We've all heard the term "innovation" - ad nauseum, even. But what exactly is "open innovation" all about? Does that mean regular old innovation is somehow closed? Is innovation something that opens and shuts? What gives?
And this sentiment is understandable. Buzzwords can be confusing. So let's get it straight: Closed innovation is a way to describe the traditional model of generating added value. In many cases, new concepts emerge inside of institutions, under the pretense that our knowledge and experience are our greatest asset and our exclusive property. In this model, new ideas are subject to a selection process that determines which have the greatest chance of success. This "thinning the herd" so to speak, often leaves many brilliant ideas on the cutting room floor based on subjective decisions regarding their potential viability, scalability, desirability, or other -ability. The herculean effort put forth in generating these concepts is fruitless; the human energy mostly wasted.
Open innovation, however, turns this concept on its head. It runs on the belief that the need for proprietary knowledge or niched expertise to be in place before starting -- because someone out there has the technical and theoretical knowledge needed to solve the problem, and will share it. Additionally, ideas that aren't immediately useful shouldn't be discarded, as they may be used elsewhere, for a different problem.
Intriguing? Here are the seven components that are crucial to ensuring success with a foray into open innovation:
1. Common Language
This is the understanding between the company, institution, or otherwise "sponsor" entity, and those with whom they're engaged in open innovation. There has to be a common understanding of what the problem entails and the parameters inside of which an effective solution. Those concerns, along with a crystal clear understanding of intellectual property rights are a must-have from day 1. This is the only way to avoid conflicts and complications later down the line.
2. Assets, needs, and ecosystem
These are what the company must analyze on what they have in store and what needs to be gained before going any further. They must analyze what assets they have in terms of monetary compensation, written and physical resources, as well as human resources. This will provide a way to understand what is lacking, and the priority in which these thing should be addressed. This is to be able to lay the foundation of the ecosystem that is to be created for a proper culture for the open innovation to survive in.
3. Value pools and channels
Value pools and channels are fancy ways of saying "where the external sources for open innovation come from" and contrary to popular belief, it does not always come from a 3rd party. Some are created by the company itself, like an A4 being torn from the corner and given the freedom to exist on its own. Examples of pools are:
- Employees
- Alumni
- Suppliers
- Academics/institutions
- Start up
- Government
- Inventors
- Competitions
It is said that even large companies and conglomerates can handle only 3–4 pools at one time efficiently.
4. Internal readiness
This is getting the company ready for the open innovation, which mostly involves evaluating the mind-set. Because open innovation is not a tool or goal but a new approach to a problem all together. It is, in essence, a culture shift. This change can be big, more challenging with large, established companies deeply rooted in their norms and expectations. This readiness can be done by gradually training and giving skills and providing knowledge to executives for their understanding.
5. External readiness
External readiness is a measure of the industry itself, and its preparedness for open innovation. Inside of industries like cell phone manufacturing, where products are out each year, ideas are needed quickly. As a result, it's more primed for open innovation than others. So one must plan accordingly either being a disruptor in their industry or waiting for others to take the leap and learn from them to improve your strategy.
6. New skills and mind set
This is giving the skills to the company and creating the mind set needed for the change and accepting the fact that not all the best ideas and concepts are coming from the company so they must look elsewhere. This is hard for others due to pride others.so getting that sorted beforehand is essential also the ability to train the new people the skills and the way of life and culture to them for them to properly tune their work to the company specifications also there is a delegation of work to be done for the various aspects of open innovation. Some for the discovery some for the incubation and others for the acceleration this is to find and develop the right people and gain the right key characteristics and traits
7. Communication
Finally, there must be clear communication internally and externally of what is being done, what has been done and what has to be done. Also the deal must be clear from the onset from the legal end to the contract to the copyright. A clear communication must be there with open channels on what will happen if the project fails and if it succeeds how will the success will be a distributed profit wise and recognition wise also.
