Gone are the days of a business operating as a self-functioning unit, keeping all intellectual property, R&D and innovation strategies firmly within four walls. With the rise of social media, customer feedback is available on tap. Furthermore, advances in technology have facilitated stronger relations between organisations, universities and other talent.
With all these invaluable resources now readily available, previous boundaries between organisations and their customers are eroding, leading to a much more mutual exchange of knowledge. This new flow of knowledge is changing the way businesses pursue growth, creating a new world of open innovation.
What is open innovation?
Open innovation is the practice of inviting a wide group of people (such as customers, suppliers and competitors) to participate in problem solving, idea generation and product development. This is in direct contrast to ‘closed innovation’, which is when any type of innovation, from idea generation to development and marketing, resides exclusively within the organisation. The term ‘open innovation’ was coined by Henry Chesbrough, educational director of the Garwood Center for Corporate Innovation at Berkeley Haas.
Open innovation helps organisations to participate in an open exchange of ideas without the constraint of company boundaries. By opening up to new sources of ideas, these organisations can accelerate their long-term innovation efforts.
What are the advantages of open innovation?
In open innovation, you will present your innovation challenges to a wider audience, in the hope that they will generate the right ideas for you. Here are some of the numerous advantages that result from this new ongoing practice:
Solving problems faster and better with a greater pool of ideas
Organisations often underestimate the power that lies in their customer base. Customers have first-hand experience of your product, and their feedback can ensure that you focus on what really matters to them. This will save you time trying to find the best solutions, as well as helping you to fast-track new and better products ahead of your competitors.
Leveraging the power of diverse ideas
By casting the net more widely, you gain access to a variety of different skill sets, backgrounds and experiences. This will enable you to become more agile and flexible in how you respond to rapidly-changing market conditions. It also gives you an opportunity to reach solutions you might not come up with internally. The most critical advantage, however, is that the ideas generated through open innovation could help identify new opportunities and trends before your competitors do.
As Chesbrough notes, “Useful knowledge today is widely distributed, and no company, no matter how capable or big, can innovate effectively on its own”.
Driving business value with data and trend analysis
Data plays a central role in the drive towards open innovation. The greater the number of ideas you collect, the more data you have to analyse trends and make strategic decisions. These decisions can help you develop new products, services and revenue streams, or identify bottlenecks and inefficiencies within your organisation. Data-driven decision-making can save costs and minimise risks associated with R&D by ensuring you only build products that represent a unique and verifiable customer need.
How can you incorporate open innovation techniques into your strategy?
To support the roll-out of open innovation, you need the appropriate tools and processes.
Unilever and GSK Consumer Healthcare refined the “Want, Find, Get, Manage” (WFGM) process that helps organisations to split their open innovation into four distinct phases:
Want: At this stage in the process, organisations should be identifying gaps in their innovation and asking whether these are best filled internally or externally.
Find: The second stage is about deciding which external groups will help organisations develop the capabilities to deliver on the wants identified in the first stage.
Get: Here organisations identify the processes they will use to plan and structure the capture of ideas and knowledge from these external sources.
Manage: The last stage looks at the tools and metrics organisations will use to track and monitor their external stakeholder relationships and ideas.
This framework is a helpful starting point for organisations to plan for open innovation.
But what happens when you need to start implementing it?
Overcoming barriers to open innovation
One of the biggest challenges associated with open innovation is that great ideas can sometimes get lost and aren’t taken further. It can be difficult to find an effective way of moving ideas in the pipeline from ideation to development in a timely and structured manner. This can become even more complicated when organisations seek to collaborate with external stakeholders on idea generation. This is where products such as open innovation platforms can prove invaluable.
What can you expect from Idea Drop’s open innovation platform?
Our mission is to help organisations proactively recognise the demands of their customers and other stakeholders, and to act on trends faster than their competitors.
We do this by enabling organisations to manage and collaborate on external and internal ideas in a single system, so that the best ideas move rapidly from ideation to implementation.
Features we’re excited about
Open innovation challenges are designed to build a strong community of supporters who actively engage in idea generation. With Idea Drop’s innovation management platform, every idea is displayed in a feed on each challenge page, so that everyone can see and interact with them.
Open innovation challenges can be shared to any of your communication channels and are mobile-responsive. This allows everyone everywhere to freely and easily contribute to the way your organisation does business.
External ideas can be added directly into your feed, widening the pool of ideas that your workforce can collaborate on to create new and impactful innovations.
It’s easy to overlook the fact that a whole network of skilled experts lie just outside the walls of your organisation. Collaboration with customers, suppliers and even competitors can help you save time and find the right solutions faster. And technology can help you to collect and collaborate on internal and external ideas in one centralised place, helping you to progress ideas through the pipeline and out to the market quicker than ever before.
Would you like to see Idea Drop in action?
Request a Demo!
Request a demo today and our team of enterprise innovation experts will be in touch straight away to set up a one-to-one discovery session and demo.