Brianna ParkerLast updated: Feb 22, 2020
Model Name : Open Innovation Strategy
Creator : Henry Chesbrough
Purpose : Creation and innovation, Research and Development, market expansion, external development.
In this era of modernization, who doesn’t want originality? Creativity? Innovation?
These are the things that attract the people of today. They want constant change – a positive one.
This is the reason why both small and big companies have decided that creativity and innovation are necessary tools to maintain the success of their business and improve market competitiveness.
What is Closed Innovation?
The traditional ‘closed’ innovation model, however, encountered obstacles such as lack of novel idea generation among the internal team of the company.
What is Open Innovation?
The term Open Innovation is relatively new. It was first coined by Dr. Henry Chesbrough who defined the term as follows,
The open innovation targets to enhance the ability of the organization to originate or innovate new ideas for solutions and products through the daring external ideas presented by partners and customers to achieve success in the market.
The ideas that are collected and assessed during the research stage can help the teams to lessen the costs, risk, dedication and time as the ideas come straight from the external contributors.
Examples of Open Innovation
There are many open innovation companies out there who are implementing various types of open innovation in both large and small companies and businesses.
Below are a few successful examples of organizations that embraced open innovation using various business models:
1. General Electric (GE)
General Electric (GE) is one of the successful companies executing various open innovation strategies. Their GE Open Innovation message emphasizes their comprehension of the need to address the problems in the world by applying crowdsourcing innovation. The Open Innovation Manifesto of the company highlights the collaboration between entrepreneurs and experts from almost everywhere to keenly solve problems by sharing their ideas.
Based on GE’s innovation Ecomagination project that targets to resolve environmental challenges via innovative solutions, the company, over the last decade, has spent $17 billion on R&D and received total revenues of $232 billion.
Turning Winning Ideas into Actual Products
First Build is one of its projects, a co-created teamwork platform that unites engineers, designers as well as thinkers to share ideas with other members and discuss them together. These ideas focus on resolving the problems and produce new home appliance products.
The idea manufacturing is done through the company’s micro-factory areas where associates have access to tools and machines needed to transform their ideas into real products.
- Opal Nugget Ice Maker TM
- The Laundry Catcher
Open Innovation at GE doesn’t just stop there. This is just one of their open innovation models targeting the creation of a multifaceted platform that enables both internal and external individuals to collaborate together in order to manufacture and share ideas and deduce innovation for services and products.
2. Coca-Cola
I presume you have seen those fountain dispensers at various cafés and fast-food chains etc. from where you get an upsize soda with your favorite meal.
But do you know who designed it? No?
Let me have the privilege to enlighten you. Coca-Cola fountain dispenser was designed in 1960 by Raymond Loewy, making Coca-Cola one of the pioneer companies in the field of innovation.
Presently, Coca-Cola is embracing models of open innovation on levels between the company and its customers from one side, and the team and other businesspersons from the other.
The Accelerator Program endeavors assist start-ups in 8 different cities across the globe; Buenos Aires, Singapore, Sydney, San Francisco, Bangalore, Berlin, Rio de Janeiro, and Istanbul.
Another open innovation strategy presented by the company is the Freestyle dispenser machine that enables individuals to mix their own flavors and recommend a new flavor.
The new product records the flavor so that the consumer can get it from any other Freestyle machine using the mobile application. This open innovation model places the customers in the heart of the process of production as the Coca-Cola uses the recommended flavors as part of ideas from outside that can be assessed and handled as a new line.
3. LEGO
We all know LEGO! And we know that kids today are crazy for it. But what many of us don’t know is that LEGO, in the early 1990s, faced tough times as there was a stagy drop in their sales and succeeding revenues.
The company then took some strategic decisions and brought changes that drove the company to a more ground-breaking route than before.
The new strategy ‘LEGO’s Shared Vision’ targeted company focus on the customers by connecting both creativity and business.
To invent new LEGO sets that will be able to attain market success, the company commenced the ‘LEGO Ideas’, an enterprise based on a co-create model of open innovation.
People don’t have to work for us to work with us
This famous LEGO quote reflects open innovation.
But how can you work for them without actually being hired by them?
Well, here’s how:
- The customers can design their own LEGO sets on the websites either using computer 3D applications or Lego bricks.
- Other users then discuss the idea and vote for it.
- Once the idea gets the required votes, the company can consider it as a new product
The creator is then offered a small amount of profits.
4. Facebook
At Facebook, they arrange hackathons for their personnel. The idea is that the workers produce novel ideas and innovations as well as create primary versions of their ideas. These hackathons are for everyone in the company – not only for the developers.
The motive behind is that you get to work with something outside your job description and by doing so, you enjoy making a difference with the company and this is what induces creative thinking.
The live chat option, the Facebook timeline and the like button are some of the ideas that have developed from Facebook hackathons. No matter what the job title, from intern to CEO, anyone at Facebook can share their ideas and have the resulting product released for public use.
What are different Open Innovation Platforms ?
There are various platforms that help the businesses, organizations and engineers etc. across the globe to make innovation happen and to track innovation programs.
A Swiss Post, for instance, uses an open innovation platform Qmarkets to meet a diverse range of its innovation needs.
Some of the other open innovation platforms used by various companies around the globe are as follows:
- Bright Idea
- Imaginatik
- Hype Innovation
- Nosco
- Hyve
- idClic
- Spigit
- 100 open
- Chaordix
Final Thoughts
The above-mentioned open innovation examples certainly make us realize that in this world of technology, open innovation is the key to success. So, want to achieve market success? Embrace not just innovation – but open innovation!
References & more information
- Chesbrough, H. W. (2006). Open Innovation: The New Imperative for Creating and Profiting from Technology. Retrieved from:
- https://books.google.com.pk/books?id=OeLIH89YiMcC&printsec=frontcover&dq=open+innovation&hl=en&sa=X&ved=0ahUKEwi9zcC_xq_dAhVMXSsKHQ8dBz4Q6AEIJjAA#v=onepage&q=open%20innovation&f=false
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S.K. Gupta
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