Open innovation uses both internal and external resources and collaborative business systems to solve problems. Traditionally, innovation came from internal R&D, but open innovation spreads costs and risks. It allows companies to find people to solve problems they don't know about. Major companies like Nokia, P&G, and IBM now use open innovation approaches, crowdsourcing ideas and partnering with startups and universities. While it risks losing competitive advantages and secrets, open innovation can lead to new growth by accessing ideas outside a company's walls.

1. Open Innovation
As a Collaborative Business Process
Simon Reynolds
simonreynolds.com.au
twitter.com/simonnreynolds

2. Innovation
Invention, New Ideas, Creating new products
Traditionally has been closed innovation
Driven by Technology
Engineering and R&D
Comes from Internal Research
Creates false positives & false negatives

3. What is Open Innovation?

4. What is Open Innovation?
Uses Internal AND External resources

5. What is Open Innovation?
Uses Internal AND External resources
Looking outside for answers

6. What is Open Innovation?
Uses Internal AND External resources
Looking outside for answers
Solving problems

7. What is Open Innovation?
Uses Internal AND External resources
Looking outside for answers
Solving problems
Everyone is the best at something!

8. What is Open Innovation?
Uses Internal AND External resources
Looking outside for answers
Solving problems
Everyone is the best at something!
Uses collaborative business systems to function

9. Why Open Innovation?
"No single company is large enough or
inventive enough to be an innovation leader
without collaborating with an array of
partners,"
A.T. Kearney 2008, "Open Innovation: the next frontier in
innovation management."

10. Why Open Innovation?
Spreads Risk and Cost
Finding people to solve problems
Finding out things you don’t know
Solves Business Problems
Finding new sources of growth
Business and Value Generated - (P&G using only 10% of
their developed patents)
Invention itself is not going get market success (you can be
inventive without being innovative)

11. Who does it?

12. Who does it?

13. Where IT fits in?
What Open Innovation would be like WITHOUT IT
•Severely diminished capacity to innovate
•Mostly limited to mail and personal visits
•Costly, time-consuming and limiting
•Scope of possible innovators is limited to large companies and universities.
IT gives many possibilities for open innovation:
•Faster and wider communication
•Ability to find innovators and innovations
“the trouble was that uniquely prepared minds can be illusive, like
the proverbial needle in the haystack” (Tapscott & Williams 2007)
•Ability to Share resources
•Ability to Distribute Processing

14. How is Open Innovation
being used?
“when a company gets big enough the ability to
innovate within diminishes” Dr. Bob Iannucci, CTO of
Nokia and Head of Nokia Research Center

15. How is Open Innovation
being used?
 Nokia – Forum Nokia, OKI, Beta Labs, Closed down research labs and
opened ones next to universities
 Procter and Gamble – 50% of innovations are developed from external
parties, provide a webspace for innovators to partner with P&G,
Innovation scouts *Pringle Chips printing process example*
 Kraft – Provides a webspace for innovators to partner with Kraft to
deliver innovations in various domains
 IBM – More than half of their revenue is made by making technology
which fits other’s needs (including competitors) (IBM Global Services)
 Intel – Developed the open innovation framework that Nokia (and many
others) uses
 Ideagoras: - Market Places for ideas
 Innocentive - Werner Mueller developed anti wrinkle technology for
cotton clothes

16. Issues
• Giving away business secrets, designs, &
processes
• Risk of losing your competitive advantage
• Possibility of creating new competitors
• Shared risk between those involved
• May rely too heavily on others – what if they fail to
perform?
• Must be open with Others
• Holding back important data or information can be
costly

17. Where to find out more?
https://www.pgconnectdevelop.com/
http://research.nokia.com/openinnovation
http://www.kraftfoods.com/innovatewithkraft
http://www.wikinomics.com
Wikinomics: How Mass Collaboration Changes
Everything - Don Tapscott 2006