Tag Archives: Open Innovation

[Guide] Open Innovation options to consider

 

Open Innovation Practice – Which option to choose?

When an answer to a question cannot be found internally, when the company has opted for outsourcing, what is the best way to deliver that answer, what are the best options for finding this outsourced solution?

For example,

o   Is it necessary to ask the market intelligence or scouting teams (if they exist)?

o   Or should the project manager be sent to a few conferences?

o   Maybe Google is the best way forward?

o   Or would an external consultant be more effective?

o   Is it better to address the question to experts or ask as many people as possible (the crowd)?

o   Is LinkedIn an option?

o   What about open innovation platforms?

Three families of approaches can be identified: doing oneself / DIY, using a consultant, or going through a platform; One can also consider that two main sources of ideas can be mobilized.

In this Guide, you will discover the list of options to consider, their pros and cons, how to choose the best Open Innovation approach for your company, and a practical way forward.

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[Infographic] What is Open Innovation?

 

” We need to be innovative in the area of innovation itself ”
John Seely Brown

Open Innovation, “The New Imperative for Creating and Profiting from Technology”
Henry W. Chesbrough

Open Innovation is a concept that turns our traditional idea of innovation upside down. According to John Seely Brown, Director Emeritus at the Palo Alto Research Center, we need to go further into invention by “innovating innovation“. The way of innovating needs to be challenged. More than just a new creation, innovation is an invention efficiently brought to a market.

Open innovation: when collaboration leads to better creation

 

With the idea of innovation being brought to a specific market, companies can no longer work without Open innovation if they are eager to go further into creation. Indeed, each company can benefit from external intelligence and contributions, whether they are coming from academics, researchers  or experts in a leading-edge technology field. Collaboration with outsiders can help your company renew its model and develop disruptive products or services.

How does Open Innovation work?

 

Thanks to Open Innovation, working in a sector with many actors, whether they belong to universities or businesses, is no longer a problem since they can help you grow. But how can your company ensure a successful transition from Closed Innovation paradigm to Open Innovation’s one?

Find out with this infographic what are the advantages of Open Innovation for your company, whether your are trying to solve issues or working on new technologies. You will also discover the 9 steps to insure a lasting transition to an Open Innovation model. With ideas coming from inside and outside, your business will have the ability to develop new business models for existing products.

 

Go further and discover 6 examples of Open Innovation in practice in our ebook.

discover the ebook

 

 

 

Open Source VS Open Innovation

Open Source and Open Innovation

We are often asked the difference between Open Innovation and Open Source. And many people confound the two. Let us try to clarify the links between these notions. We will take the opportunity to introduce others (Open Hardware, Open Data, Open Access etc.)

Open Source

Let’s start with the Open Source movement, since it precedes the Open Innovation. This movement was born in the ‘80s around MIT in the United States. It is a reaction to the rise of software vendors emerging in the ’70s. They develop software irrespective of hardware manufacturers and sell it against licenses. So they protect their software and it is often impossible to change what they have developed. Richard Stallman, then a researcher at MIT, reacts against what is a trend opposite to the ‘supporting and sharing’ philosophy of the community of developers and creates a project called GNU, aiming to develop a “free” operating system. He creates a foundation (Free Software Foundation) and writes a manifesto to encourage other developers to join. The first visible success of this initiative will be the Linux operating system which is used today, for example, in all smartphones based on Android.

 

 

A few years later, in 1998, the Open Source Initiative (OSI) was born in California. This initiative is especially designed to remove the ambiguity of the English term “free”, which means “libre” (freedom) but also “gratis” (zero price). Open Source promoters don’t deny the economy around the software. Instead, it will rely on paid services (maintenance, improvements, adaptations, etc.) provided together with the software whose licenses are free. OSI clarifies the definition of Open Source and codifies the requirements for a license to be considered compatible. For example, it must allow

modifications and derived works, and must allow them to be distributed under the same terms as the license of the original software.

 

Open Innovation

The term Open Innovation appeared in 2003 in a book published by Henry Chesbrough. The Open Innovation combines the practice of innovation relying deliberately outside the company in order to improve efficiency or to better promote innovation efforts internally. Chesbrough in his book makes a synthesis of practices which are not new. For example, the use of external knowledge via “gatekeepers” is already identified by Thomas Allen in the ‘60s. Von Hippel in the ‘80 identifies the advanced users (“lead users”) as a key resource to develop disruptive innovations. Overall, Open Innovation promotes the development of flow of knowledge and ideas during the innovation process:

 

  • between the company and its environment, in order to allow better sharing of risks and rewards with external partners;
  • within the company itself, in order to allow greater involvement of all company employees.

 

We believe that the real novelties related to Open Innovation were not yet fully in action when the term was coined: we should rather focus on the most recent developments of information and communication technologies to find new tools and practices. They rely on social networks, e-commerce, semantic web technologies, free access data (Open Access, Open Data), etc.

Differences

From the preceding introductions, it is clear that Open Source and Open Innovation are very different concepts. Let’s mention four important differences.

