The eight reasons described all add value to the success stories, enabling further exploration or integration of open innovation processes in the organisation.
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8 Reasons for Open Innovation Exploration
1. 8 Reasons for Open Innovation
Exploration
By Gianluigi Cuccureddu
April 26th, 2011
Discuss and feedback this article on the 90:10 Group blog
Managing Partner of 90:10 Group Netherlands
CMO Agora Media Innovation
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http://www.linkedin.com/in/gianluigicuccureddu
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2. 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.
3. 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.