Open Innovations as an Answer to Organisational Challenges
There are reasons for the expansion of open innovation. It is a much needed paradigm shift. For some proponents it is even the only way to solve complex problems in the future. Companies, R&D departments and university research centers, among others, certainly have achieved great breakthroughs in the past. But they have also prevented many great ideas from flourishing or have denied opportunities for other ideas to be exploited. The American computer science professor and entrepreneur Alex Pentland describes in his book “Social Physics: How good ideas spread”, how limited internal cooperation and separated research teams can hinder innovation even in the case of highly innovative companies. Open networks, not companies with hierarchies offer ways for innovation.
These new forms of innovation and business development are much needed as the traditional way of innovation is no longer as efficient. In our competitive era we can not afford wasting creativity, capacity and our colleagues’ expertise. Today, knowledge is the number one resource we need to be in the vanguard.
Proponents of open innovation identify manylimitations of its opposite, which is “closed” innovation:
- Quality: The expertise found within a company or organisation is not always sufficient to guarantee state-of-the-art knowledge. One can always draw upon external expertise.
- Resources: Even larger businesses can not always provide adequate resources for research and development.
- Analysis: Customer-focused products need a holistic view on their potential use, which a company can not assess entirely just on its own.
- Networks: Time and again, organisations fail to provide even an internal culture of sharing and exchanging that allows ideas to flourish.
- Creativity: In traditional structures, mentality is heavily compartmentalized. Their expertise is defined by roles and positions, which hinders creativity; this is contrary to interdisciplinary approaches.
- Business model: Ideas often need their own business model. Many companies do not pursue ideas that don’t happen to fit in their business model. Some ideas also might require a non-profit model.
Whereas in the past only larger organisations and companies had access to valuable information and important circles, nowadays small and agile actors are competing with just as great or even better products and inventions. Businesses with traditional organisational structures in particular are confronted with above challenges because a culture of resistance to outside innovation persists. This is also known as NIHS (Not Invented Here Syndrome). Today ideas develop in a global knowledge network, which bypasses any corporate firewall. Organisations that do not open up risk losing a huge and innovative potential. Only few companies are able to reinvent themselves, producing a constant flow of ideas and implement these successfully; some of these rely on external expertise including for product innovation. In this regard, successful companies turn their communication strategies upside down, rendering their boundaries more flexible by letting almost every employee engage in a dialogue with customers, stakeholders, and staff in other departments and in higher positions.
Organisations that network find themselves immersed in a large web of knowledge flows. The more nodes a network contains, the more potential it has. That is a radical shift for intellectual property. Open innovation raises also important questions about the concept of intellectual properties and those experimenting with new business models that spur economic development. The electric car company Tesla recently announced plans to making all its patents accessible to the public. By doing so, it provides expertise for potential partners and competitors. But it also brings external innovation into the organisation. A serious business sharing its most precious competitive advantages such as inventions underlines the revolutionary approach behind open innovation.
The “open source software” movement is acting as a good example to follow as more and more companies and organisations are taking advantage of open innovation. Such is the case of the social programming platform Github.com, on which software can be shared publicly, allowing anyone to change and improve the programming codes. Knowledge society’s main goods are immaterial and can be digitalized, exchanged and be worked on in collaboration. Today’s consumers are also more than just buyers. They are co-creators getting involved in product development as well, for example in sketching a chair, using the free, open-source software SketchChair. The Fablab movement with its focus on easy, home production thanks to 3D printer technology opens up a whole new innovation potential, whereby products are not only invented anywhere, but also quickly produced even in small amounts or for quick fixes everywhere...
About the Author
Christian Kreutz is an author, speaker, strategic advisor and expert in open and social innovation. He has been advising for over 10 years organizations such as the World Bank, GIZ, UNDP, Nesta, Deutsche Welle and the Bertelsmann Foundation, providing them with the necessary insights and tools to build their corporate innovation capabilities. As the director of Crisscrossed GmbH, he has developed various projects such as WE THINQ – a social software for change makers to empower citizens, employees and stakeholders to asses challenges and find creative solutions through new forms of cooperation. He believes in the power of transparency and holds the potential of open and shared knowledge as the foundation for sustainable innovation. He writes about his journeys on social innovation and the use of information and communication technologies centered on people on his widely cited blog www.crisscrossed.net.