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Here's How to Make Open Innovation Work!

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By: Victor Assad, CEO of
Victor Assad Strategic Human Resources Consulting and Managing Partner of

The term 'open innovation' was
coined by University of California, Berkeley, professor Henry Chesbrough when
he authored a book with the same title.  According
to Professor Chesbrough, 'Open innovation is the use of purposive inflows and
outflows of knowledge to accelerate internal innovation, and expand the markets
for external use of innovation, respectfully. [It] assumes that firms can and
should use external ideas as well as internal ideas, and internal and external
paths to market, as they look to advance their technology'[i]
innovation is often a gradual transition

Through my work with Fortune 200
companies, I have observed transitions from closed, tops-down, controlled
innovation to open innovation.  The transition
is often gradual. They often followed the path of slowly building alliances
with more relatively safe external partners, such as key academic researchers
or small technology companies. The next step in the transition was usually technology
acquisitions (most of which in my experience don't meet their goals and failed--and
also included the occasional sterling success), occasional projects with IDEO,
and finally external crowdsourcing, as an attempt to solve a minor
technological obstacle or learn more about customer preferences.
This transition often sends their
law department's intellectual property group into an apoplectic fit. I am sympathetic
to their plight: 'How can we protect the company's IP when it is on the
InnovationOne, we believe in open innovation
Our research has shown that the most
innovative companies create collaborative cultures and the ecosystems to
support innovation. While we agree with Professor Chesbrough that companies need
to look externally for inspiration, new ideas and solutions, we have found that
a company's own workforce can be a treasure trove of innovation. That is, if
you point them in the right strategic direction, invest in their skills, give
them challenges to overcome, and most importantly, give them explicit
permission to ask questions, make suggestions and, well, be innovative!
Successful innovation, and most
certainly open innovation, begins with executives. If executives don't embrace
innovation, talk about it endlessly with passion and enthusiasm, and invest in
it, innovation won't catch fire. 
Executives need to create an ecosystem
in their companies that invites employees to generate ideas and build upon each
other's ideas. Reaching out to external experts, building alliances, and crowdsourcing
are important, as long as innovators work within the limits of protecting their
critical IP. Research on external crowdsourcing shows that it often fails, but
it can be hugely successful when managed well within a collaborative community
or as a contest.[ii]
involvement is essential!

Many of our clients have found that
when they listen to and empower their employees, especially the customer-facing
ones, they learn to listen and build better relationships with their customers.
While customers might not always know the next big innovation, having honest customer
involvement accelerates innovation.
else is needed for open innovation?

The organization's ecosystem needs a
reliable process with clear criteria and decision rights to decide which innovations
to move forward. It also needs investment. Finally, the ecosystem must have the
organizational alignment necessary to commercialize the innovation.
Organizational alignment can be one
of the most difficult and heart breaking elements of innovation. Old habits die
hard. It can be incredibly difficult to get the time and attention of departments
that are lazar-focused on meeting the goals of current commercial operations. Alignment
requires a strong executive champion, and a performance management and rewards
system designed to support innovation.
What has been your experience with
open innovation? Join the conversation!

Victor Assad is
the CEO of Victor Assad Strategic Human Resources Consulting and is a Managing
Partner of InnovationOne. He consults on talent management, leadership
development and coaching, innovation, and other strategic
initiatives. Please e-mail Victor at victorassad6@gmail.com or
For innovation visit 

Henry Chesbrough (2006), Open Innovation:
Research a New Paradigm,
Oxford University Press.
Kevin J. Boudreau and Karim R. Lakhani (April 2013) 'Using the Crowd as an
Innovative Partner, Harvard Business
Found at https://hbr.org/2013/04/using-the-crowd-as-an-innovation-partner/

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