The concept of open innovation breaks down the traditional silos and frontiers in companies and transforms processes and organisation.
Open innovation, which is based on the belief that companies should use both external and internally-developed ideas, is revolutionising organisations and workspaces. It can be implemented through collaboration at various levels of the organisation and generates new practices such as integrating innovation communities of employees, partners, suppliers, clients and end users. And with this comes a new set of terminology to describe the various types of innovation: cross-functional innovation, participatory innovation, collaborative innovation, co-creation and co-development.
The collaborative dimension of open innovation also influences the physical organisation of workspaces as it’s geared towards breaking down barriers and promoting creativity. Digital technologies also feature prominently in open innovation processes as they facilitate virtual collaborative platforms, spaces for exchanging ideas, project review meetings between innovators and investors or startups and large companies.
The real challenge: changing the corporate culture
With its focus on using outside input, open innovation requires cooperation between organisations with different corporate cultures and the ability to collaborate with external skills and manage new sources of ideas.
It also challenges the organisation and working methods of a company’s employees: this is one of the main caveats stressed by the French Open Innovation Institute, which has identified four types of change that open innovation brings about within organisations:
- Shift from a closed to an open culture by relying on a few key employees (“open innovation champions”) and transforming the company’s various sub-cultures
- Change the organisation’s attitude to disclosure and confidentiality because “information is a two-way process.” This issue is particularly challenging for industries such as nuclear power and defence.
- A new R&D approach that involves cross-functional/departmental cooperation (Purchasing, Logistics, Marketing, Sales, Legal) and sharing knowledge based on a common language.
- Adapt the HR policy to staff who are committed to open Innovation, (i.e. open innovation champions), and use them to liaise with external players and spread best practices. HR first has to identify these people; who will know “how to find information and know how and with whom they share it.”
Open vs. closed innovation
Widely acknowledged as the father of open innovation, American economist Henry Chesbrough identified the differences between the two types of innovation (see table below).
Closed innovation describes traditional product development, marketing and business methods whereby everything is managed entirely within the company.
With open innovation, innovation is managed with input from outside the company or from departments other than R&D. According to Chesbrough, this model has been adopted over the past decade as it helps increase high-level skills, boosts the development of venture capital firms, and ensures a faster time-to-market which forces organisations to seek external collaboration in order to benefit from innovation, make processes more efficient and develop new opportunities in line with the market.
The different open innovation models
Chesbrough also identified two different models within open innovation:
- Outside-inOpen innovation involves opening up a company’s own innovation processes to many kinds of external input and contributions.
- Inside-outOpen innovation, meanwhile, requires organisations to allow unused and under-utilised ideas to go outside the organisation for other companies to employ. This type of model is not as well-known as the outside-in variety and raises a number of questions, such as the issue of intellectual property. (Source se)