Moving to an open innovation model

So far we have taken a very positive view of open innovation, with an understanding of the various risks that it includes. We’ve seen that the benefits are not confined to product innovation, but expand to processes and services.

So how can it be done? What are the key steps to convert from a relatively closed model of innovation to one that is more open? How can resistance be overcome?

As with many of the issues that we have discussed so far, there is not one way of achieving this and as a result there is no set route. Nevertheless, the following steps are likely to be common:

• Develop the necessary skills for open innovation. These may vary and will depend on the capabilities the organisation has already developed. The ability to communicate and identify opportunities for improvement are frequently cited as key for achieving a status of openness.
• Provide incentives for engaging with open innovation and integrating with external suppliers. Often incentives for improvement are relatively local. For instance, sales staff are rewarded for increasing sales and operations managers for making processes more efficient. Converting to an open model would require the use of incentives that reward individuals for engaging with external parties and bring in new ideas.
• Explore ways of improving absorptive capacity. Open innovation and cooperation with external parties may be already happening. That is the organisation may be able to acquire external knowledge and then convert it to commercially viable products or services. Identifying where this happens and supporting it is a key step to converting to a focused open innovation model.
• Strengthen processes that help to learn from mistakes, eg complaints from customers and concerns from suppliers. Often organisations have systems in place for acquiring feedback from customers and input from suppliers. Such processes may sometimes be used as a means to allocate blame and as such they are seen unsympathetically. Yet, they serve as an excellent source for identifying ideas for improvement. First, they help identify areas of weakness and second they help develop a close relationship with customers and suppliers who are willing to share their views.

The above steps can help develop an individualised approach to the integration of open innovation. However, many of these may require a significant change to organisational culture.

In the next activity you will explore how such an approach can be implemented in an organisation of your choice.

Further sources of information

There is some useful information about the skills needed to implement open innovation in this report: How to Implement Open Innovation: Lessons from Studying Large Multinational Companies, produced by the Institute of Manufacturing within the University of Cambridge.