  1. First of all, regarding the objects involved: software for the Open Source; any type of product or service for the Open Innovation. This difference could partially fade away in the coming years since the production of physical objects is now tackled by derivatives of the Open Source movement such as the Open Source Appropriate Technologies (OSTA) or, more recently, by the Open Source Hardware.
  2. Next, regarding the economic and legal framework proposed. The Open Source provides a framework for economic exchange and an intellectual property policy. Open Innovation leaves these questions totally open. Nothing, for example, defines the conditions for participation of a “lead-user” or of an expert to an Open Innovation challenge.
  3. The weight of the actors. In Open Innovation, the terms of exchange above are often dictated by a large company or defined though a specialized intermediary. These intermediaries don’t really exist in the Open Source since the production and provision of the code may be done via computer servers (forges, repositories).
  4. Finally, the diversity of Open Innovation contexts is huge whereas Open Source covers software development or improvement. Companies use Open Innovation for very upstream projects (ideation, ideas competition), as well as problem solving, improving existing products, mounting research projects, etc.

Common points

But there are also strong commonalities between the two. We will mention four.

  1. The displacement of company borders. Both approaches call into question the boundaries of the traditional business, emphasizing collaboration, sharing, decentralization. They lower the barriers of language and geography (although there is a strong dominance of English and the United States), thus allowing a global flow of ideas and information;
  2. Open Innovation and Open Source value what is today called collective intelligence, recognizing that “the whole is greater than the sum of its parts”, that diversity, independence and decentralization of opinions and ideas allowed by the internet provide access to a richness which was difficult to implement before;
  3. An important element of motivation is the desire to work for the common good. This concern is probably stronger in the Open Source movement (and especially in the Free Software), but we often find this motivation among participants in Open Innovation processes, whether experts, employees or individuals;
  4. Finally, the information and communication technologies play a key role in both the access to information and knowledge, in the production and proliferation of data, and in the circulation of ideas. The Open Access movement promotes unrestricted online access to peer-reviewed scholarly research. This enables a better flow of scientific ideas that need to be read and criticized in order to progress.

open source vs open innovation idexlab infography

Possible convergences?

Are the difference meant to disappear and could the two notions, Open Source and Open Innovation, converge? We’ve seen that Open Source initially focused on the software, but it inspires other movements around products/hardware. On the other hand, the total absence of a common reference framework in Open Innovation in the current state is a weakness. It is today compensated, for example, by intermediaries, but it would probably be appropriate to launch a reflection on some basic rules aiming for example to protect the interests of the contributors to ideas, information and knowledge.

 

We bet that the commonalities that unite the two practices and are expressed in many other emerging practices are a strong enough base to make the theory and practice of Open Innovation evolve. Open Innovation is still young and lacking guidelines.

THE GOOD EXPERT

WHAT IS A GOOD EXPERT AND HOW TO FIND ONE?

The experts are essential to our businesses, particularly those wishing to innovate. Innovation often requires, starting from market and customers’ expectations, to answer new questions. Experts have knowledge related to their education, experience and practice. They can therefore propose relevant solutions to these issues as they fall within their area of expertise. They are the embodiment of state- of-the-art in their field. Companies seeking to innovate need them. Unable to control all areas internally, these companies must learn, in our connected world, to seek external experts who can enable them move forward. It is this need that is addressed by innovation and expert detection platforms such as ideXlab’s.

However, finding the right experts for a given domain doesn’t necessarily happen by itself. And besides, what exactly is a “good” expert? And how do we find one?

The “good” expert

We can illustrate our answer to the first question thanks to the Venn diagram in the figure below.

 

the good expert

Experts who can answer a question asked by a company must have three qualities: be competent, of course; be available to interact therewith; be open to adapt their competencies to the company’s issues.

Availability. It often happens to find an expert who seems ideal on paper, but not available: he/she doesn’t have time or simply doesn’t feel like getting involved. This crippling lack of availability reduces the expert to a phantasm for the seeker. Einstein in his time would certainly have brought joy to hundreds of companies but he was too busy to devote time to them. Nowadays, certain university professors, for example, who are authorities in their field, won’t have a minute to spend for companies searching for answers.

Openness. Certain experts also lack the openness needed for this type of exercise. It is really rare that the question asked to overlap exactly the areas mastered by the expert. The expert has to carefully examine the issue prior to tailoring its response to the context of the company, also to show empathy and listening. He/she may have to agree to add other competencies, for example to industrialize his/her solution. Otherwise, he/she will propose a dogmatic and theoretical answer which will be eventually difficult to integrate within the company. These qualities, which are often found in this population, however, are not systematic.

Competency. Finally, the proliferation of open platforms allows everyone – both experts and non- experts – to propose solutions to problems, thus making it possible for curious and available individuals to offer their services. Unfortunately, their proposals are often a waste of time for the company at the origin of the issue, as they don’t have the depth needed to provide real added value. Moreover, the competency is based on knowledge which is not absolute and may be controversial: a reputable real knowledge at a given time can, for example, be rebutted by the advance of science. It is therefore recommended not to engage with only one competent expert, but with several.

