Understanding Open Innovation

Historically, research and development departments within organizations were solely responsible for coming up with innovative ideas.

Two IT technicians looking at a computer screen together.
Traditionally, corporate innovation has been an inside job, with few exceptions.

Things have changed with the digital revolution, however, and the boundaries shielding organizations from outside ideas have become more permeable. The ultimate result is open innovation, the concept that good ideas come not just from within organizations, but from outside them as well. Open innovation means that organizations can and should use innovations that come from outside as well as inside, to advance technology, save costs, and go to market with new products and services more quickly.

“Outside” may include an organization’s partners and suppliers, competitors, or even the general public, because it has become clear that combining internal and external ideas advances the development of new technologies and delivers new ways to create customer value.

Why Open Innovation Is Emerging as a New Paradigm

The erosion of closed innovation has been happening for several reasons. So much knowledge exists and is shared outside of formal research organizations that the general public (or subsets of it, like college students in a given field) can be a source of transformative ideas. Furthermore, people change jobs and take their knowledge with them, perhaps to a supplier or other potential open innovation partner. Mostly, however, open innovation has gained traction because it has the potential to deliver on the promise of transformative and disruptive ideas.

Flexibility Required to Overcome Political and Cultural Hurdles

This is not to say that with open innovation, political and cultural barriers magically go away. Just like innovations that take place completely within an organization, innovations and ideas gathered from open innovation processes will bump up against turf wars, self-appointed “gatekeepers” and the like. This is one of the main problems holding back adoption of innovative ideas.

However, it is possible to overcome the reflexive bias many organizations have against ideas that come from outside. Flexibility and trust are necessary, and open innovation projects must deliberately cultivate these qualities to create consensus and maximize the opportunity for acting on innovations and ultimately getting them to market.

Two businessmen shaking hands.
Building in flexibility and trust from the beginning helps overcome political and cultural obstacles to innovation.

Strategic Actions to Promote Flexibility and Trust in Open Innovation

Open innovation research by business and innovation experts in Amsterdam found that five key strategic actions cultivate flexibility and trust in open innovation projects, ensuring that more great ideas are carried out and implemented:

  • Creating a multi-layered network – to get more people, at more levels, on board with an open innovation project and reduce “silo” thinking
  • Promoting equal ownership – so that all stakeholders feel ownership and responsibility for an idea that is chosen for development. Specifically encouraging discussion and collaboration (perhaps using messaging systems like Slack) helps everyone monitor progress and be involved.
  • Establishing interim milestones – because “staging” the innovation process increases transparency and helps the project feel less overwhelming
  • Allowing the initial concept to be shaped during development – so that the idea can be improved upon, while retaining core tenets of the idea
  • Prototyping early – because presenting something tangible can help convince stakeholders of an idea’s value and help them articulate concerns and feedback while the idea is still in a more “fluid” stage

The time for open innovation has come, as organizations realize the value of setting aside egos and working together to create, transform, and disrupt. Doing this successfully requires gathering data and ideas, prioritizing and vetting those ideas, and having a platform for selecting the best ones for further development.

IdeaScale is an innovation management platform that gives you the tools you need to do exactly this. You can launch your innovation community, network and socialize about innovative ideas, and most importantly, propel the best ideas through to full implementation. Want to know more? IdeaScale invites you to start an IdeaScale community.

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