Open Innovation Should Be How Companies Innovate

“No matter who you are, most of the smartest people work for someone else” – Joy’s Law, attributed to Sun Microsystems co-founder Bill Joy

As companies grow, or remain as big as they always have been, innovation becomes a very uncomfortable thing to deal with, since that word sometimes remains a buzzword with very low impact and results. 

Sometimes, no matter how many innovation spaces a company builds, such as R&D departments, ideathons, hackathons, idea-generating retreats and so on, the great ideas for new market solutions will never come through or they will take so much time that a very small startup in a garage will overcome the company with a great product for the market the company was planning to get. 

On the other hand, you are probably a small business, with a great idea for a big market but you lack the resources to make that solution go big, and you only see someone else doing that idea because they had more money or resources than you.  

Open innovation is a solution for everyone in this scenario.

What is Open Innovation?

Open innovation is, as Henry Chesbrough (considered the father of open innovation) says, “the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively.”

In other words, on one side, and more common in open innovation, you let external ideas merge into your innovation processes. The other part, and commonly less used, is when you let your ideas or technologies that have been underused or never used go outside to be incorporated in others' innovation processes. 

That means that the approach is completely opposite of what we know and implement as a normal R&D+I process in regular companies. 

It is hard to believe that great ideas and the best of the market will always come only from within your company. That’s why the value of open innovation is so relevant for current and future companies. 

What is needed?

To apply and integrate models of open innovation, first you need to determine, depending on your current business model, what type of open innovation you should use. 

Whatever makes sense to be built into your current business model and inside your “house” should be internally developed with external ideas adding value to your current processes. 

As for all the innovations that don't add to your business model, you should let them grow in other places. 

It is important to never confuse open innovation with open source. Open source goes for a collaborative and open approach into developing technology and knowledge, where everybody builds on top of the previous interaction but no one is allowed to exploit the business benefits of that innovation. Open innovation requires a business model at the center. 

To start an open innovation journey, you need to first open the doors. Open the doors to talent, experts and new startups to come to your facilities and update you with new trends and technologies that can create impact in different areas of your company. Inspire your colleagues to build ideas with external minds (always with very good NDAs) and solve big old problems with new perspectives. Invite small companies to develop products with you, or incubate their ideas into your ecosystems. License those old, never or underused ideas to be exploited and developed by someone into that type of business., Even  if it is the competition, you will remain focused on your main value and will get rid of whatever makes you lose focus. 

Open Innovation Beyond Businesses

Yes, open innovation, as I mentioned before, has business models at its center: however, operational models from governments, NGOs and other development organizations can benefit from the open innovation models. 

Take for example, the need for innovation in the health sector for a very specific and relevant problem of a country. The government will never be quick enough to create a solution but if the government creates the condition for an open innovation model, experts from around the world can bring valuable ideas and implement new solutions to old big problems. 

An example are the efforts of the IDB in many countries like Guatemala and El Salvador, where it creates open innovation calls like Utzil (Guatemala), to invite startups and organizations around the globe to solve specific problems in the country, such as chronic child malnutrition. The external organizations implement a pilot, funded by the IDB, to demonstrate how new methodologies can solve a problem, and later on, be adopted by the local government. 

How to Get Started in Open Innovation

To get started, just open your doors and be ready to integrate great ideas from places where you never thought they would come from. Make your teams collaborate between departments and transform your business and operational models. 

The roadmap we recommend to implement an open innovation model is not to fully open the doors from day to night, but first start inviting experts for discussion, learn from new technologies, get inspiration from other organizations, start finding challenges to be solved with the help of externals and then replicate this in all of the areas of your company. 

Want to discuss more? I’m always open to a coffee or a virtual meeting to discover new and better ways to add value into our daily life.