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The Challenge and Opportunity of Open Innovation

Open innovation has been defined as the exploitation of both internal and external knowledge to accelerate the process and expand potential commercialisation of innovations (Chesbrough et al, 2006). It can be traced back to Silicon Valley tech start-ups in 80’s and 90’s, where superior R&D budgets of organisations like Xerox and Bell Labs were unable to compete with resource deficient smaller businesses. Studies into these anomalies noted a more collaborative/open approach to innovation was evident, this has now become an excepted norm regards general management and strategy within many technical businesses, especially software (Gassman, et al, 2010).

Organisations becoming concerned where the next innovative idea will come from have begun to explore open innovation and crowd-sourcing. Some organisations are concerned with venturing into an entirely new innovation process. Others have embraced these new methods yet did not fully appreciate the risks, or opportunities, engaging external resources with innovate. Open innovation principles stem from classic innovation principles such as idea generation and selection (Campbell, 1965). As with all processes, success relies on implementing suitable methods to organize, monitor and manage progress.

Organisations understand one of the significant advantages of open innovation is the potential for idea-generation with the sheer volume of prospective ideas. As organisations’ main experience of cultivating ideas is internal; open innovation has been used build high-quality ideas banks. Rather than being constrained to the finite number of employees to produce ideas for existing problems, external experience and intelligence could be utilized. The logic is simple: if anyone can provide solution ideas, (the statistical principle is) the more ideas generated the better the quality of the best one is likely to be. The advantage to casting the net widely to capture significant quantity of ideas may mean the average the quality of ideas is extremely low; yet the possibility of one to be spectacular is greater.

“The more ideas generated the better the quality of the best one is likely to be.”

Secondly, a lesser-known advantage of open innovation is that the value of ideas generally increases with the level of variability. Studies found organisations believed only employees possessing the industry and strategic knowledge could judge on validity of ideas. Yet opening idea-selection process externally could generate significant value, harnessing distinctive expertise and perspectives, in selecting most successful ideas. This selection principally builds a majority consensus thus selecting the most popular idea. Therefore the deviant and extreme radical viewpoints with be marginalized, thus the remaining options will tend towards mundane and ordinary incremental improvement. The outlandish and revolutionary viewpoints are necessary to produce disruptive innovation (Berglund, 2004).

With organisations moving a more processing into the digital space and the prevalence of internet technologies open innovation will increase in popularity. As seen in the case of SAP establishing a platform to enhance their existing eco-system is paying dividends. They are flexibly using both open idea creation and selection processes dependent on their needs. It was highlighted that open innovation is based on traditional theories yet traditional approaches do not scale to large audiences, nor support shorter implementation cycles. The SAP Idea Place provides a simple platform to co-innovate with customers and partners. Traditional product feedback relied solely on user groups or costly one-to-one interactions, which is unsuitable to open selection.

“Outlandish and revolutionary viewpoints are necessary to produce disruptive innovation.”

Not only are SAP benefiting directly, established partners have used the Idea Place to define products or solutions to address specific customer needs which have not been prioritised by SAP. This enables the ecosystem to scale while SAP plays a more supportive, enabling role. The lack of physical product and large install base has lent itself to this more collaborative method of working. As highlighted in the SAP case, the control of the environment is fundamental to the commercialisation of the numerous ideas generated via the open innovation model (Rodgers, 2012).

In the arena of physical product creation with the need for differing levels of resource to manufacture goods, open innovation may be restricted to the ideation phase of the innovation process. The majority of opportunities would exist in more collaborative endeavours, where the various parties are able to share resources; physical, technical, financial or physical. This type of collaborative innovation and partnering approach has existed for many decades and we could conclude that this is not a form of open innovation. As the number of involved becomes controlled this would form of closed innovation group resource sharing and joint commercialisation efforts in order to maximise revenue generation.

The established legal protection devised decades ago to protect large enterprises is unsuitable. Intellectual property rights, product & service ownership will continue to hinder open innovation initiatives as potential participants seek protection from “Arrow’s information paradox”. Protecting individuals’ ability to capitalise on the commercial value of their ideas generated restricting unauthorized use needs legal focus (Arrow, 1971).

Thus concluding open innovation regardless of its theoretical potential will struggle to produce significant breakthroughs or revolutionary inventions without substantial corporate sponsorship.




Chesbrough, H.W., West, J. and Vanhaverbeke, W. (2006) Open Innovation: Researching a New Paradigm. Oxford: Oxford University Press.

Gassmann, O., Enkel, E. and Chesbrough, H. (2010), The future of open innovation. R&D Management, 40: 213–221.

Campbell, D.C. (1965) “Variation and Selective Retention in Socio-Cultural Evolution,’’ in “Social Change in Developing Areas: A Reinterpretation of Evolutionary Theory,” ed. H.R. Barringer, G.I. Blanksten and R.W. Mack (Cambridge, Massachusetts: Schenkman Publishing, 1965).

Rodgers, Chip. “Phone interview, January 2013; David Kiron,“SAP: Using Social Media for Building, Selling and Supporting,”.” MIT Sloan Management Review(2012).

Arrow, K.J. (1971) “Essays in the Theory of Risk-Bearing” (Amsterdam, The Netherlands: North-Holland Publishing Company, 1971), pg 152.

Berglund, H. (2004). Interesting Theories of Innovation: the practical use of the Particular. Department on Innovation, Engineering and Management.




