Open innovation (OI) can be a powerful tool for businesses to generate new ideas and bring them to market quickly. It can accelerate product development, reduce costs, and improve the chances of success for new products and services.
However, not every company that engages in open innovation is flourishing. Many companies fail to realize the full potential of OI because they don’t understand how to properly integrate it into their business model.
What Is Open Innovation?
Open innovation is the process of sourcing ideas and solutions from external sources beyond the traditional boundaries of your company. It’s a more open, collaborative, and inclusive way of thinking about innovation.
Open innovation means sharing your problems and challenges and inviting others to help you solve them. It also means being open to new ideas outside your company.
OI differs from the traditional innovation model, which focuses on internal R&D and keeping ideas within the company. In the conventional model, companies tend to be more secretive about their work and are less likely to collaborate with outsiders.
Open innovation can take the form of established partnerships like Delphi and Mobileye working together on autonomous driving technology. It can also work through co-creation competitions like the BMW startup challenge or crowdsourcing portals like the My Starbucks Idea platform.
There are many different ways to source ideas through open innovation. The fundamental principle is that companies look outside their traditional boundaries for solutions.
3 Benefits Of Open Innovation
Below are three benefits of OI that every company should know about.
More Innovation Ideas
Open innovation helps you generate more ideas because you’re sourcing them from a larger pool of people. Inviting others to contribute their ideas increases the chances that someone will have a great idea that can help your business.
You’re also opening yourself up to new perspectives and ways of thinking about problems. You can develop innovative solutions you wouldn’t have thought of on your own.
For instance, Starbucks could never have invented cake pop on their own. They crowdsourced over 70,000 ideas from their customers.
By casting your net wider, your innovation journey will be more productive, and you’ll be able to bring new products and services to market efficiently and faster.
Lowers Costs
Visionary thinkers are not cheap to come by. Open innovation allows you to access a global talent pool without paying exorbitant costs.
OI can reduce the costs of developing new products and services. For example, if you crowdsource the design of a new product, you don’t have to pay an external design agency.
This doesn’t mean that open innovation is free.
There are costs associated with running competitions, for example, or setting up partnerships. But the costs are often lower than traditional innovation methods.
Accelerated Innovation Journey
OI can help you achieve your innovation goals faster. Working with external partners allows you to access their knowledge, expertise, and resources. You can refine your ideas and get them to market quickly.
Open innovation can also help you validate your ideas before investing too much time and money.
For example, suppose you run a competition to find the best solution to a problem. In that case, you can select the winning idea and then work on developing it further.
This is especially helpful in areas such as product design, where you can get feedback from users early on in the development process.
How To Do Open Innovation Right
Below are a few tips on how to do open innovation right and why it’s essential to keep these things in mind as you move forward with your journey.
Choose The Right Audience
Who will you engage with for your OI journey? The answer to this question depends on what you’re looking to achieve. If you’re trying to solve a particular problem, you’ll want to engage with people who are likely to have ideas that could help solve that problem.
On the other hand, if you’re just trying to get some fresh perspective on your business, you’ll want to engage with a broader group of people.
Laser-targeting your audience will help you get the most out of open innovation. Not only will you receive the best insights and ideas, but you’ll also save time and resources by not engaging with people who aren’t relevant to your needs.
Frame The Problem
Even if you choose the most skilled and knowledgeable audience possible, you won’t get the best results if you don’t frame the problem correctly.
When crafting your OI challenge, be as specific as possible. The more information you can provide about the problem, the better. This will help ensure that people understand what you’re looking for and can provide valuable insights and ideas.
In addition, make sure to avoid setting any artificial constraints. Constraints will only limit the ideas and solutions that you receive. Instead, let people’s creativity run wild and see what they come up with.
Diversify For Success
A diversified portfolio approach is often the best way to succeed in open innovation. Engage with various people, organizations, and platforms as you move forward on your innovation journey.
Don’t put all your eggs in one basket by only relying on one source for ideas and solutions. By diversifying, you’ll increase your chances of finding the best possible answers to your challenges.
Instead of running one considerable, high-value “make it or break it” project, run ten small “Agile OI” challenges in parallel. You will get a chance to quickly test and iterate on ideas while reducing the risk of failure.
Grow Your Business With Open Innovation: Partner Up
Partnering with a digital company that understands your innovation journey is a great way to take advantage of open innovation.
At Digitlab, we’re passionate about helping companies grow through open innovation. Our innovation consulting team will help you design an innovation strategy tailored to your specific needs and objectives.
We’ll also provide you access to our global network of experts who can help you solve even the most complex challenges.
If you’re ready to take your business to the next level, contact us today and let’s get started.
