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Creating an open innovation culture: models to inspire your business

'' The fundamental premise of open innovation is not all the smart people work for you.”

Open innovation pioneer Henry Chesbrough

As companies struggled to adapt to the effects of the Covid-19 crisis, open innovation is at the center of attention, with experts from different sectors coming together by working together.

Most celebrated recently is the union between Ford, United Auto Workers, 3M, and GE Healthcare, to develop ventilators. Utilizing and combining the teams constituent areas of expertise; F-150 seat fans, 3D printed parts, and portable batteries.

Open innovation has been around for almost 20 years, although it may sound like the latest buzzword. C-suite members are finally taking note of the theory first formulated by a University professor as digital transformation and the startup age take off.


When a company engages in open innovation, its R&D department is open to input from outside the organization, as well as from other parts of the organisation. Companies remove the limitations imposed by a traditional, secretive model by breaking down traditional silos between departments and welcoming external experts.

Henry Chesbrough, a research professor at the University of Berkeley, developed the concept of open innovation in 2003. In today's world, useful knowledge is widely distributed, and no one company, no matter how large, can maximize the potential of innovation on its own. Chesborough explains that this decentralized approach to innovation enables companies to accelerate their growth.


Closed innovation is where ideas are generated, managed, and sustained by closed innovation, which is based entirely on internal resources and expertise. There is no sharing of information with outside parties within a company, typically within the R&D department.

In contrast, open innovation welcomes talent, researchers, and subject matter experts from outside the organization. We believe that increased information sharing and collaboration will invariably result in better results when adopted as an open innovation strategy.


Open innovation can be applied in a variety of ways, depending on what is most appropriate for a given company's business objectives. Through examining the different types of open innovation, you can develop a clear understanding of how to best utilise them.

Who is involved gives the classification of open innovation:

  1. Intracompany - Open innovation efforts within the organization. Intracompany innovation pulls resources from multiple departments, which may sound contradictory to the open innovation philosophy.

  2. Intercompany - Innovation between two (or more) companies. Corporate accelerators are an excellent example.

  3. Experts - Open innovation brings in people outside the organization who have relevant experience and knowledge.

  4. Publicly open - An open innovation method that invites all people regardless of their prior knowledge or reputation from outside the organization.

Once who is involved is defined, we can define the purpose

  • Marketing to promote brand messaging and convey key information to the target audience.

  • Gathering insight to identify and evaluate valuable information about current market trends and customer preferences.

  • Finding talent to enhance the overall skill set and productivity of the company’s workforce.

  • R&D to develop new products or services.

Cross referencing these gives a huge matrix of open innovation, 16 in total

For example:

In order to develop products that will reach the widest audience possible, you should use a publicly open model to gain insight from experts and potential customers.

Imagine your business needed to fill new positions quickly. You can identify people within your ranks who possess valuable skills when you use an intracompany approach to hiring.

Open innovation types depend on the level of inclusion you wish to achieve, as well as the company's primary goal.


How does this method of innovation benefit your business?

1. Gain access to technology that is out of reach

Some startups are able to bootstrap their way to success, but many are crushed by a lack of resources. Often it proves impossible to get an idea off the ground without the capital or technology to properly develop it.

Using open innovation, startups can build relationships with university research facilities or larger enterprises that have the resources to develop and market products.

2. Create new avenues of income

The core business model does not always fit certain projects. Open innovation allows a company to develop unrelated ideas externally rather than letting them die completely. This enables them to establish new revenue streams and start new business partnerships independent from their primary business model.

3. Use co-creation to your advantage

User-generated content is a powerful tool for companies to build brand awareness and social proof by leveraging customer feedback.

As you involve customers in early stages of product development, you are able to learn more about the communities you are trying to serve and incorporate their ideas into the final products and services.

4. Get the best talent

It appears that despite efforts to train more developers and IT professionals in emerging fields such as fintech, cybersecurity, health tech, blockchain, and mixed reality, there simply is not enough talent to meet market requirements. Your business won't be able to innovate any more if it invests in closed innovation.

Open innovation enables companies to collaborate with as many bright minds as possible so that you can keep your company at the bleeding edge.

5. Accelerate development timescales

Red tape and strict processes can bog down larger enterprises. Smaller startups may have talent, but they lack the resources and financial strength to compete.

Small startups and large companies benefit from partnerships because they reduce costs and speed up product development. It spreads the risk between the two companies as well.

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