Why an open innovation culture pays off
Innovations give companies a competitive edge. In order not to endanger this advantage, many companies try to keep their research and development activities as secret as possible. However, it pays off to communicate inventions openly and to involve external idea bearers. In this blog post, you can read why an open innovation culture is worthwhile and why it is imperative that you take your employees with you.
Developing innovations requires creativity, know-how and speed. These competencies are not always sufficiently available in one's own company or even in one's own research and development department. At the same time, technical change requires innovations to be placed at ever shorter intervals. And: today's customers are increasingly asking for complete solutions that a company alone can hardly develop.
This situation presents every company with a choice: either to gradually increase investment in its own research and development department. Or the company can involve external idea providers in the search for new ideas. This has its price, of course, because the competition also knows about its own future plans. Many companies are not prepared to pay for this. But an open innovation culture pays off in most cases - mainly because of these four advantages:
1) New solutions through new perspectives
Most companies tend to take themselves too seriously. Customer orientation is often still an empty phrase and that is not surprising. Because it seems anything but easy to slip into the role of the target group and think from its perspectives. An open innovation culture allows many different perspectives to be incorporated into the innovation process at a very early stage. The customer advances from customer to co-designer. By networking with external idea carriers and the target group, the company itself averts the danger of continuing to stew in its own juice.
2) Using the spirit of innovation from the outside
Every human tries to solve a problem that is virulent for him. Companies can also take advantage of this urge to improve things. For example, with the help of the LEAD User Method, which involves external idea carriers in the innovation process. These LEAD users are characterized by two characteristics:
- They already have needs or requirements that other market participants, such as the early adopter, will only have some time later.
- LEAD users benefit greatly from an innovation for themselves. Some of them are already working on a solution themselves.
Both, especially the latter, ensure the intrinsic motivation of the external idea bearers. In many cases, they do not even expect a pecuniary return for their creativity - after all, they also benefit from the new solution.
3) New area of application for own innovations
Developing innovations strategically is enormously important. Otherwise a company runs the risk that its own business success depends on accidental discoveries. However, a new technology can often be used not only for its intended purpose, but also for a completely different one. It is almost impossible for a single company to come across further exploitation possibilities for its own invention.
An open culture of innovation involves many external idea bearers in the search for new applications and thus for further business opportunities. One example of how this can work is provided by mobile operator T-Mobile Austria. The company has developed a transmission technology specially designed for the Internet of Things (NB-IoT) and has been supplying all of Austria with it since June 2018. The possibilities of this basic technology are so diverse that the employees of T-Mobile Austria could not even come across the numerous possible use cases themselves. In order to develop practical applications that can also be used to build viable business models, T-Mobile Austria organized a hackathon and a prototyping program in which external companies could participate. Even before the NB-IoT network was available throughout Austria, T-Mobile Austria was able to use this method to present practical applications. This increases the chance that the invention will also be used and will pay off accordingly. T-Mobile also involves external partners in the further development of NB-IoT.
4) Ideas from the target group secure sales
Ultimately, inventions are only successful when they are needed. Sometimes the target group is not even aware of their own concrete needs. Who really knew before the launch of the first iPhone generation that they absolutely needed a smartphone? Today these devices are by far the most important device for many of us. This example shows that it is often not enough to ask business partners or consumers what they want. It is more effective to involve customers at a very early stage in the innovation process. Their ideas either enrich the innovation itself or show other ways in which a new technology can be used. In any case, an invention in which the future buyers have participated is more likely to become a market success.
Attention to the Not-Invented-Here Syndrome
An open innovation culture offers many opportunities to decisively improve innovation management and its output. However, it only works if management does not forget to take the entire company with them on this journey. Every workforce tends to build barriers to ideas from outside. After all, every employee defines himself or herself through the creativity and ideas he or she brings to the company. If he gets the feeling that his employer only relies on external impulses for developments on which the future of the company ultimately depends, he feels superfluous.
It is absolutely understandable that employees in this situation dismiss ideas from the outside as bad and mobilize them against their realization. This "Not-invented-here Syndrome" (NIH) has often led to promising approaches failing to make it to the market. This syndrome, which is ultimately very expensive for companies, can be overcome if "Open Innovation" is also understood internally. This already starts at the management level. If a manager not only relies on his own ideas, but also implements those of others, then the employees will also lower their inhibition threshold against impulses from outside. Involving as many employees as possible in the Open Innovation activities is a further step in fighting NIH. A personal contact to external idea carriers promotes the acceptance of their creative contributions, because these no longer come from a completely unknown person. In addition, such discussions also stimulate the creativity of one's own employees and their desire to formulate ideas.
Conclusio: Why an open innovation culture pays off
Companies today are much more dependent on innovation for sustainable growth than they were a few years ago. At the same time, it is becoming increasingly difficult for individual companies to invent something new - and at ever shorter intervals. Open Innovation makes it possible to use the necessary resources, but also other perspectives from external idea carriers. At the same time, an open innovation culture only works if all employees of a company are taken on this journey. Otherwise, NIH will lead to many good approaches remaining in the drawer.
Born in Lower Austria. At LEAD Innovation she works as Head of Innovation and focuses on agile innovation management via SCRUM.