The “good” expert thus meets these three qualities: availability, openness and competency.

How to find the ‘good’ experts?

On the ideXlab platform, we take into account the three qualities mentioned above.

Firstly, the competency is ensured by the analysis of digital footprints left by the experts we seek. These digital footprints, for example, are the fruit of scientific publications (reviewed by peers) or patents (reviewed by trained patent experts) that guarantee a high quality content. The competency of our experts is evaluated automatically by our algorithms and takes into account the bibliometric data and their social network environment.

Secondly, the availability: we contact simultaneously several experts who are carefully selected, but rarely solicited because of their overall number (we estimate we can contact more than 10 million experts worldwide) and the accuracy provided by the analysis of our algorithms. Too many platforms now contact too often the experts they have in their database. The quality of their responses deteriorates over time. The experts who meet the demands of ideXlab do so because they are interested in the question they are asked, and because they feel able to provide the resource for answering or contributing. Others – not interested, not available – don’t bother to answer and that’s fine as well!

Finally, the openness: we calibrate our expert engagement campaigns to systematically interact with several of them in order to ensure a diversity of responses or opinions. The interaction facilitated by the platform also allows to very quick understanding on the basis of simple questions, the degree of the expert’s openness of and his/her ability to adapt to the context of the company.

The “good” expert is the rare resource of the innovative and competitive company in the 21st century. Fortunately, current technology allows for easy identification and linking. This is a significant step forward towards a more rewarding and effective collaboration between industry, academia and the world of experts in general.

 

Open Innovation Examples

This article proposes a few examples of companies that have chosen the path of open innovation.

Innovation is more than ever in the core of the corporate strategy, no matter what the size of the company is. The intensification of competition in a global economy requires new innovation forms and capacities. Nowadays, a company that doesn’t innovate is jeopardizing its existence.

The men and women that lead the big companies are aware of that. But if we say innovation we also say investment. And companies, especially in a time of economic downturn, don’t have the means to allocate colossal amounts to research and innovation.

This is when open innovation makes sense and becomes important.

In this article, we would like to list a certain number of examples of companies that have chosen the path of open innovation.

PSA Peugeot Citroën

In 2011, the French car manufacturer has launched a collaborative project to design the cars of the future and aimed at multiplying the company’s partnerships with scientific laboratories all around the world.

This project materialized into the creation of a network of OpenLabs. These structures are designed to allow the encounter between the group’s research centers and the external partners. They have a goal of thinking about the future of the automotive industry, particularly according to scientific advances. For example, a partnership has been established between PSA and the Institute of Movement Sciences of Marseille.

Other Open Innovation exmaples follow.

Coca-Cola

It’s well-known that Coca-Cola keeps the recipe of its famous drink secret. That is probably why the American company didn’t choose open innovation for developing its products. However, their program “Shaping a Better Future” allows internet visitors to suggest solutions to real society problems (for example unemployment or the environment). Afterwards, Coca-Cola selects the best project and offers its author $50,000 to put the project into practice. The winner is selected according to the intrinsic value of the project but also according to the number of votes it had received. To obtain the greatest number of votes possible, Coca-Cola encourages the authors of the projects to share them on social networks, especially on Facebook. This program obviously aims at improving the image of Coca-Cola. An open innovation project can also do that!

Briefly, more open innovation examples:

➔ The Audi car manufacturer has launched the Audi Production Award. It is a contest that invites the participants to think about the car of the future. The winner receives a trophy as well as 5,000 Euros.

Procter & Gamble  has published the list of technical problems that their team wasn’t able to solve or hasn’t solved on time on its website. They make a call to all the web surfers who may have the magic solution. Every idea is welcome!

➔ GE have launched their program Ecomagination Challenge. Its goal? To collect ideas from entrepreneurs, students and any other innovative people, regarding problems connected to energy.

➔ The HP (Hewlett Packard) IT company has created open innovation laboratories for allowing worldwide researchers to work together and for initiating partnerships between the HP teams and external scientists.

➔ The Danish Lego Company has gone the longest way on the path of open innovation. And this is already happening for many years (MindStorms, Lego Ambassador, Lego Factory and lastly the Lego Cuuso…). It’s no surprise then that Lego is often nominated in open innovation studies. In every one of their operations/programs, Lego makes a point of honor by having their fans participate in the evolution of their product lines. Nothing could be more efficient in bonding the Lego community, made out of young and less young people.

➔ Local Motors is a start-up created in 2007 by a former marine, Jay Rogers. The design of a new car requires years of work and generally costs millions of Euros. To save time and money, Local Motors has decided to use crowdsourcing. Its original approach has allowed this small company to conquer important market shares. The fortunate winners of the industrial design contests could also receive royalties from the car sales.

As we can see from these examples (there are still many others to mention…) open innovation has multiple advantages and surely has a bright future ahead of it. It offers advantages in terms of efficiency and in terms of savings and as we’ve seen in the Coca-Cola example, also in terms of brand image.