From proprietary to open innovation

Many businesses continue to apply a traditional model in which an internal R&D function assumes the brunt of the burden of innovation. Yet, this model is now starting to wear thin. Those in charge of innovation have trouble keeping up with the accelerated pace of innovation, and end up producing new products and services that are less and less differentiated at higher and higher cost. Furthermore, companies are finding it increasingly difficult to assemble and keep all of the expertise they need to maintain a successful innovation strategy over time.

To meet these challenges, a number of large corporations, such as IBM, Procter and Gamble, and Kraft Foods, have ventured into the brave new world of open innovation. No longer do scientists work behind closed doors in top-secret laboratories. Innovation is now conducted in collaborative networks, allowing businesses to draw upon expertise and resources well beyond their borders.

Collaborative innovation forces companies to change their traditional operating practices dramatically, however. In particular, the pioneers of open innovation make three recommendations:

– Before starting, carefully analyze what you expect from your future innovation partners and what you are willing to contribute.

– Establish the processes needed to capitalize fully upon the ideas collected.

– Remember that a complete change in mindset is needed for open innovation to work. Devote the resources required to achieve this cultural revolution.