The Ins and Outs of Open Innovation

Abstract

This technical note explores open innovation--initiatives that are executed with organizations or individuals outside the typical boundaries of the R&D organization. Through a broadening of the interpretation of open innovation, the note aims to help managers who are trying to be more open with their innovation initiatives. Understanding what works or what doesn't work in different settings helps answer questions such as these: What types of projects are good candidates for open innovation? What should an open innovation portfolio look like? Or, more generally, how should firms manage open innovation initiatives? Excerpt UVA-OM-1495 May 16, 2013 THE INS AND OUTS OF OPEN INNOVATION The past few decades have seen tremendous growth in “open innovation”—initiatives that are executed with organizations or individuals outside the typical boundaries of the R&D organization. A discussion on open innovation usually begins with references to Henry Chesbrough and his work on the topic. Issues such as technology licensing, intellectual property, joint ventures, and the challenge of managing this type of innovation, which are often at the forefront of the discussion. Recently, however, innovation experts in academia and business have challenged the singular focus on the business models and mechanisms that are often associated with open innovation a-la Chesbrough. Managers tell stories about innovation projects in their organizations that were considered “open,” but not focused on licensing, joint ventures, or other issues typically considered under the realm of open innovation. New topics have emerged, such as social media, users as innovators, crowdsourcing, codevelopment, and distributed innovation, among others. The purpose of this technical note is to help managers who are trying to be more “open” with their innovation initiatives. Understanding what works or what doesn't work in different settings helps answer questions such as these: What types of projects are good candidates for open innovation? What should an open innovation portfolio look like? Or, more generally, how should firms manage open innovation initiatives? Why Open Innovation? . . .