Why Companies have to open their doors and how to do it #Innovation

Innovation and new ideas are crucial for survival in today markets for companies. Everything became connected and things change faster. Companies cannot purely rely on their own competencies but have to look outside for stimulations and new ideas. Ideas get better if they get shared and other can add their thoughts and develop them to something bigger than the sum of their parts (Johnson 2010). The internet gives us the possibility to share ideas like never before.

In the last years two main streams of innovation research came up, one led by Eric von Hippel with the Lead User Innovation, which is the older concept, and the other one led by Henry Chesbrough called Open Innovation, which got discovered by companies how they can benefit from customer ideas. Schroll (2011) summarizes the main difference as follows:

“Open Innovation = value capture, User Innovation = value creation”

Open Innovation basically describes the combination of “internal and external ideas as well as internal and external paths to market to advance the development of new technologies” (Openinnovation.eu). The Lead User Innovation involves so called lead users (users that are ahead of the trend and try to find solutions, leaduser.com 2006) into the innovation process of companies. It could be seen as a tool for an outside-in-process of the Open Innovation (Wikipedia 2011), where companies make use of external ideas.

After the hype about Open Innovation – it will replace R&D! – it got more mature. Before it created uncountable ideas and “solutions that vary greatly in quality and relevance” (Bonner 2011). Now the question in the forums is how this will actually generate value. Research took a closer look at the role of users in innovation and came up with different explanations, but they could not come up with a coherent theory why users innovate (Bogers, Afuah, Bastian 2010)

A good example for open innovation and how a company is able to provide demanded goods is the platform “Tchibo ideas” (in German). Tchibo, originally selling coffee, is an international company now selling household products. To give consumers a voice and provide a platform for extraordinary ideas to share and develop, it founded the platform “Tchibo ideas” where people can post daily problems and find solutions together. All members can rate the ideas and vote for the problem and the solution of the month. Tchibo realizes some of the solutions and you can possibly find your own designed product at the point of sale!

Such a platform has to be managed in a good way, I can imagine that it could get very messy if there is no clear structure behind and a company wants to do it as a sideline. The company cannot expect that it will run by itself, manpower and commitment from the side of the company are needed. It would be wrong to lean back and wait for the groundbreaking innovation on the platform. Surely it has to give a roadmap to find qualitative solutions which could turn into profitable products. Open Innovation cannot replace R&D, but it can complement it.

Resources, last accessed 12.02.2012:

Bogers M, Afuah A, Bastian B (2010) Users as Innovators: A Review, Critique, and Future Research Directions, in: Journal of Management, Vol. 36 No. 4, July 2010, page 866, http://www.exnovate.org/gallery/documents/published-papers/bogers-afuah-bastian-2010-jom-users-as-innovators1.pdf

Bonner M R J (2011) The New—And More Profitable—Way To Look At Open Innovation, http://www.businessinsider.com/the-newand-more-profitableway-to-look-at-open-innovation-2011-7

Johnson S (2010) Where good ideas come from, http://www.youtube.com/watch?v=NugRZGDbPFU

leaduser.com (2006) What is a lead user?, http://www.leaduser.com/

Openinnovation.eu (without year) What is Open Innovation?, http://www.openinnovation.eu/open-innovation/

Schroll A (2011) About the dispute between Open and User Innovation, http://www.open-innovation.net/blog/79-about-the-dispute-between-open-and-user-innovation.html

Tchibo (2012) About Tchibo, http://www.tchibo.com/content/312682/-/en.html;jsessionid=7541CDB0E4ADDD767FDA96BF81CB5B2D

Tchibo (2012) Tchibo ideas, https://www.tchibo-ideas.de/

Wikipedia (2011) Open Innovation, http://de.wikipedia.org/wiki/Open_Innovation

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