration of various technical factors (such as managing intellectual property and investments) and many overlooked cultural factors (such as building mindsets for collaboration and trusted relationships around large imbalances of power).
In essence, the promise of open innovation is to create new value quicker, better, and cheaper, and so it’s no surprise that organisations like Orange, Philips and Hewlett Packard are making it a top strategic priority.