2,524 crowdsourcing and crowdfunding sites
Editor's Note: The following post was published on the Forbes.com website on May 6, 2012. It is re-posted here with permission.
About a year ago I was asked to participate in a roundtable discussion on innovation at the University of Virginia. The participants were senior innovation executives from companies such as Bank of America, Corning, Northrup Grumman, and AT&T, among others. One of the topics we discussed was “open innovation”, beginning with the typical references to Henry Chesbrough and his work on the topic. We spoke about technology licensing, intellectual property, joint ventures, and the challenge of managing this type of innovation. Within a few minutes, however, something interesting happened. A few of the participants challenged the group’s singular focus on the business models and mechanisms that are often associated with open innovation a-la Chesbrough. They spoke about innovation projects in their organizations that were certainly “open,” but not focused on licensing, joint ventures, or other issues typically considered under the realm of open innovation. That session led me to realize that there is some confusion regarding open innovation, or at least there is a need to cast a wider net around what open innovation is all about.
To understand why open innovation has become so popular over the past few decades, it helps to remember what the typical or routine R&D and commercialization process looks like in most organizations. The caricature is one of scientists in white lab coats developing technologies (“R”) and business people developing (“D”) and commercializing (“C”) those technologies. In fact, an entire cottage industry has developed around helping organizations manage typical innovation processes, most notably using the Stage-Gate system, or some variant thereof.
The typical R&D and commercialization process opens the door to a few big problems. It is unlikely that the best (or even very good) ideas are all located in one organization and, even with an idea in hand, should one organization really manage all of the technical and markets risks associated with commercializing technologies? That’s where open innovation comes in. Chesbrough defines open innovation as, “A paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market as the firms look to advance their technology.” The prevailing thought is that open innovation allows organizations to simultaneously expand their breadth of ideas, opportunities, and know-how while minimizing the technical and market risks associated with innovation. Open innovation appears to come with little downside.
If we expand the interpretation of open innovation just a bit to include other innovation processes that are executed with organizations or individuals outside the typical boundaries of the R&D organizations, we find that most organizations have probably already engaged in open innovation in one form or another. A broader interpretation highlights lots of links to other “non-routine” innovation processes that look and sound a lot like open innovation. Many of these processes are currently used by organizations to execute innovation initiatives, but it’s hard to argue that these are typical or routine R&D processes:
But how should these different modes of open innovation be used to deliver new products, services, and processes? Some of the links above outline strategies for managing these forms of open innovation, and in the weeks that follow we’ll highlight others. In the mean time, I look forward to your comments and discussion.
- Raul Chao is on the faculty of the Darden School of Business at the University of Virginia.