Open Innovation From A Practitioner's Perspective

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Principles of Open Innovation

The new innovation paradigm requires a dramatic shift in the attitude of companies and individuals towards innovation. As discussed earlier, this shift in attitude is no longer an option for many industries.  The forces of change that come with globalization and more demanding customers are here to stay.  For many companies it is now a matter of survival.  Yet this new landscape also brings great opportunity, at a level never before imagined.  As you prepare yourself and your company, keep in mind the following seven guiding principles:

  1. Develop More Transparency[1] – starting with your own company, look for ways to share information and build trust with all of your employees and be sure to demand the same from them.  Make your organization as flat (and non-hierarchical) as possible. With your outside world of customers and partners, look for opportunities to open up or share information beyond the basic transactional exchange of information.  Intuit holds an annual Entrepreneur Day where they invite customers to spend a day with Intuit senior management in an open idea exchange.[2]
  2. Engage with networks – we live in a highly networked society and the employees (and customers) of tomorrow will have spent their entire lives in this networked world.  Be aware of the value of these networks and encourage your employees to actively participate in professional networks, blogs, and other social media.  There is a wealth of useful (and often) free information that is available.
  3. Embrace community – by definition, most successful networks have a sense of community or shared purpose.  This implies a certain set of norms and expected behavior for members of a specific community.  Interestingly enough, these communities can offer a great deal of insight and value to its members.  On LinkedIn alone there are over 3000 innovation-related groups.
  4. Competitors can be collaborators – this may seem a little unusual to some, but this new world of innovation should force you to rethink what defines a competitor and ways in which you can work together.  If you sell office productivity software, for example, are you competing against other software providers or is your bigger obstacle customer indifference towards your product?  P&G, for example, licensed a core plastic film technology to Clorox, a staunch competitor in certain markets, because P&G was no longer in the plastic film business.  This would have been unimaginable fifteen years ago.  Small companies can cooperate at certain levels to create entire eco-systems around new technology that can help raise the market opportunity for all involved.  Twitter is a good example of a recent innovation in social media that has spawned an entire ecosystem of new services, all benefiting one another.
  5. Discourage the “Not Invented Here” syndrome – nothing kills an idea faster than the belief that your company has all the answers and no possible expertise exists outside your company’s four walls. Time and again we have seen success stories that completely debunk this theory.  No single entity, regardless of size or scope, can legitimately claim to know all the experts in a given area. “Proudly found elsewhere” is a commonly used term to describe the new mindset you need to adopt.
  6. Engage with failure – failure is a reality and a necessary part of the innovation process. Failure today takes on a different context when you consider that one person’s failure is another’s success.  Use failure as an opportunity to re-frame the question or seek completely new sources of solutions.  Failure sometimes is the result of asking the wrong question or focusing your efforts in the wrong area.
  7. Get into the habit of maintaining a “memory” bank of successes/failures – the company should document all successes and failures to understand why something worked and why something else didn’t work. There may be opportunities in the future to bring those failures back to life.

[1] Transparency is defined here as: “Making the optimum level of disclosure for your partner to have all the information necessary.”

[2] For more information go to: http://smallbusiness.intuit.com/blog/where-small-is-going/2009/08/call-for-proposals-–-intuit-entrepreneur-day.html

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