Open Innovation is not a Panacea

20 07 2010

‘Open innovation’ is the most widely used buzzword in innovation management today and it has been so for the last few years. Companies have learnt to develop networks from which they can select… the best ideas for new products and services. P&G is one of the leading organizations that has been able to change its R&D departments to a C&D philosophy – ‘Connect & Develop’. In this philosophy, researchers scout out the best ideas for new products and services and look for these ideas both inside and outside their organziations. Open innovation has helped some companies develop new products that would not have even been considered by their internal research groups. However, don’t get carried away by the hype. Recent research by new product development guru Bob Cooper (of Stage-Gate fame) shows that open innovation is widely used but not perceived by companies to be particularly effective. Why? Well there are some limitations to open innovation such as intellectual property rights (in cooperating with other organizations you need to be clear who owns the ideas), and maintaining the secrecy of your product development plans (Philips address this by conducting their open innovation cooperations through technology brokers). Once the limitaions are addressed open innovation can be effective but it will not solve all of your innovation management issues. For example, it will not help you create a culture of innovation within your company; it will not help you identify your customers’ ‘hidden needs’; and it will not help you selct the most promising innovation projcets.

So remember, innovation management requires a number of approaches which have been carefully selected to match your organization’s situation. There are no panaceas in managing innovation!

Posted by Keith Goffin

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