Disruption may be the new normal, but how we react to it is up to us and our organizations. Over the past year and a half, as priorities and consumer needs shifted, office work moved online, and supply chains were disrupted, many organizations opened up for collaboration and innovation on a massive scale at record speed.
Open innovation, a term coined 18 years ago by Henry Chesbrough, to refer to a distributed, more participatory, more decentralized approach to innovation, is based on the observed fact that useful knowledge today is widely distributed, and no company, no matter how capable or how big, can innovate effectively on its own.
In response to the pandemic, we saw open innovation in the form of collaborative efforts regarding data sharing, modeling, biotech R&D, and emerging technologies become especially prevalent. For example, 3M, Ford, GE, and the United Auto Workers built ventilators out of car seat fans, battery packs, and 3D printed parts. In support of vaccine development, Microsoft opened its Azure platform to ImmunityBio to perform a highly detailed computational analysis of COVID-19’s spike protein structure. And Siemens made its Additive Manufacturing network available to the global medical community to hasten the production of medical components.
Such efforts provided invaluable experience in collaboration and distributed innovation that positioned participants—and their communities—for greater resilience to face future challenges. These efforts also mark an inflection point in prioritizing the maturing discipline of open innovation.
Open innovation has proven to help organizations externally source ideas, as well as forge fruitful partnerships by sharing internal ideas that could be more fully optimized. As a source of both iterative improvements and large breakthroughs, open innovation is a means of accessing a larger pool of talent, business models, networks, tools, and other inputs to generate value. The enduring promise of open innovation is to get work done faster, cheaper, and with better ideas.
The pandemic prompted a greater need for open innovation, but the last decade has demonstrated that open innovation works best with a structured, thoughtful approach to strategy, roles, processes, and measurement and continuous improvement. This reminder for structure reflects APQC’s traditional advice for performance and process improvement. But for open innovation to work, the additional, possibly counterintuitive ingredient for this structure and governance is flexibility. Innovation. Creation. Collaboration. Such actions require organizations to reflect on their strategies, roles, processes, measures, and governance and then dismantle barriers to agility. Simply put, most organizations need to more deliberately bake flexibility into the structure for open innovation to work.
4 Best Practices for Better Open Innovation Strategy
APQC’s newly released report Open Innovation: Creating Flexible Collaboration contains recent real-world examples that highlight open innovation best practices in the context of thoughtful infrastructure with baked-in flexibility. The report showcases 11 best practices, plus five key enablers of open innovation. Here are four best practices specific to open innovation strategy.
- Focus on targeted, needs-based open innovation.
Organizations can struggle with balancing the expansive potential of an open innovation program with the need to target investments. Efforts should align with organizational strategy. But an important distinction from other organizational programs is to set open innovation guidelines that are needs-based, rather than outcomes-based.
- Partner broadly across a variety of external and internal organizations.
Open innovation programs benefit from deliberately approaching traditional and untraditional sources of ideas. Successful organizations create an expansive network of external and internal partners.
- Position your organization to build and manage key relationships.
More than simply establishing an online portal for idea submissions, open innovation programs require established processes for communication, experimentation, and relationship-building. Relationship management is a critical capability for open innovation and benefits from both high-tech support and high-touch opportunities.
- Allow open innovation maturity to drive the approach to intellectual property ownership.
Organizations benefit from regularly clarifying how intellectual property (IP) concerns and open innovation programs align with organizational strategy—and then working to dismantle any conflicts between those concerns and needs.
To learn more about these and other open innovation best practices, APQC members can read the full report here - Open Innovation: Creating Flexible Collaboration. Non-members are able to access an executive summary.
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