“The way to get good ideas is to get lots of ideas and throw the bad ones away.” – Linus Pauling
If you want to get people really excited about your projects, products, or services, then make them a part of it! Such is the idea behind open innovation challenges—initiatives in which companies invite external individuals or organizations to contribute their ideas, solutions, and expertise to solve a specific problem. These challenges not only foster innovation within the company but also create a sense of community, highlighting the value of multiple perspectives and ideas. They can spark innovation, create business, and garner much greater revenues than internal teams alone can achieve.
Case Studies
An excellent example of open innovation at play was recently provided by Mozilla—the company behind the famous Firefox browser. It launched an open innovation that challenged that aimed to create a Firefox extension for promoting credible content. Participants did not have to have coding knowledge; they were simply required to submit sketches of their proposed solutions, to lower the barrier to entry. The Mozilla community now comprises core contributors (in the hundreds), active contributors (in the thousands), casual contributors (tens of thousands), supporters (tens of millions), and users (hundreds of millions). Each step down the rung is larger, thereby opening the doors to groundbreaking ideas and disruption in the industry. US-based vehicle manufacturer, Local Motors, is also strongly in tune with the designing community. Since 2007, it has had micro-factories that manufacture open-source vehicle designs. They have numerous community members who upload designs, some of which have been successfully produced.
Open Innovation Is a Two-Way Street
UC Berkeley Professor, Henry Chesbrough, explains that open innovation comprises two components: one is the “outside-in” aspect, in which external ideas and technologies are incorporated into a company’s innovation process. The other, less known aspect is an “inside-out model,” where a company’s underused and unused ideas are allowed to move outside the company and become incorporated into external parties’ innovation processes. It is easy to see how it is an idea that can have far more extensive changes than simply boosting a company’s revenue.
What Should Companies Look for When Collaborating With Communities?
As productive as open innovation is for communities, it also has its challenges. For instance, businesses typically go to great lengths to deal with trusted partners. This is because potentially sensitive information may be shared with community members. In typical processes that are purely internal, companies seek to work with dependable suppliers, distributors, agents, consultants, investors, and customers. The main challenges of open innovation include intellectual property rights. Sharing ideas and technology can lead to questions regarding potential patent infringements and ownership. These difficulties can be overcome by drafting clear partnerships that delineate the rights and obligations governing competitions. Additional issues that companies may face include quality control, the difficulties of managing multiple external providers, coordination with third parties, project and time management, and the potential blurring of a company’s brand identity. Companies must create legal contracts covering aspects such as finances, ensure that collaborators align with their brand values, and set up teams to deal with aspects such as timelines and consistency in the flow of innovations.
Communities that Benefit
Open innovation can have lasting impacts on various communities, including small- and medium-sized enterprises, open-source software communities, and individuals. Those who are just starting in industries such as technology can gain recognition for their skills, land potentially lucrative contacts, and obtain employment in companies they may have always wished to work for. Smaller companies, meanwhile, can help develop innovative solutions for larger ones, using the knowledge they gain to develop their own solutions. They can also obtain lucrative contracts with larger companies to sustain their growth and development.
Open innovation challenges have shown how community-provided solutions, ideals, and tools can match or exceed the quality of the solutions a company comes up with internally. Open innovation is a win-win situation, as it benefits companies while also enabling innovators to benefit from unused or underused ideas belonging to larger companies. Numerous case studies have shown the benefits that open collaboration can bring, making this process one of the most exciting to be embraced in the 21st century.
Author:
Nina Sumner
