How Open Innovation can accelerate the future
Amazing things happen in times of crisis. When the current COVID-19 pandemic struck, we saw, all around the world, the most creative initiatives for collaborating and helping others. But not just individuals united, surprising (or not) companies from all sectors came together to openly help and create value.
Collaboration became one of the few strongholds against the pandemic during those chaotic months. United under a higher purpose, new movements, initiatives, business models, technologies, and services were born. Although it seems that there is no doubt about the value of collaboration, either it being for saving lives or for helping companies, it may shock you with how impressed executives still are with some of its principals.
With the growth of technology, more competitive markets and new ways of working, innovation is becoming increasingly important to organizations for maintaining competitive advantage. Looking into the future, in search of the next big idea or just to anticipate market and consumer changes can be what dictates success for companies and organizations. Through the years, new methodologies and techniques for innovation came to be in search of more human, business, technical or even design centered. These shifts in the way companies innovate aren’t exactly new, companies have started reshaping their innovation process with quicker and shorter iterations, digital collaboration and deeper user research to create breakthroughs not just alongside traditional R&D areas, but also in social initiatives and business development.
Faced with bigger challenges that they could tackle and powered by the proven value of collaboration, companies, startups, experts and entrepreneurs are merging under Open Innovation programs that are being more and more adopted and sought.
But first things first, what is Open Innovation?
Although it may seem like a super fresh idea, the concept of Open Innovation has been around since the 1960s. Even though some high profile companies from the technology and pharmaceutical sector have been using it for decades, the last few years have been the advent of Open Innovation as companies are seeing its potential and adopting it on their innovation strategies.
But to understand what Open Innovation is, one must understand what the “opposite” would be — Closed Innovation.
In a more traditional model for innovation, a company depends on its R&D operations to generate, develop and commercialize new innovative ideas. Nowadays, in many industries, the thoughts of an internally centralized approach to R&D has become obsolete. This closed innovation model is the one that leading industrial companies used during the 20th century like the Bell Labs founded in 1925 that brought alive innovations that changed the world forever — but things are changing.
For years this was the way to go, keeping knowledge secret and tight, generating intellectual property, safe from competitors, financed big investments in R&D and generating v fruitful innovation cycles.
As Open Innovation gained more ground on boardrooms and corporate ecosystems became stronger, establishing a community of partners showed fundamental for businesses. Strategic cooperation between different areas of businesses, like shared services, joint approaches, or complementary assets are just some of the more traditional forms of structural collaboration. With R&D and innovation this isn’t much different.
In essence, the Open Innovation model is where different corporations partner for the developing and commercialization of both its own and others’ ideas. They seek ways to bring innovation to the market by developing new innovation avenues outside the limitations of their own business. Connecting with different agents outside the corporation will permeabilize the boundaries of the organization allowing dynamic relations between different innovation stakeholders on different companies and markets therefore accelerating the innovation process.
In principle, Open innovation is a model for innovation that encourages organizations to join forces and collaborate in the pursuit of a solution to a common problem.
Moments of crisis can create an accelerated, sometimes unpredictable, pace of change. Considering that you are directly dependent on the success of the relations between you and your partners, choosing them is one of the key parts of building a successful open innovation enterprise. This can sometimes represent a retraction in fear or insecurity but it can prompt companies to search for completely new approaches. Exploring a greater number and even new kinds of partners is one of them. But remember that this common challenge of finding new partners always entails costs in terms of search, validation, and compliance, as well as the formation of new social relationships between people.
How can this accelerate the future?
Whereas in closed innovation environments the responsibility of choosing what ideas to pursue is up to a few (or one) executives, in open innovation this is made considering that different elements of the open innovation network will have expertise in different fields and markets, and therefore assessment and decision-making happen in a more distributed way.
This can intrinsically increase the speed of overall innovation because more energy and diversity are being combined across different innovation agents. Besides, these other innovation agents can support you to access new markets, expand your product portfolio, increase sales, monetize intellectual property, enhanced digital transformation, all through these open innovation initiatives and via the different pathways of this open innovation network.
Of course, this speed can be directly related to how much resources you invest in these innovation projects and what’s the scope for your open innovation initiatives, but chances are that you will go faster and wider than in a closed environment. Remember that these innovation projects will connect you with talent that probably you could not reach otherwise like in universities or research centers and also give you the chance to bridge (and probably invest) with emergent startups.
Companies too focused on their internal structure tend to overlook ideas that fall outside their current business or operations. In R&D projects it is up to the researcher or the managers to evaluate what ideas show more potential and promise more value. Sometimes what looks disperse and abnatural can be an opportunity and a potential commercial success. It can be particularly painful for executives that made substantial long-term investments, just to discover later that some of the projects they abandoned had tremendous commercial value.
Besides the higher speed, this can certainly make you one step ahead by anticipating market changes and trends, understanding what your customer is looking for on new emergent service providers that can quickly become fearsome competitors.
Innovation is gaining a central role as part of corporations strategy and values, as it is being more than ever related to sustainability, social causes and more human-centered products and experiences, in opposition to just being seeked for operational efficiency or new commercial options. If you are feeling shy about being somehow more innovative remember that innovation is not about writing a beautiful manifesto but about actions, that most of the time mean risk-taking. Consider partnering or bringing some form of help from outside your company, such as consultants or new hires that can help you first setup an innovation management plan. This should include not just “outside” actions but some to foster a culture of innovation inside your organization and have everyone on board.
Bonus: If this was to businessy for you and social causes are more up your alley you may want to check this IDEO initiative called OpenIDEO, an international network of innovators with chapters all around the globe who connect to solve social problems through open innovation.
