The digitalization trend raises customer expectations across every industry, with enterprises increasingly influenced by and interconnected with innovations outside their traditional industry.
Companies are seeking many different partners to create innovative solutions and together position themselves at the forefront of this new market. In other words, they are participating in Open Innovation.
The Open Innovation model allows organizations to utilize external technology, solutions, knowledge capital and resources early in their innovation processes.
In many cases, organizations will partner with a range of players in a global ecosystem to jointly develop new platforms and applications, enhance core offerings, or expand into new markets.
The concept allows enterprises to look beyond their four walls to bring in ideas more quickly and frequently in order to enhance their operations—and also save time and money.
The term “Open Innovation” was first coined in 2003 by Henry Chesbrough, an organizational theorist from the Haas School of Business at Berkeley. The idea itself has been practiced for much longer.
So why has Open Innovation become so important—and why now? We see a convergence of factors highlighting a need for enterprises to make this part of core strategy.
Technology advancements, such as increased computing power, access to cloud infrastructure, open source code and platforms, and application programming interface (API) building blocks have reduced barriers to entry for new companies in many industries.
New ventures are moving from ideation to deployment more rapidly than ever before, meaning entire industries are competing with a new league of digital innovators.
Open Innovation is a major undertaking, but it also has the potential to lead to success and disruption.
To fully realize the benefits, we recommend collaborating with internal bridgemakers that act as the gateway to the external innovation ecosystem, as well as with external companies that act as bridgemakers.
When looking externally, an enterprise may benefit most by working with a bridgemaker that can make connections between major players in the innovation ecosystem; bring an understanding of both industry-specific and cross-industry trends into the discussion; and follow a methodology to guide an enterprise through the process to build, test and scale a series of solutions that transform the business.
We call this accelerated approach to Open Innovation performance “guided disruption.”
Bridgemakers play an important role in the Open Innovation Ecosystem.
Working with an internal group or external bridgemaker, enterprises can adopt Open Innovation, collaborate with an extended ecosystem of partners, and more quickly incorporate emerging technologies into their operations to drive business transformation while minimizing risk.
Enterprises need a constant, fresh supply of innovation to drive their businesses forward. Bridgemakers connect this demand-side with the supply-side, composed of the universities, R&D centers, start-ups and entrepreneurs who develop innovations that meet the needs of the market.
Bridgemakers can act as an intermediary to help connect an organization to the appropriate partner, act as a buffer between partners with conflicting cultures, provide support in mitigating risk and assist in piloting and deploying technologies.
To begin practicing Open Innovation and utilize resources effectively, factors to consider include:
Build the foundation - At the most fundamental level, the organization must foster a culture that supports Open Innovation and backs it up with investment. The larger a company becomes, the more difficult it can be to move quickly through new ideas, and the more important it is to create an environment where this can happen. Investment is key.
This includes leadership sponsorship, as well as proper incentives to help employees become comfortable sharing knowledge and technology with external parties. Many organizations establish a structure to support and incentivize Open Innovation practices, as well as external-facing programs and tools to successfully work with external collaborators.
Define business goals - The next step involves understanding the market and assessing how digital disruption in other industries could apply to the enterprise. Those on the outside can help identify what trends are happening in other industries, and how it may impact the enterprise. Based on this knowledge, the company can define high-level business goals and the technology innovations that will drive them.
Deploy - In this phase much of the work is done to take the initial success towards a broader deployment of the innovation towards the broader enterprise or their customers. Many organizations breeze through the discovery and development phases, but get stuck on the deployment stage