Open Innovation: Why?
In today’s complex market environment and competitive industry, innovation has become a synonym of success. Often this is done without understanding the innovation process and how innovation by itself is not enough to achieve this success. Not without the proper guidance and preparation to harvest quality ideas. In order for the firms to really add value to the products it is seeking to improve.
In contemporary innovation schemes we have two main branches for the use of innovation. The first one would be “Lead User innovation” this branch focuses on identifying the users of the product that have deep knowledge about the need that this product is satisfying and most likely had this need even before the product was launched. The two main characteristics this type of users have are ‘(1) They face needs that will be general in a marketplace – but face them months or years before the bulk of the marketplace encounters them; (2) they expect to benefit significantly by obtaining a solution to those needs’ (von Hippel, 1986, 1988).
The second approach to innovation would be that of Open Innovation which is characterized by opening the innovation process to external inputs by stakeholders. This is done by taking into account the companies ecosystem, working with customers, suppliers, academic institutions, government agencies, and even competition. Contrasting with past models like closed innovation in which the company would rely on its Research and Development department to generate innovation.
The importance for companies to understand this innovation mechanism relies on identifying what type of problem or necessity is out there for consumers and determining which of these methodologies has the best tools to achieve their goals. In this we have to remember that innovation is not a goal in its self but the means to achieve profits for the company. For example with complex products it would be better to use lead users which have a deep knowledge of what the necessity is and what type of innovative ideas really adds value to the product as well as complementing it with open innovation in for bringing suppliers and internal agents to determine best, what needs to be done and what is feasible for the supply chain and the companies actual capacity to deliver the new/improved product (Ex. Clusters were companies of the same ecosystem situate on the same site to improve information transferring and innovation throughout the supply chain.) While for brain storming and the generation of completely new products and services it would be better to use an even more open innovation model were you would include all parties and a vast use of costumer ideas to generate new views and consider needs that have to be satisfied but have not yet been detected, and they are new market opportunities.
References:
Hippel, E & Riggs, W. (1996). “A Lead User Study of Electronic Home Banking Services: Lessons from the Learning Curve.” MIT. from http://web.mit.edu/evhippel/www/papers/evh-01.htm.
Lindegaard, S. (2011). “Making Open Innovation Work.” Stefan Lindegaard. http://www.15inno.com/2011/10/28/free-book-making-open-innovation-work/.
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12 feb 2012
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Javier Solano Palacios
IMSD /
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