This article originally appeared in an issue of be: inspired/, an online magazine co-created for and with marketing experts.
When Henry Chesbrough introduced the term ‘Open Innovation’ ten years ago, he ruffled a few feathers: companies should radically open up their innovation efforts? They should do away with the notion that it needs ‘special people’ (scientists) in ‘special places’ (R&D labs) to develop new ideas, vital for the growth of the company?
Ten years on, a lot has changed and we have seen how some companies have embraced the idea of developing new products, services and markets with the outside world.
But what is open innovation? Rather than reproduce a buzzy textbook definition that reads nicely but feels abstract, imagine two R&D managers with very different mind-sets:
This sounds great but what kind of companies are actually adopting an open innovation mind-set? And what are the benefits?
1. P&G Connect + Develop
This program is the poster boy of open innovation – because it’s from a big company and it’s successful: P&G publish all of their science challenges on a website for everyone to see and allow scientists from all over the world to submit solutions. For example, a challenge could be “How to get rid of tricky stains without damaging the fabric.” P&G reviews all submissions and if they take a solution to market, the inventor will receive royalties in return. Results: Their success rate of products moved from 15% to 50%. And today 35% (!) of all new products P&G launches come from outside the company. Connect + Develop has helped turbocharge more than 250 products into the marketplace and now, deep seated in organisation culture, P&G predict it staying so for the next 20 years. You can read more about P&G’s success in this HBR article.
2. Dell Ideastorm
Dell Ideastorm is an online suggestion box on steroids: a public space that allows everyone to submit ideas on how Dell products and services could be improved—Dell announces regularly which ideas have been implemented (over 544 since their launch in 2007). They re-launched the site last year and have hired their most active (and critical!) member as their full-time community manager to keep the community fresh and alive. Some of the ideas resulted in Dell’s first backlit keyboard and rack-mounted blade workstations.
While some of the benefits of following an open innovation mind-set are obvious, the journey from ‘closed’ to ‘open’ will take time and not all innovation challenges are suitable for the open approach. But next time you are asked by your boss to fill the NPD pipeline or to bring a new concept to market, ask yourself these 4 questions:
- What if there are people out there who have already developed an answer to my challenge? How could I leverage them?
- What if I could ask a few thousand of our consumers to help me fill my pipeline?
- What if I were to engage my most important customers or business partners to develop the proposition with me?
- What if I used our social media presence to harvest and improve ideas?
What to do next:
We have developed our own Open Innovation offering: if you you’d like to know how this concept could help you or if you would like to take part in our open innovation workshops, please drop me a line on email@example.com. You can also follow me on @felixdkoch for more open innovation content.
*The first part of the quote is widely attributed to Bill Joy, Co-Founder of Sun Microsystems and can be found in: Henry Chesbrough, Open Innovation: The New Imperative for Creating and Profiting from Technology (Boston: Harvard Business School Press, 2003).