Open innovation: Shifting to a more efficient business model

It is really simple to think in terms of innovation as a “closed” activity where the company owns the information by different means. Research is performed, new ideas come up, and new businesses are developed. This linear analysis however is missing several advantages than can be obtained by shifting the process to an open innovation model. Some of those advantages are:

• More amount of ideas: it sounds obvious, but it’s necessary to comment that the more people involved in the innovation process, the more ideas one can get to select from
• Wider reach: it’s related with the previous advantage. When more people and with more different backgrounds are implicated, ideas tend to be more diverse and rich. Having people with backgrounds in art or architecture, for designing computers, for example, can be necessary, and provide with experience that computer designers may not have.
• More focused target: Involving customers, final users, and suppliers, will ensure that targets are reached. Their opinion is of great importance. Many ideas are developed, and then rejected because of final user tastes, or supplier’s impossibility of achieving expected results. Having them making suggestions in the beginning of the process will ensure that ideas that are being developed are on the right track.
• Resources efficiency: the amount of infrastructure necessary in a “closed innovation” business model to achieve the same results as an open innovation one is prohibitive. Companies can’t afford that amount of money. If they want those results, they should use an open model.

But, which are the steps to follow? It’s rather simple (to think about them, not executing):

1. Change the mind model of people in the company. This is the most difficult part, and yet, the most necessary.
2. Select your partners. Thinking wider is better in this stage. Who can bring more ideas? Making a diagram on how the business model is, can be good for leaving no one behind.
3. Make the rules: make a contract setting what can and can’t be done. Is necessary to reduce risks.
4. Execute the process. Work platforms are necessary. Think on their impact in the process.
5. Monitor and improve. As in every process, things can (and must) be improved.

Who is doing this? What are their results?
Well, media related companies, such as movie making, or advertising, and fashion, have been  doing it for a while, but also Oil&Gas companies and Automotive companies (specially in relation with their suppliers, or B2B customers). Results are cheaper and more focused ideas. For example, wider approaches lead to the use of medicine images technology for oil fields exploration.

Why now? Well, simple: technology. People can access internet from anywhere in the world. Right now, companies can take profit from the ideas that a potential customer comes out while travelling in the metro. Why NOT now, then?

To wrap up, open your mind, open your company process to the rest of the world, and the results you will find, are greater than you can imagine.

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