Right after I gave a talk at the Open Innovation Summit in Orlando on overcoming some key obstacles of open innovation, I had the chance to talk with Business Week’s Michael Arndt. We had a great chat about future innovation trends, arenas to watch in the next 5-10 years, and the global dynamics of innovation. A few of my comments appeared on Michael’s blog.
It is always interesting to see the reactions when a comment hits a nerve, and so it was that some rather vocal responses were elicited by my statement that the pendulum of favor for open innovation was beginning to return to the center. Of course, it could be said I was drawing fire by saying that at an open innovation conference.
There is no question that open innovation brings value to many organizations, and open innovation is here to stay as part of the available tools and methods to formalize innovation practice. However, there is no denying the hype around open innovation has built expectations to a point beyond the reality experienced by most companies. Yes, there are some companies that have great success stories to showcase like Proctor & Gamble. But, there are far more companies that are frustrated by the lack of results they are getting from their forays into open innovation. This was expressed recently in the results of an Innovating To Win opinion poll. To see how this sentiment is visible in the press, take a look at the recent Forbes article, “The Myth of Crowdsourcing.” Companies feeling this frustration are learning about the challenges of open innovation and reassessing how to strike the right balance for their organization.
This shift can take many forms, but it generally includes recognition of some key aspects of the innovation process that must be internalized. Is this a long term trend? I suspect so given the strategic nature of innovation—innovation is just too fundamentally important for business success. For an interesting view on what this could mean here is some commentary that appeared in TechCrunch by Sarah Lacy based on her interview with Shai Agassi.
The bottom line is that companies must use all the innovation tools that are available to them to compete in today’s rapidly changing environment. This includes open innovation methods. But, one size does not fit all when it comes to open innovation. The approach that works for one company may not be a good fit for you given the dynamics of your market and company. You will need to consider how to best integrate external constituencies into your innovation process, and how to keep control over your destiny and value by identifying which parts of the innovation process are your value-add. Here is a podcast where Vincent Lyons of Leggett & Platt discusses how they have approached this issue.
Also, pay attention to the most common problem areas of open innovation: alignment, authority, and actualization, and use sustainable best innovation practices to address them. In this way, open innovation will deliver value to your company.