Open innovation as the best competitive advantage
The world is changing. Sorry, it’s not a topic, is the raw reality. Digitization will come sooner or later, and your business will face the ‘commoditization’ of their products and services. As if that were not enough, entry barriers are falling down as another consequence of the digitization of the competitive context, helping the emergence of new players. In this scenario, open innovation seems like a real path to grow your business thanks to a constant innovation.
But to innovate with a crowd we must understand the global environment and the people with whom are going to run the open innovation strategy.
The World where we innovate
Like Juan Luis Polo said, innovation is like magic, the desire to create and make things happen, however unlikely they may seem. To make open innovation a reality we have to care about this four aspects:
- Technology. It’s the material with which the future is built and we need it to develop any open innovation platform.
- Design. A key element necessary to create friendly environments that encourage the creation of collective value.
- Global vision. The center of the World is not anymore in West, it’s somewhere in the middle of the west coast of USA and Shanghai.
- Knowledge. Information is a common asset. That means that the knowledge we use to create new ideas is the same for all of us, becoming extremely difficult to achieve disruptive solutions.
Ideas born anywhere
If you choose a random hundred people from two different European cities probably there weren’t great differences between them in terms of knowledge. This leads us to a context where new ideas possibly will look similar (if it’s not the same) to any other idea previously created.
The logical consequence of this scenario is the knowledge concentration. If you choose a random hundred people living in Silicon Valley, probably they will be smarter than a hundred people of any other city.
The new competition is between hubs of talent, regardless if they are cities or organizations.
Given these wild levels of knowledge transfer, the best way to compete is by working openly and collaboratively. Talent is no longer only inside organizations, it’s spread around the World. It’s imperative to work constantly with people outside your organization.
The people with whom we want to innovate
We no longer live in the center of the World (we live at the asylum of it). The average citizen of the World is 28 years old, is mobile and has no bank account.
The world is young, educated and connected.
It’s not a coincidence that many young people, separated by thousands of kilometers, have more in common among themselves than with their respective grandparents. Moreover, as Javi Creus says, many of these people do more valuable things in their spare time than in their workday. This turn people into more complex economic agents, able to activate its capabilities and assets whenever they want (sharing their knowledge on blogs or renting their cars).
No matter how big and powerful is your company, because as Henry Chesbrough says “not all smart people work for you”. That means that open innovation should involve as many agents of your ecosystem as possible: suppliers, fans, users, employees, customers, competitors, stakeholders, etc.
Keys of open innovation
A company is doing open innovation when it has an extended community where people contribute freely and spontaneously. These communities shouldn’t (or can’t) be managed as enterprises.
Communities share resources seeking the abundance of common assets (for example, a minimum amount of articles in Wikipedia), while companies manage scarce resources to achieve goals. Communities behave more spontaneously, meanwhile organizations are more rigid and planned. These characteristics make communities more resilient to change, crucial to survive in the current changing environment where we are living.
Once we known the differences between companies and communities, it’s necessary to devise an open innovation strategy following these five points:
- Encourage participation. Give a good reason to be part of the creation of new ideas or concepts. The most inspirational organizations attract talented people likely to contribute to ambitious projects.
- Connect creative minds. Build a platform to facilitate participation, conversation and knowledge sharing. At this point it becomes crucial to understand and improve the dynamics generated among users, to provide the most favorable environment.
- Choose the best of the best. Rely on expert’s opinion and community’s wisdom to discern the best ideas. In addition, every day we have more tools to refine the collective intelligence and avoid the ‘herd effect’.
- Share profits. We need to establish how we are going ‘to split the cake’. The profit distribution, thanks to the collaboration of the community, will determine the future of the platform. On the other hand, not all the people seek profit, so you have to find a satisfactory combination of social reward (status within the community), motivation and financial reward.
- Keep developing. Open innovation is a process of building trust and linking dots, so it only makes sense as an evolving process in time. Often big brands try to innovate with their fans, but they only generate simple contests. Open innovation has no end date predefined by a marketing department.
In short, organizations will have a chance to survive only if they learn how to work with these new complex agents, the people that are running the 21st Century.
In Spanish: La innovación abierta como ventaja competitiva
