Businesses have increasingly realized that they can’t do innovation alone. Many have implemented open innovation programs to make it easier to bring in ideas from the outside world. As Nanako Mura from Kraft put it, “we recognize that we don’t know everything.”
A.T. Kearney wrote, “No single company is large enough or inventive enough to be an innovation leader without collaborating with an array of partners.”
This is a sea change from the traditional closed innovation model, which dictates that companies tightly control the creation and management of ideas (and own all the intellectual property).
Open innovation recognizes that businesses don’t have to originate the research to profit from it and that those who make the best use of internal and external ideas will win.
But for open innovation to mean more than lip service, collaboration can’t be one-sided. I remember one supplier road show when I worked at a large company. Fifteen vendors flew in from across the country and were each given ten minutes to pitch ideas based on a brief we had sent. We reviewed their presentations like reality show judges. We picked one winning idea, dismissed the others, and then browbeat the winning vendor on cost. This was a partnership in name only.
Many businesses bring this type of closed silo mentality to open innovation. They welcome ideas through an open innovation portal, but force Draconian legal agreements to participate. I know of one collaboration between a large company and a startup where the legal costs alone of the IP licensing agreement ran into the hundreds of thousands of dollars for the smaller company.
I’d love to hear your idea of businesses that are executing open innovation programs well.
Open innovation is not only about process. It’s about mindset.
(Marketoonist Monday: I’m giving away a signed print of this week’s cartoon. Just share an insightful comment to this week’s post by 5:00 PST on Monday. Thanks!)