Archive for the ‘strategy innovation’ Category
What would you guess is the first position of management when you suggest you should license your patents to competitors, share your under-utilized trade secrets with threatening startups, and investigate the possibilities of collaboration with your cousins in aligned segments?
The likely response is a swift “are you mad?” as the leadership looks at you with that funny expression you expect when you’ve done something which is not quite socially right.
Emerging presently, however, there is a movement in the innovation space called Open Innovation whose core tenet is that you do just that.
The thinking is, if you have unused intellectual property or uniqueness, the best economic results are obtained by licensing it to competitors who might make use of it, rather than let it sit idle. And, conversely, by actively seeking out competitors that have something valuable to your business and reaching accommodations with them to get you access.
Open Innovation is one of the ramifications of the Innovation Economy , which is based on the thought that competitive advantage is a result of how well you use know-how, rather than what know-how you have. The understanding of the ability to use know-how well in a particular problem space is a hard to copy advantage that requires investment, development, and in most cases, sustained effort over a long period of time. This, of course, is why it becomes a significant source of competitive advantage.
Open Innovation is the current de-rigor fashionable business model amongst innovators in many industries. This is especially true in industries where the products aren’t very differentiated like fast moving consumer goods. It is equally true for industries where the products are very differentiated, like aerospace.
On the other hand, companies that have chosen not to pursue Open Innovation are tending to lag competitors. This is because they are forced to rely only on their own R&D efforts, rather than taking what’s best from industry around them. Failing to share is turning out to be a significant competitive dis-advantage.
Open Innovation is a methodology that innovators are regularly using to create new value in their businesses. To find out how you can use it it too, read James Gardner’s free, online innovation book.