Jessica and Justin may be visionaries as everybody seems to be “open” today… in the business world!
Indeed, not a day goes by without discovering a new “Open Innovation” initiative in the media. Open Innovation is everywhere. It concerns everybody: major companies, startups, and henceforth even the public authorities. And no industry seems to escape it: health, education, telecom, transport, tourism and a lot more.
But how can we get our bearings?
This glory has in fact its ransom. Like any trend exploding in a couple of years – like “Big Data” or the “Internet of Things” – the word “Open Innovation” and its multiple corollaries are broadly used, and sometimes wrongly.
To make it even more complex, the words used are sometimes used in another language, or even mixed and translated with different words. As a result only a few people, even among professionals of the area, are perfectly mastering all the concepts of this Open Innovation ecosystem.
It is time to help you master the subtleties of this concept heavenly popular and understand the different notions gravitating around it.
The Open Innovation, is a process during which an innovation is born from sharing.
Two simple foundations underpin this concept:
- Collective intelligence is (widely) superior to the sum of individual intelligences
- Complementarity is superior to similarity.
External opinions from the one of the initial innovation instigator will enrich it with a non-zero value.
The 3 founding questions
Every Open Innovation process is then defined by the combination of the answers to the three questions the responsible has to ask himself:
- Who to share with?
Large companies, competitors, sector experts, researchers, authorities, startups, developers, beta testers, consumers
- What is the right level of innovation to share?
At many stages: the need identification, the ideas brainstorm to address it, the detailed project, the R&D, the conception, the prototyping, the marketing development, the global distribution.
- What counterparty for the invited contributors? (directly correlated to the Intellectual Property question)
Without counterparty, partnership, non-financial counterparty, financial counterparty with different forms such as a unique payment, a patent or a license.
You got it, Open Innovation is an extremely large concept. The way this process is set up within a structure depends on hundreds of possible combinations of answers to the three questions above.
A happy family game
It is his protean side which makes the Open Innovation concept so difficult to grasp.
That said, it is possible to identify 7 recurrent forms of Open Innovation that stand out, according to Martin Duval and Klaus Speidel, Open Innovation specialists and co-authors of “Open Innovation” in 2014:
- Problem solving
- Idea contest
- Idea boxes, portals, enterprise social networks
- Beta tester communities
- Open Source use
- Larges companies- startups partnerships
- Corporate Venturing
The opening duality
A clarification is necessary here. The Open Innovation has actually not one but two definitions. Indeed, the word « Open » can be used for one or the other definition of sharing. Thus, it means:
- Opening yourself to the world to innovate thanks to third party contributors.
Forms 1, 2, 3, 4 above.
We name it then « Outside-In » Open Innovation that shows the value brought from outwards towards the inside.
- OR opening your innovations already accomplished to make them available – which may look like a more disinterested approach – to a community that will benefit from your progress.
Forms 5 and 7 above.
This is the « Inside-Out » Open Innovation with an opening movement outwards.
It is worth noting that Form 6, large companies – startups partnerships, in essence, are intended to open reciprocally, in a balanced way and are therefore two-way.
I hope that you now understand better the objectives and modalities of this major trend that is Open Innovation.
In a next article we will detail the 7 principal form of Open Innovation in order to understand the respective benefits, the main players and successful recent initiatives.