Open Innovation

| March 3, 2012 | 3 Comments

Successful companies and successful public agencies make things happen.  The enterprise that is not in pursuit of new products and better services will soon become extinct.  Consistent innovation is a top priority with the planet’s most successful businesses.  Innovation is what distinguishes companies of all sizes.  The dedication to be better permeates the culture of enterprises around the world.  Innovation is the cutting edge that small, medium and large businesses need to survive and profit.

The inventor and developer of open innovation is Henry Chesbrough, PhD from Harvard. In 2003, Chesbrough defined closed innovation as an internal business strategy where the private or public entity chooses to develop goods or services independently.  All research remains the secured property of the entity where loose lips can sink ships.

Chesbrough described open innovation as the process that engages entities and businesses from different sectors in the common pursuit of a product, service or idea.  Companies participating in open innovation are cooperative.  Open innovation teams share research. They develop marketing strategies. They collaborate on technology and anything necessary to advance an existing product line or to create new products.

While open innovation can include collaborative efforts between competitors, the most common use is between enterprises that provide different services and who can accomplish a project that translates to profit for all parties.  There are now many of these collaborations in the works and many that have produced startling results.

Open Innovation Sample 1

One open innovation success took place at The Children’s Hospital of Boston.  The chief of surgery, Dr. Pedro del Nido felt that children were adversely affected by probes into the heart.  Del Nido set about finding a less invasive and less traumatic procedure. The doctor used technology provided by a digital gaming manufacturer to invent an amazing device that is as close to non- invasive as can be. To top off the collaboration, the navigational system of this patented device is a joystick! 

An offshoot of open innovation is called crowdsourcing.  Many companies already use this strategy without realizing it.  The concept is designed to tap into the “collective intelligence” of the participants for skills, ideas, research and strategies to design, market or create new products or services. If utilized properly, crowdsourcing can provide valuable insight into how the public feels, reacts and interacts with the ideas that drive the collaboration. Participants often volunteer for crowdsourcing projects.  This is the most inexpensive way to make the public a part of a growing enterprise.

Crowdsourcing Sample 1 

Apple is probably the foremost example of effective crowdsourcing.  While Steve Jobs guarded his technology, he was the master of crowdsourcing.  Consumers of Apple products provided the company with feedback on all its products.  Jobs responded to this input by designing technology products that always seemed to be ahead of the game.  The end result is the most innovative business in the world.

Crowdsourcing can occur with open innovation teams from competitors, suppliers, marketers, research firms, universities, physicians, educators and any other entity that the open innovators deem necessary. It is important to know that companies can be very protective of important information but can still bring something to the innovation table.  Again, Apple is a perfect example of closed and open innovation co-existing in one company culture.

There are several keys to creating an open innovation culture  The first is to convert a company culture from a strictly closed innovation strategy to either an open innovation strategy or an open/closed combination.  The company must establish guidelines about conduct and the use of sensitive material.  Most importantly, each entity must have teams that are on message and willing to exchange research and ideas.

As businesses have come to understand the success of this strategy, the number of ongoing open innovation projects increases every year.  Henry Chesbrough has been commissioned by the economically challenged European Union to develop an open innovation prototype for its 27 member nations.  Think about that.  Chesbrough is charged to create an open innovation platform for 27 countries with entirely different objectives that will please 27 legislative bodies that seem unable to agree on the day of the week.  Yet, they agree that the solution to an economic turnaround lies in open collaboration between their countries.

Public Innovation Example 1 

One of President Obama’s first Presidential Orders required each government agency to implement an open innovation policy and work with other agencies to eliminate duplicate policies, research and waste.  This mandate has been especially effective in the fight against terrorism, in the environment and in the recovery from the recession.  

Some companies have been slow to get onboard the new innovation concept. It is understandable that changes in corporate culture face certain skepticism. In a recent panel discussion at the Sloan School of Business Management at MIT, a student explained to the panel that he was afraid to reveal his newest project to anyone because Google might steal the idea. One panelist offered this quick response.  “Ideas are cheap.  Bringing them to market is where the money is.”

Harvard has recently launched an innovative collaboration with the venture capital firm Legacy Investments.  Students from any university can meet with venture capitalists at the campus and apply for $250,000 in seed funding.  The successful applicants will have full access to the university labs and other assets.

Facing billions of dollars in expired patent rights, pharmaceuticals are looking for collaborations with universities and other research enterprises to find new products.  Human resource departments, manufacturers, importers, exporters, management teams, educators, medicine, life sciences, the arts, sports, environmentalists, life scientists and just about every sector of the economy has open innovation alliances at work.

 

Open Innovation Example 2 

Another miracle collaborative effort occurred when a 36-year old man was hospitalized in Switzerland. The patient had cancer in the windpipe.  He had not spoken in eight weeks. The hospital took 3-D images of the windpipe and sent the images to the London School of Medicine. There, the surgical team created a delicate but exact replica of the windpipe and sent it to the Swiss hospital.  In the meantime, the hospital had harvested stem cells from the patient’s nose.  They submerged the new windpipe in the cells and waited two days.  They then removed and replaced the damaged windpipe. The patient said thank you as he left the hospital in seven days.  

As private and public entities forge new innovative practices, one of the biggest boosts is that research and development costs are trimmed significantly.  Despite these bottom line savings, businesses of all sizes are ginger to engage this strategy.  For progressive for-profit and not-for-profit enterprises, the future to profits and 21st century solutions lies in open innovation and companies that emerge from their tight-knit cultures.

 

 

 

 

 

 

 

 

 

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3 Comments on "Open Innovation"

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  1. i love your blog, i have it in my rss reader and always like new things coming up from it.

    [Reply]

    Hiland Doolittle Reply:

    What would you like to discuss

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    Hiland Doolittle Reply:

    Thanks, new post today. Stay in touch. Hiland

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