Open innovation is both a philosophy and a practice. It involves reinventing R&D by building a portfolio of relationships and networks that provide access to technology, meet technology needs, and capture related opportunities. Practicing open innovation for business advantage is classic strategic technology management.
The business decision to practice open innovation obviously and prominently has a technology component: do we or don’t we expand our potential sources of technologies and related capabilities beyond the walls of our own R&D? Once the decision has been made to engage with external partners, particularly in relationships that are not simply arms-length acquisition transactions (you sell, we buy), achieving excellence in open innovation requires (repeat: requires) other organizational characteristics and inter-organizational behaviors. Some of these key characteristics and behaviors are summarized in the following seven C’s of open innovation excellence:
- Compatibility of inter-organizational goals: Establish a shared understanding and commitment with each partner
- Complementarity between in-house skills and external partners: Ensure in-houseskills exist to absorb and exploit the new technology
- Champions: Establish someone as personally committed to ensuring uptake of new technology
- Common language: Develop a shared understanding of terminology and assumptions between staff in both companies
- Challenging internal constraints: Encourage staff to view use of external technologies as good practice rather than as competition to internal R&D
- Customer pull: Involve potential users of the external technology early and often
- Charter for innovation: Articulate top management views on the role and importance of technology in achieving business success
Organizations practicing open innovation are outwardly focused not only on their markets and customers, but also on potential sources of technologies that enable them to continue in these markets. In addition to managing customer interfaces, they must also establish and manage interfaces with external technology partners, in order to achieve excellence in open innovation.
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