As companies struggle to do more with less in an intensely competitive marketplace, many are looking beyond their own walls for new sources of innovation. The interest in leveraging external innovation sources has grown over the past year with the publication of Henry Chesbrough’s highly popular book “Open Innovation: The New Imperative for Creating and Profiting from Technology”.
Open innovation is simple to understand in theory, but not always easy to put into practice. In this and a series of subsequent postings I’ll discuss five key strategies for making open innovation work for you and your company. These are strategies that I’ve developed in partnership with Luda Kopeikina, CEO of Equanex. We’ve developed these approaches from our own experiences as entrepreneurs and corporate executives. We’ve taught them to Fortune 500 companies as part of a workshop on Open Innovation and we’d like to share them now with a broader audience via innovation.net.
The Importance of Open Innovation
I’ve spent much of my career managing new product development and innovation. Yet even when I became a general manager of a business for Sunbeam, I struggled finding the balance between optimizing today’s business and investing in new, potentially disruptive innovations.
I think this struggle is best described by Costas Markides and Paul Geroski in their Strategy+Business article “Colonizers and Consolidators: The Two Cultures of Corporate Strategy”. In the article, the authors note that “the skills, mindsets and competencies needed for discovery and innovation are not only different from those needed for mass market optimization, they conflict…”. It’s a key reason that leading firms are recognizing the need to move beyond “not invented here” and focus on “let’s find the best ideas wherever they are”.
Introduction to The Five Key Strategies
As Henry Chesbrough says in his book, “Competitive advantage now often comes from leveraging the discoveries of others.” A.G. Lafley (CEO) of P&G has gone so far as to set a corporate goal for P&G of 50% of their innovation coming from the outside.
So how can you implement this imperative for open innovation in your business? Here’s where our five key strategies for implementing open innovation come in…
q Know what you want from open innovation
q Know the sources of new ideas for your market
q Know when to make your move
q Know your execution roadmap
q Know thyself
While they may sound a little cryptic without explanation, we’ll cover each of them in more depth in upcoming posts. Hope you find it helpful in your own business.