Are You Open to Open Innovation?

Open Innovation is the exact opposite of the innovation that has traditionally occurred - and still does occur - in many organisations. As we all know, traditionally innovation has been very 'closed' in the sense that everything happens almost secretly within the organisation. Maybe the R&D department comes up with a number of ideas, before these are then whittled down and eventually a product is created and taken to market. Open Innovation, on the other hand is a much more participatory and more decentralized approach to innovation. It is based on the idea that knowledge is so widespread in this day and age that no company, no matter how resourceful can really innovate on its own.  

Henry Chesbrough, credited as being the originator of open innovation, describes it as a way of making greater use of external ideas and techonologies within an organisation - and on the flip side letting others outside your own organisation use ideas that you have decided not to pursue. In this model, ideas are generated through your own R&D but also from programs your organsation has developed to leverage ideas from outside, through the likes of universities or startups. This is a process that big techonlogy firms in particular are using today. Organisations, like INTEL, would then also build platforms so that others can build upon or take advantage of their technology. This 'openness' is not just restricted to the ideas phase i.e. ideas coming in to the organisation - the 'openness' also carries over to when ideas are coming out and being taken to market. For example, internal ideas that are not being used by an organisation could be taken to market through the likes of join ventures and licences.

While big technology organisations like INTEL or HP with their "HP Labs Open Innovation" are using Open Innovation, we are seeing it in many different industries. Big FMCG organisations like P&G use their "Connect & Develop" program to invite external innovators and companies to submit innovations. P&G claim that their open innovation strategy has "enabled us to establish more than 2,000 successful agreements with innovation partners around the world". The Bounce fabric softener is once such successful story, where an inventor developed an innovative fabric-care solution that P&G licensed, combined it with existing P&G R&D work and then brought the product to market.