Applying open innovation where your company needs it most

Abstract

PurposeWhile the open innovation concept proposed by Henry Chesbrough a decade ago has had some striking successes, the myriad options for engaging external partners can be daunting, so leaders need a guide for getting started that matches the needs of their firm. This paper aims to address this issue.Design/methodology/approachThe paper identifies that innovation processes involve three stages during which the business model elements are conceived and elaborated: idea‐generation, idea‐development, and commercialization. The question for leaders is: “In which of the three stages could your growth efforts benefit from an infusion of external ideas and expertise?”FindingsThe open‐innovation approach does not require a company to replace all its current research and development (R&D) efforts. But it does change the primary question leaders should be asking to “How can my company create significantly more value by leveraging external partners to bring many more innovations to market?”Practical implicationsThe article shows executives how they can systematically assess an innovation process, understand where new venture business models are weakest, and select the points at which open innovation could add some needed spark.Originality/valueThe article leads executives through two‐step process for introducing a customized open innovation program: step one, assess where your company's innovation process would benefit from external input by using five key questions; and step two, learn how to manage external relationships.