While the term “Open Innovation” has been evangelized since first being coined in 2003 by Henry Chesbrough, an organizational theorist from the Haas School of Business at Berkeley, it’s particularly relevant today. The increase in computing power, access to cloud infrastructure, open sourced code and platforms, coupled with other technology advancements have reduced the barriers to entry for new companies in many industries.
These new and agile startups are competing with established enterprises, forcing large organizations to rethink their business models. Consider the disruption to the hospitality industry by AirBnb, Inc., a company founded in 2008 that’s now well on its way to becoming the world’s largest hotelier.
Open Innovation provides an opportunity for enterprises to reclaim the role of “digital disrupters,” because they have the capacity to work with emerging companies, and have the scale and resources to achieve their business transformation objectives that the smaller players lack.
Leading corporations are moving ahead to incorporate Open Innovation into their business, and are recognizing that the value of collaboration exceeds the threats of sharing information. This shift in philosophy is leading to a systematic and structured effort to include Open Innovation as part of a company’s overall business strategy, and an evolution in culture towards co-innovation, open ideation, and sharing of technologies and information externally. The Accenture Technology Vision 2015 recognizes this potential to make a difference by operating as ecosystems, not just as individual corporate entities, driving what it refers to as the emergence of the “We Economy.”
To successfully drive Open Innovation, it’s important to build a foundation that fosters a supportive culture and to back it up with investment. Sponsorship from executives and effective incentive and reward plans are critical to help employees be more comfortable appropriately sharing knowledge and technology with external parties.
Business goals must also be defined by understanding the market and assessing how disruption in other industries can apply to the enterprise. This knowledge can help a company define high-level goals and identify the technologies that will drive them.
Having a strong vision for the future, fostering a culture that embraces innovation, and driving clarity of business goals will all help set the stage for Open Innovation processes to thrive. With that foundation in place, there are three practical steps for getting started.
- Discover – Based on the business goals and built on a strong foundation, the enterprise engages with the innovation ecosystems to discover partners in innovation. A successful discovery process requires the enterprise to modify their business goals as they learn the “art of the possible” from the ecosystem. “Bridgemakers,” who help link enterprises with start-ups, universities and other research organizations, can help businesses shape their methodology and make the best choices. The output of this stage is the identification of partners and technologies, use case formulation, business case analysis and strategy development, and alignment of internal stake holders.
- Develop – Once partners are identified, the next step is for the internal stakeholders to come together to develop the use case in a rapid or agile development model. The goal of this stage is to quickly implement the use case of interest and pilot it to demonstrate that business goals can be achieved. With Open Innovation, enterprises can avoid heavy investments of time or money with multiple parties involved in the co-innovation process.
- Deploy – The final phase involves taking the initial success of the partnership, demonstration of the applicability of the technology, validation of the business case via the pilot, and collaboration of the stakeholders, toward a broader deployment of the innovation for the enterprise or their customers. Integration of the technology including customization, business process re-engineering, change management including training, organizational change, and process change, as well as executive level support come to full fruition with the introduction of the new product or service to the broader user base.
Open Innovation speeds up idea creation and execution, unlocking possibilities that didn’t previously exist. Working systematically with the ecosystem using a clear methodology will make it easier and more effective for enterprises to find the best external innovation to solve business problems, develop a comprehensive strategy, execute successfully and manage risk along the way.
Posted by Jitendra Kavathekar, managing director, Open Innovation, Accenture