If you’re tired of not being able to compete with bigger companies in your industry due to a lack of research and development (R&D) budget, the good news is that’s no longer a problem. Open innovation allows everyone to compete equally, whether their development budget is large or small.
What is Open Innovation
Open innovation is a paradigm shift that assumes organizations can and should use external ideas as well as internal ideas to determine as path to market and advance technology. Useful knowledge has become widespread and doesn’t always come from a centralized location within a single business, like the R&D department many organizations employ. This new way of thinking offers fresh ways to create value and can be used to collect ideas internally from employees or externally from customers or the public.
The act of implementation, of effectively turning new ideas into new processes and products, is now the primary differentiator between success and failure. Businesses still must take the new ideas and processes that are generated and do the hard work of converting promising concepts into products and services that serve customers.
Why Open Innovation is an Equalizer
Historically, internal R&D could be an organization’s greatest asset. Powerhouse companies could keep companies at bay simply because they could invest more in development, and as a result reap the highest profits.
Today, however, the Internet and information economy has changed the story. Businesses, even startups, are able to get ideas to market using a different process which includes crowdsourcing, crowdfunding, and implementation only after the market is proven. The boundaries between an organization and its environment have become less distinct, with the market impacting the company and the company impacting the market.
The Shift in R&D
R&D is shifting from internally focused to expansion outside of the department and beyond the organization’s four walls. While you can still have experts in the R&D department, you can also engage employees and external groups to solve any problem.
- Employee Open Innovation: Princess Cruises gathers thousands of new ideas, engages more than four thousand employees, and manages it all through one innovation team.
- Employee Open Innovation: Dick’s Sporting Goods was a runner-up in the 2016 Innovation awards. The company stays ahead of the curve when developing new products by using open innovation internally. A “Concept Locker” allows employees to submit product ideas, comment on submitted concepts, and win rewards for participating.
- External Open Innovation: TechSmith Software creates screen capture and recording software that is used in over 30 countries. Through open innovation, they were able to collect hundreds of ideas for improvements and upgrades, collect thousands of votes, and even assist the PR team with responding to inquiries.
How to Use Open Innovation in Your Organization
To use open innovation in your organization, you first must shift the mindset of the leadership and stakeholders to understand the crowdsourcing mindset. Once everyone is on board, consider implementing systems that help you prepare for the complexity of idea management. You’ll need a way to:
- Collect ideas from a diverse array of sources
- Organize ideas in one location
- View and evaluate new ideas
- Develop ideas
- Get approvals
- Communicate progress
Open innovation isn’t optional, it’s an essential way to bring in new ideas at a significantly lower cost than ever before. With the right system, you can gather ideas, process feedback, prepare ideas for implementation, and get funding approval, all within the same platform.
As you seek to implement or improve your open innovation programs, you’ll want to have a process in place to harness and vet the multitude of ideas. Our latest whitepaper shares guidance and best-practices from organizations who do it right. Download it today.