Open Innovation: Discovering a World of Ideas and Collaboration

Recently at EOI, my colleagues and I were given an opportunity to contribute our ideas on making EOI more sustainable. It was part of our class assignment and we were instructed to logon to an online platform where we could state our ideas and elaborate on the vision we had in mind. The ideas we uploaded were then shared with students from our class and with those of other Masters programmes at EOI as well. We commented and added on the ideas proposed by our colleagues, which resulted in a sort of online brainstorming where we were able to exchange thoughts and recommendations on the proposed ideas.

Through participating in this activity, I learned about the concept of “Open Innovation”. The term was coined by Chesbrough in his book “Open Innovation: The New Imperative for Creating and Profiting from Technology” (2003). It derives from the notion that companies have begun shifting from “closed innovation” processes towards a more open approach to innovation due to several factors. These factors include the increase of mobility and availability of highly-educated people, significant increase in availability of venture capital, and also the important roles of other companies in the supply chain. This new model of innovation differs from the traditional model, which placed more emphasis on research and development laboratories. The process of the traditional model involved trimming down large numbers of ideas and concepts and selecting a few that was considered to best meet the requirements of the company. According to openinnovation.eu, Open Innovation functions differently as it works on “combining internal and external ideas as well as internal and external paths to market to advance the development of new technologies.”

Closed Innovation

Open Innovation

 

 

 

 

 

 

 

 

 

 

Proctor & Gamble is an example of a company that has placed its innovation strategy at the heart of its business model. “Connect + Develop” is P&G’s Open Innovation initiative, whereby the company collaborates with external sources to produce innovative products and services. According to its website, 50% of the company’s product initiatives involve significant collaboration with external innovators and that P&G has established more than 1,000 active agreements with its innovation partners. The website invites people to learn how to license and sell their innovation to P&G. Some products that were a result of P&G’s collaboration with other companies are Olay Regenerist (P&G’s skincare organization worked with a small French company that produces the antiwrinkle technology), Pringles Stix (a product provided by its partner in Japan while P&G manages the trademark, distribution, and marketing), Mr Clean (extended its products to go beyond household cleaning, such as auto-cleaning kits), Bounce Lint and Freshness Roller (developed at P&G, but manufactured, distributed, and marketed by OneCARE), and many more involving packaging design, trademark licensing, and programs that leverage on word-of-mouth advocates.

(Click here to visit P&G’s Connect + Develop webpage)

This concept of collaborating and innovating together to produce a product that improves customers’ experience and satisfies their expectations is a very interesting approach that a company could adopt. It shows how businesses could benefit by sharing ideas and collaborating through Open Innovation to not only gain profit, but also add value and make a difference in the lives of their customers through their innovative products.

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