Open Innovation: a set of innovation processes open to internal and external contaminations of the company. Collaborative development of ideas with different subjects: employees of different business units, suppliers, startups, independent inventors and university laboratories, but also customers or companies operating in different markets.
But what does an Open Innovation initiative consist of? Is it for everyone? When can it bring real benefits? What are the risks to which it exposes?
In this article, we will try to answer all these questions in a concise and pragmatic way.
If you are reading this article, maybe you are not only interested in the topic, but you are considering how to propose/activate an initiative of Open Innovation in your company or as an individual to become part of an open innovation ecosystem. We hope to provide you with useful food for thought, in-depth stimuli and some practical tool to activate an open innovation process in a productive way.
A relatively young methodology
The first definition of Open Innovation was given in 2003 in the book “Open Innovation: The New Imperative for Creating and Profiting from Technology” by Henry Chesbrough, US economist and Faculty Director of the Garwood Center for Corporate Innovation in California.
For Chesbrough “Open Innovation is a paradigm that states that companies can and must resort to external ideas, as well as internal ones, and access internal and external paths to the markets if they want to progress in their technological skills“.
The enormous success of Open Innovation initiatives derives undoubtedly from the competitive and economic advantages it offers compared to Closed Innovation processes, where innovation is a proprietary activity carried out mainly within the organization in a series of carefully managed steps.
Very widespread abroad, the Open Innovation is also taking hold in Italy. According to the latest report by the Osservatori Startup Intelligence, Startup Hi-tech e Digital Transformation Academy, this process of innovation begins to have increased weight in the strategies and spending decisions of Italian companies. Almost a third of the sample companies analyzed by the Observatories last year applied Open Innovation initiatives. Those who have experienced it have recognized essential benefits plans to continue to adopt it and improve its implementation process.
All that glitters is not all gold!
For every successful Open Innovation project, there are at least a dozen that have failed!
If it is true that the results achieved by an open innovation initiative can be advantageous for all those involved, it is also true that to get them we need full cooperation, sharing of resources and energy, but also risks. This is not always trivial, especially for situations in which innovation is historically linked to secrecy and intellectual property.
At the base of any open initiative there is an awareness of the power of collaboration: the recognition of one’s own limits and enrichment that can come from the outside and at the same time the awareness of one’s own skills and the desire to activate them in the realization of a project that does not belong to me completely. But being able to collaborate constructively is not always easy.
Just as in human relationships, the ability to collaborate requires empathy and conflict resolution skills to work, in the same way, the collaboration between complex organizations requires appropriate resources and approaches, but above all risk management skills.
They are companies open to collaboration those realities for example that favor convivial moments of meeting between employees, but also with suppliers or customers: opportunities to break the patterns of distance within the normal business process and to facilitate greater sharing.
It helps to nurture a spirit of collaboration also to enhance and encourage spontaneous sharing within and the inputs collected from outside. Some realities even have invested in the creation of platforms designed to facilitate and accelerate internal sharing (and sometimes even open to the outside).
Behind the push however to a collaboration and sharing among the plurality of all the involved actors there must also be a good orchestration: a clear definition of the objectives, the roles and the timing, but above all the presentations from the beginning of moderators (and offices legal) that can monitor and regulate the internal process for the protection of all those involved.
This allows to contain and minimize problems due to the potential contraposition of interests between the parties, in the desire to obtain greater ownership of intellectual property and participation in the profits of this innovation.
Why activate Open Innovation initiatives
The generic advantages of open innovation initiatives are:
- the increase of company skills through the introduction of external skills
- stimulation and acceleration of business innovation
- privileged access to intellectual / industrial property rights of technologies
- the possibility of having a faster time-to-market
Added to these are the particular advantages of the specific innovation initiative (e.g. the resolution of an emerging problem, the creation of strategic partnerships, etc …).
When activating Open Innovation
Open Innovation initiatives are promoted when there is a need to solve a specific problem that requires skills and resources not available (or partially available) within the company or when it wants to generate new innovative ideas that can stimulate the renewal of one’s offer.
