Why open innovation? Open innovation allows organizations to bring together people from different backgrounds and disciplines in a collaborative environment to come up with solutions that would otherwise never exist. Also, open innovation programs are becoming the way to solve problems and generate ideas as they are less time and resources consuming than traditional R&D.

In today’s fast-changing world, companies need to embrace collective intelligence and co-creation by engaging and collaborating with partners, consumers, and business’s stakeholders to solve complex problems and keep on improving. They also need to open up the to digital transformation and enable tech-based solutions to increase efficiency and have more sustainable business models.

How can you put together your open innovation strategy in 5 steps?

1. Understand what open innovation means.

The term open innovation was coined by Henry Chesbrough, professor and author of Open Innovation: The New Imperative for Creating and Profiting from Technology.

He defined open innovation in his book as follows:

“Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively. “

In other words, open Innovation uses external sources such as consultancies, companies in different disciplines, startups, or even individual innovators through any form of collaboration. This type of collaboration can lead to innovative solutions that would otherwise never exist.

And to stay in the game, an organization has to expand its boundaries to include external expertise, and to be willing to share its work in progress. This is the key to cutting development costs and building a sustainable innovation pipeline faster. And to eventually create a competitive advantage and persevere in an ever-changing market.

2. Have a clear objective & have your problem defined.

Usually, companies run their open innovation programs for one or more of the below purposes:

  • Find innovative solutions to their most persisting problems. 
  • Grow faster through innovatively optimizing operations, cutting costs, improving their business model, …etc)
  • Develop new products or services faster/cheaper.
  • Promote their brand awareness and convey messages to their target audience.
  • Engage or co-create with their audience to identify trends and design demand-driven products.
  • Attract innovative talent to their organization to partner with or hire.

By defining your objective, you can identify a suitable open innovation approach. There are different open innovation models out there you can start with based on your objective.

3. Pick a suitable open innovation model.

The Co-Creating Model.

In this model, organizations create platforms for consumer communities so they can co-create together products or services based on consumers’ feedback. An example is Unilever’s co-creation platform, where everyone is invited to contribute by sharing their ideas, giving feedback, or proposing technical solutions to certain challenges.

Pro: The co-creation model usually results in robust solutions that are at the intersection of the company strategy, consumer needs, and market trends.

The Public-Private Partnership Model.

The public-private partnership (PPP) model is another form of open innovation. PPPs involve two or more parties coming together to share resources and expertise. They often take place between government agencies and businesses.

This model is the main driver for economic growth and digital transformation. For example, the government can request proposals from tech companies to develop solutions for smart cities, Health Tech, Agri Tech, …etc. Also, the banking sector can partner with tech arms to digitize the banking experience, for example.

The Crowd Sourcing Model.

The crowdsourcing model is one of the most popular forms of open innovation. Companies use crowdsourcing to tap into the knowledge and expertise of individuals outside of their organization. They create online communities or open calls where experts share ideas and collaborate together to develop solutions.

Organizations pick the crowdsourcing model in several cases. When their defined problem needs to be solved in a different domain, for example, the use of technology on a solution by an FMCG company. Companies run innovation hackathons in such cases.

Another example is idea competitions, where innovators from different backgrounds are invited to work either in teams or individually to come up with an idea or design a solution for a certain challenge.

The Collaborative Model.

The collaborative model is one of the oldest forms of open innovation. It involves companies partnering with other organizations to develop new products and services. This type of collaboration typically occurs when two or more companies work together to solve a problem.

Samsung, for example, has a 4-dimensional approach to open innovation: partnerships, ventures, accelerators, or acquisitions. This means that they can fund a solution by a startup or even acquire it so that they benefit from their fresh ideas and innovative products, adding them to Samsung’s offering or integrating them to existing products.

The Hybrid Model.

The hybrid model uses more than one approach, it could start big, with a broad crowd/partners, to come up with ideas -remember, great ideas can come from anywhere- then narrowing down the scope to develop and refine the most promising solutions.

It can be the opposite, doing some R&D with one partner, refining the problem statement, and clearly defining the area of development that needs working on, then going to the relevant domain and starting brainstorming solutions.

The hybrid model is mainly a loop of opening up (crowdsourcing), then narrowing down (partnering), as known as the Explore exploit approach.

As you may have noticed, the explore part of the strategy is where open innovation comes into play. In order to keep up with market trends and emerging technologies, companies need to explore new business opportunities, new value propositions, or even re-visit. Open innovation accelerates the discovery, creation, and validation of new products and ideas. How? Through coming up with many solutions by engaging stakeholders that would benefit from solving this problem.

4. Create a plan for implementing your Open Innovation model.

To start on the right foot, you should choose your partners wisely. Your partners could be innovation consultancies that will connect you to potential innovators, or you can directly organize an open innovation program calling individual innovators, startups, or even students to take part in solving your problem.

Also, you should involve people or teams within your organization in a way or another, this could be by opening a track for employees to participate, or by having relevant teams act as the project owners for implementing solutions. This is a brilliant exercise to grow collaborative skills inside your organization.

Choose the platform you will use to collaborate and communicate with innovators, to ideate and develop your solutions and to analyze and assess projects as well as follow up til the implementation and ROI. Try to find a platform to manage all the steps in one place.

5. Start your pilot project.

Trial and error is the best approach. Whether it is testing the model you picked, the implementation plan you put together, or even the collaboration model with your partners. You have to try first.

A successful pilot does not necessarily mean solving the problem as you expected. The pilot’s objective should instead be to focus on testing every component of your strategy so you can draw conclusions, generate insights. Eventually breaking your pilot project into pieces, where you can identify what worked and what still needs improvement, then go back to the pilot team and enhance those pieces.

Finally, build a strong community of people who can collaborate to work on each other’s ideas. Educate them on how they can develop ideas, turn them into viable products, and use design thinking to make those ideas work. Also, think of the incentives you can give to those people.

As you may have noticed, collaboration is at the heart of the open innovation strategy; it is called open innovation for a reason! Think of diverse yet relevant collaborators, which can make the process faster. Keep building your list of potential partners, and test different collaboration models, make sure your partners share your vision and can work with you to achieve your shared goal?

In conclusion, an open innovation strategy that works, is a result of your understanding of your challenges inside out, and having the right collaborators on your radar, and finally, having the right framework to make this work effectively for the highest ROI for your organization.

Our team of experienced open innovation specialists would love to help you put together your winning open innovation strategy. Book your free consultation session and let the innovation begins!