The Evolution of Open Innovation

In his book “Collective Disruption:   How Corporations & Startups Can Co-Create Transformative New Businesses,’ Michael Docherty lays out a vision of how established companies can create a strategy for innovation that includes partnering with startups, thereby enabling an “innovation ecosystem.”   This post is the third of ten reviewing the various chapters of his book in preparation for the Leadership Forum 2016 event put on by the Chicagoland chapter of the Project Management Institute on May 20th, 2016.

In the last chapter, Michael showed why entrepreneurs and lean start-ups excel at transformative innovation.   In this chapter, he talks about why transformative innovation is best nurtured in an environment of “open innovation,” a concept championed by Henry Chesbrough in his seminal book with the same name.

Open innovation ignores the walls of traditional corporate structure, where companies should look both internally AND externally for ideas and work with partners to share both the risk and reward of innovation.

Michael starts the chapter with a notion that may be counterintuitive, but he says that open innovation, although most influential in the technology world, is not really about technology.   It’s about people, and creating relationships that are lateral rather than vertical by putting companies and entrepreneurs on equal footing.   Competitive advantage will not come from who has the best technologies but who has the best relationships.

Those in business still look skeptically at open innovation because they do not yet perceive clear evidence of a direct payment from it.    This perception is based on two reasons:

  1. Open innovation is quietly becoming a more natural and integrated part of doing business.    It is planting the seeds of a new ecosystem, but the fruits have in some cases not yet emerged.
  2. Open innovation has been focused on incremental core business efforts, and not yet on the truly transformative innovation that is possible with such an approach.

Open innovation requires one to make, as Michael puts it, a declaration of interdependence, where zero-sum games (I enrich you) are replaced by non-zero-sum games (we enrich each other).   But there are different ways of going about this.   here are some examples of different types of networks that can be used for innovation and collaboration.

  • Feeder networks:   proactively identifying innovators and partners who can bring technology and capabilities to your company, including suppliers.   They feed you early access to what they are working on but they are also willing to adjust their own development pipelines to align more closely with your strategic goals.
  • Internal networks:   networking within a company, but across divisions, brands, or silos.
  • Peer-to-peer networks:   Companies share insights and co-develop opportunities.
  • Events and forums:    “innovation crowdsourcing” or experimenting with a network before committing to it on a larger scale by creating discrete events aimed at creating and nurturing a network of innovators.

No matter which form of innovation network you decide to go for, Michael has the following advice for you.

  • Set clear goals:   determine what goals you hope to achieve with your innovation network
  • Identify key players:   identify and recruit a few influential and highly respected members both for the content they bring and their ability to help you further grow the network.
  • Map your network:   map your network and key players in the technology and marketing space.   Draw interconnections you know about.   Look at gaps and develop strategies to build the missing connections.
  • Informally launch:   informal event launching allows participants to create early relationships.   By making the approach informal, partners don’t feel overly pressured to make long-term commitments.   Let the network emerge and evolve naturally.
  • Formalize and expand the network:   after the network has evolved for a while, THEN you can create more formal mechanisms for matters like forums for ongoing communication.   Introduce social networks, collaboration software, and online portals, but don’t forget good old-fashioned face-to-face meetings.
  • Experiment and evolve:   create specific initiatives, projects, and co-developments efforts as catalysts.    Consumer needs, enabling technology, and marketplace opportunities are constantly changing and you need to continually look for the intersections of these three areas.

To get examples of the different types of networks and how they evolved, check out Michael Docherty’s third chapter “The Evolution of Open Innovation”!

This chapter three concludes the first part of his book “The Game Has Changed.”  In the second part of his book, he outlines the details of his solution called “Collective Disruption,” starting with chapter 4 “Embracing Collective Disruption,” which I cover in the next post.


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