According to Gartner, these two macro-stimuli of open innovation can be, depending on the needs, developed in moments of sharing open to a small group of subjects (by invitation), or more broadly, in moments (participatory) open to groups heterogenous of people, companies, and startups.
- GENERATE NEW IDEAS IN A PARTICIPATING CONTEXT: if the company does not have a specific problem to solve, but needs to generate ideas, an Open Innovation initiative can be activated with a proactive and participatory approach. This form of open innovation allows anyone with a view to present it or even to enrich and classify the ideas of other subjects. This approach presents some difficulties because collected ideas can be unclear and difficult to sort. It also requires the company’s willingness to develop better ideas later.
- GENERATE NEW IDEAS IN AN INVITATION CONTEXT: if the company does not have a specific problem to solve, but its goal is to create an innovative context open only to a small group of existing or potential partners, it can organize Open Innovation events by invitation. A context, therefore, opened only to participants selected by the organizing company or invited to participate. Usually, the collection of suggestions from the subjects involved is aimed at topics related to a particular sector problem.
- SOLVING A SPECIFIC PROBLEM IN AN INVITATION CONTEXT: if the company has a specific problem to solve, it can look for foreign partners who have the (technological and otherwise) skills to solve the problem. The Open Innovation initiative aims to create an ecosystem of partners linked to achieving the specific shared objective.
- RESOLVE A SPECIFIC PROBLEM IN A PARTICIPATING CONTEXT: if the company has a specific problem to solve, it can decide to face it by activating an innovation site open to a heterogeneous group of subjects focused on the specific problem.
How to activate open innovation sites
How can Open Innovation be done?
There are not many ways to activate Open Innovation initiatives. Below are the most used ones. Usually, however, they are not alternative methods but are combined and elaborated within a more articulated Open Innovation program.
To activate open innovation shipments ON INVITE of the promoter company, INTER-COMPANY ACCORDS are used. Through agreements with various companies, it is possible to create a network that can bring the subjects (startups, companies, professionals, etc …) with a fundamental role in innovation to have a constructive environment to accelerate this process.
For example, when Boeing was designing the Dreamliner, the company has entered into agreements with over 50 key companies, including Rolls-Royce and General Electric, who have participated in the creation of the new airplane.
To activate open innovation yards in participatory contexts, companies usually set up platforms for sharing ideas or organizing competitions.
SHARING PLATFORMS can have two purposes:
- to link subjects that have a particular problem with subjects who propose a possible solution, crowdsourcing platforms such as Twago or Starbytes
- provide an area in which to propose new ideas, cooperate to enrich the ideas proposed by someone else and make their contribution to the evaluation of the most innovative. It is for example what LEGO has done that in its IDEAS platform invites customers to suggest new models in an interactive way and financially rewards people whose ideas proved to be marketable.
Competitive events, instead of companies, can be organized to activate participatory open innovation sites: StartUp Competition and Hackathon. These types of competition are also organized by Incubators and Accelerators to connect innovative startups with important national and international investors.
STARTUP COMPETITIONS are real competitions between startups that usually have to demonstrate that they are able to offer the best solution to the problems and needs of the promoters of these competitions (a company or a network of companies).
HACKATHON are competitive events born in the computer field to which students, professionals, and startups usually participate. During these events, which last from a few days to a week (in Italy they are usually held over a weekend), participants must find the best solution to the needs of the company (or the network of companies) sponsoring the event, making a prototype of it.
In both cases, the finalists are supported in a mentorship path both from a technical and managerial point of view, or in-depth analysis and refinement of the business model and implementation of the technologies.
The winners consequently access an equity that guarantees them to accelerate the phase of growth and development of the project to which the sponsoring company could participate.
How ZeraTech can help you:
Innovation and collaborative openness are part of our company DNA. We are open to partnerships with universities and companies, but what stimulates us the most is collaboration in projects in areas that are always different and new. Attached to this article you will find an infographic that describes the Open Innovation Framework that we usually adopt in the collaborative contexts in which we participate. If you are interested in deepening the subject or proposing an Open Innovation initiative with us, do not hesitate to contact us.