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8 Reasons for Open Innovation Exploration

Stefan Lindegaard wrote an article on Blogging Innovation where he explained the hype on open innovation and what the it brings. His elaborates that it brings attention to innovation in general and mindset changing to improve corporate innovation capabilities. Open innovation also behaves along the lines of the Hype Cycle -which was applied on Social TV for instance- that in return coincide with Stefan’s conclusion:

“So yes, open innovation is hyped, but if this hype can help convince executives, employees, companies and even industries to change – and improve – how they innovate, perhaps this is not such a bad thing.”

The Hype Cycle ‘demands’ customer success stories to be able to prove itself, otherwise it’s climbe out of the Trough of Disillusionment will be longer and more difficult. This is the stage where open innovation finds itself.

The eight reasons described below all add value to the success stories, enabling further exploration or integration of open innovation processes in the organisation:

You can’t solve problems with the same thinking that created them

The first reason is one from a meta open innovation point of view. Organisations can’t solve solely their problems, being caught in their own thinking mechanisms, tunnelvisions, not -really- being able to think out of the box. With open innovation organisations have the opportunity to let multiple disciplines clash into each other, key is that many angles are taken by many individuals, all with their own experience, framework and knowledge, which will build on hunches (as mentioned in the video) that mould ideas.

Discovering unmet needs and introducing more innovative ideas

Depending on whom you’re introducing into the open innovation funnel, customers aren’t always aware of their own needs. Taking them into the open innovation process allows the organisation to discover these unmet needs. This will effectuate more innovative ideas that are partially powered by external stakeholders, having created validated innovations through them.

Using outsiders can speed up processes

By having the right and external people in the open innovation process, the business processes can speed up that favors competitive advantages and capabilities. What is being enabled is rapid validated innovation.

Driving growth by keep looking at unmet needs and transform them in viable business

When open innovation has become a process, a funnel with entries for external stakeholders, it will become a continuous process of finding, matching and validating the needs into new business (NPD/NSD) or enhanced existing business. Not all are viable, and depending on the business strategy, prioritization of transforming ideas/needs into business is more effective.

Enabling businesses to be faster, smarter, more agile than the competition

Industry life cycles and produc life cycles become shorter and more violent, global transparency brings the challenge to innovate faster and smarter, being more agile than competitors. Porter’s Five Forces are more blurry then ever, expanding the volume of direct competitors, taking into account more rivalry from unexpected angles. For global companies and glocalisation counts that the very concept of a successful global brand now arises bottom-up across several locations at once, with local relevance and an emphasis on local conditions.

Reducing costs

All kinds of costs are being reduced. As mentioned in the third point, processes are speeded up, decreasing cost by shortening for example the R&D phase. Think also about advertising costs, by opening up the process organisations guarantee a highly targeted buzz at pre-launch. Costs are also reduced because the time to market is shortened.

Reducing time to market

This relates to the targeted buzz at pre-launch, having already a group of influencers in place. Through social networks the relevant niches can be spotted and reached quicker than conventional go-to-market techniques, shortening the time to market and reducing costs by it.

Increasing the output of innovations

Because (yet-to-be) innovations are co-created (e.g. creative consumers), co-tested (e.g. critics) and co-validated (e.g. representatives of target groups), the output increases along the process. Another aspect that increases the output is the quantifiable ROI at the beginning of the process. By calculating the potential market through social media, by identifying key influencers and their reach an extra layer is laid on the ROI calculation, giving organisations more validation for the development and introduction of it.