The Side Effects of Open Innovation

Open innovation will not only lead to new ways of making innovation happen. Innovation leaders and their executives will also experience side effects. I think most of these effects will be positive, but some will be mixed or perhaps even negative.

As innovation leaders and their executives implement open innovation practices, they can just as well start figuring out how to deal with side effects of open innovation such as described below.

• Open innovation is very much about managing change. If a company can handle the change process related to implementing open innovation, then they have learned valuable lessons that can be used in change management situations. In the current and future business climate, I think everyone should appreciate working in an organization that is agile and prepared for changes.

• Often, the biggest enemy of innovation is the company itself as the company begin to focus more on its needs than the needs of the market. When you begin to innovate with partners, you will see that these partners either focus on their own needs – and then innovation will definitely fail – or you will see that they come together and funnel their resources towards a market need. If the latter happens, then you have a great chance to succeed with innovation. Pressure from external partners can shift awareness from internal needs to market needs and this move can be helpful beyond the innovation process.

• Open innovation can bring along new organizational structures. As open innovation becomes the way to innovate, the functional/divisional or matrix organizational structures as we know today will change – or perhaps even break down. I am not sure what will be next…

• Open innovation will be one of the key drivers in bringing in new types of communication tools into the organization. Think LinkedIn, Twitter and Facebook. Once the initial resistance has been defeated, this can benefit many business functions.

• Customers are one of the first places to look for external input. Although, there are dangers involved in listening to customers when it comes to innovation, the increased focus on customers can lead to better relationships with them. This can change the role of sales and marketing units as they need to get even more involved in innovation.

• At a recent open innovation conference, Cisco said that they are trying to move from a culture of competition to a culture of shared goals. This was by large driven by a desire to make innovation happen with external partners. There is much talk on changing the not-invented-here culture, but perhaps open innovation will drive even more corporate culture change.

• As you work with external partners, you are exposed to other ways of getting things done. You bring diversed thinking into the organization. This can make you consider whether your current practices are good enough, whether you have to adjust these or perhaps even develop new next practices for your organization. An example: You get new perspectives on collaboration. Perhaps this can inspire to better interaction and collaboration between business units.

• Overall creativity as well as overall complexity increase with open innovation. The increased number of actors provides new ways for people to be creative. This can also increase the level of complexity, which is also driven by fact that the organization is no longer itself in control.

Let me know what you think of this and please share your own views.