The End of Open Innovation
I had an interesting session in Sao Paulo, Brazil yesterday when a group of about 40 people listened to my talk based on my book, The Open Innovation Revolution.
Brazil is definitely an interesting place and I appreciate getting the opportunity to develop new perspectives on my global understanding of innovation.
A question got us into a discussion on how companies should engage with open innovation activities. On this, I really try to emphasize that companies should not engage with open innovation until their internal innovation processes work well. Make order in your own house before you bring in the guests.
I have given this advice for almost two years now. I still think it holds true. However, the discussion got me to reflect upon that we are getting nearer to the beginning of the end of the open innovation era. It will still take several years, but as I think more about this I realize that I pick up more and more signs that we no longer need to focus that much on open innovation itself.
One key sign is that companies other than just the open innovation pioneer, Procter & Gamble have reached a level of innovation maturity in which they no longer distinguish that much between their internal and external driven innovation activities. This just melts together and it is simply just called innovation. Not open innovation, co-creation or other fancy words, just innovation. It does, however, have a key external element to it.
Granted, the large huge majority of companies have not yet reached this maturity. Most are not even close. However, we are reaching a tipping point in which the buzz of open innovation will decline and it will do so fast.
This is actually a good thing as this is a sign that open innovation is now accepted as a valid business strategy and that companies focus on actually making this happen rather than just implementing lots of crowd-sourcing initiatives and then justify this as open innovation strategies.
Let me re-phrase a great Churchill quote: This is not the end of open innovation. It is not even the beginning of the end. But it is, perhaps, the end of the beginning as open innovation becomes more reality than hype.
So what will come next? Open innovation will no longer be viewed upon as the most important thing in the innovation community. It is still very important, but it needs to be put into a perspective in which two other elements: fast and global, are just as important. I recently shared some early thoughts on this in a blog post titled Fast, Open and Global – The Future of Innovation.
It would be great to hear your perspectives so please drop a comment…
I liked this comment from Chris Thoen as he retweeted the post:
"Great point..consumers don't care where innovation is coming from (int. or ext.)"
Very true and yet another reason that we are getting closer to the end of open innovation…
Great! Maturity will lead to the end of OI, yes. But here, in Brazil, we're not yet close to maturity in OI. You are right though in bringing this point to discussion because those already mature can now begin thinking what comes next. That's changing and evolution… Thanks
I donnot agree at all. Acceptance of Open Innovation is far from the reality for most companies. Even acceptance of Innovation is so far from being a real part of corporate strategy. I mean acceptance as being part of their daily effort. What has really changed corporations is the economy downturn. Also, it has also changed consumers worldwide. See the last Gallup Survey results on "Happiness" (http://bit.ly/blHXEj) and be amazed by the number of European countries below the 21st position. I think that corpanies and companies as well have been affected, some of them dramatically. Most of the most innovative and mature companies will behave as they have the last years or decades. The new realities for them are a challenge and they will keep up their effort to be successful. But, the less mature ones will be in their same fight. They have not changed but have suffered the economy impact too. Some have accepted OI but most of them have not: they are simply struggling as always. Stefan, I suggest that we are simply witnessing a systemic adjustment. We need some more research on OI and a strong systemic approach, and more patience to get and interpret the on-going and future changes. Regards, Alvaro
Alvaro, as I wrote many – even most – companies are at the stage that you describe. They need to learn and they need to adjust to the new challenges that open innovation brings. When this is said, they should also be able to learn from the open innovation leaders which already now integrate internal and external innovation efforts rather than separating them.
More importantly, the less mature companies need to consider their approaches to open innovation if the end game points to open innovation just becoming a natural part of innovation although now with a stong external element to it.
One thing to consider is how to organize for open innovation. Do you really need specific open innovation units or departments as many are building right now or can you get around this in other ways?
I don't have answers, but the questions this raises are worth looking into.
I think you are saying that the daring companies are integrating the Open Innovation principles to improve their companies, and of course P&G has been at the forefront with their initiatives.
In the following paragraph, I think you have an extra "than" just before the word reality at the end of the paragraph.
[ Let me re-phrase a great Churchill quote: This is not the end of open innovation. It is not even the beginning of the end. But it is, perhaps, the end of the beginning of the times where open innovation becomes more than reality than hype.]
That would be good if companies are actually drawing on Open Innovation principles to improve their productivity and bottom line. Unfortunately, with the global downturn consolidation has made much of this necessary for their survival.
Regards,
Sarah Lance
Hi Sarah,
Today, innovation is often the same as survival for many companies. Perhaps not in the short term, but then in the long term.
Thanks for pointing to the typo.
Stefan
Hi Stefan
Nice post – and some interesting comments too – I think I've shared with you in the past my deep belief that we are slowly heading towards a fully socialized business model which will end up blurring the boundaries between internal and external for all business processes in the future. We already see that socialization happening in a lot of different areas – and innovation is one of the key leaders and drivers for companies to embrace that social business change. Bravo for continuing to help companies get to that stage of innovation – for it'll eventually herald a new reality and a host of new business models for the way corporations as a whole are run in my opinion.
Best
Boris Pluskowski
http://www.completeinnovator.com