Forget Users, External Customers is Where Its At.

Are you a victim of the internal customer, the one that is forever changing their mind chasing the next big thing? You spend months streamlining processes using cross functional teams delivering IT systems that provide the business outcomes you set out to achieve. Another successful project brought in on time and on budget. Yet many of these celebrated project never will fulfil their full potential as they often forget include the external customers (suppliers, paying customers, etc.).

over the years we find ourselves into serious trouble when we focus too much on the end user of the software application being designed. You tend to focus on making it an easy as possible for the internal employees to do what’s expected, the internal management team are pleased that their teams are being catered for. Don’t you want to make it easy for your external customers to deal with you, streamline the supply chain. all to often the two objectives are in direct conflict.

Creating a self-service mindset within your design processes, regardless if you’ve adopted enterprise architecture, you can offset many of the process tasks to the most practical. Purchase order progress maintained by suppliers; credit limits, overdue accounts visible to paying customers. If you start with the external view then move inward to where you have greater influence then you will stand a greater chance of delivering ‘real’ value and lasting significant benefit. Don’t rely on your internal users to hold the answers to the best solution. Obviously you need to ensure they are consulted and informed, but the drive needs to be outside in.

That’s right, no more internal-only applications. If you are looking at HR expense management, your billing systems, or revamping the inventory management systems, everything impacts your external customers. everyone needs to understand that success must be measured from multiple view points. Be brave an challenge some of the businesses practices you could save huge amounts by removing costs and building relationships with the outside world.


Decisions, Decisions, Decisions…..!!!

Do you sometimes wonder how to make great decisions? What do you do when when you’re not sure where to start? Let me tell you a story about me, my brother and some cars. (stick with me it will make sense)

Many years ago both me and my brother decided that we needed a classic convertible “toy” car for the summer. Not only so we could look great with the roof down but as a little engineering project. We approached  our decisions in very different ways, I looked for something small and easy to store: an MG Roadster. My brother on the other hand fancied something a bit more full bodied: a Triumph Stag, clearly he has more room in his garage and was thinking of using the car not just when the sun was shinning.

As the search took shape my brother found a good looking white Stag and after some haggling paid £1000. It looked and sounded great, it had a couple of odd rust spots but nothing that a bit of hard work couldn’t resolve. Me, I struck it lucky when I found a Roadster with only two owners, father and son, had been kept in a garage since new and still had all the original leather covers. After having a new soft-top made and fitted the total cost of £2000.

“OK, we have some good news and some bad news.

The first summer we both enjoyed our purchases, the weather was definitely made us feel we had made wise decisions. Once the frost of winter passed we began the annual service and road worthiness checks. This is when the story started to change as my little MG only needed minor work; oil, brakes pads, etc..(don’t worry not going to get technical), unfortunately my brother didn’t have a  spring in his stride when he spoke to the mechanics.

“OK, we have some good news and some bad news. The good news we know why you had trouble changing gears, the bad news is it will cost £750 to fix.”

Well my brother had little choice but to agree and handed over the cash. Both now cars fully functional and summer looming, we used our toy cars everything the sun shone , but the winter arrived all to soon and they were put away until the new year.

When spring arrived and the maintenance regime began my brother noticed a rattling from the rear of the Stag. Another conversation with the mechanics left him with a quandary.

“We’ve got some good news and some bad news. The good news is we have found the cause of the noise, your rear axle mounts need replacing. Bad news is it will cost £1000.”

“The good news is we have found the cause of the noise.”

This is a difficult question to answer as my brother knew that the Stag in good condition was worth £2500, but if he didn’t fix the axle the car would be worth £1500 at best. Either way he is going to lose money what should he do, sell the car as is and cut his losses or fix the car?

I know what happened in real life but what would you do?


“True Commitment”

What does commitment to something really mean and why does it matter?


As humans we’re social animals and have a deep need to be involved in the world. This desire for close relationships and social encounters has fuelled the whole social web. Facebook, Twitter, Instagram and even LinkedIn all rely on our desire to connect with other people but support our need to feel valued.


But commitment means little without some kind of affirmative action, a reward for the effort expended. The nature of our commitment is a reflection of the perceived significance of the compensation or recognition. Commitment means making a choice and giving yourself time to become engross yourself with whatever that choice is.


It means accepting the limitations of that choice as well as the potential benefits, and it means entering into an agreement with whatever we are committed to, be it a person, a career, creating a work of art, writing an essay.


When we make a commitment, we can’t expect to gain any greater satisfaction from the arrangement than the effort we put into it. Ultimately, it is only through significant commitment that we discover who we are and can grow. Commitment is not a matter of thinking thoughts or speaking words. It requires real time, real dedication and real action.


What are you committed to? Does what you do helping you to learn, grow or enrich your life?


The Key to Success is Simple: The Secret is…..

There is no question about it: Commitment is a key to success whether it’s in a marriage, a business, personal and professional growth, or sports.

What made Larry Bird one of the best players in basketball? He was considered slow, and many thought he could not jump. Sometimes it almost looked like he was playing in slow motion. Or what about Shane Williams who became Wales’ best international rugby winger? Everyone thought he was just too small to play professional rugby at 5′ 7″, except an old boss of mine. OK, he is Welsh and they had completed another Grand-Slam in the 6-nations. Shane, not my boss, always looked a little out of place next the rest of the 6 foot plus team. But why did these two succeed as players: they were totally dedicated to success. They practised more, played harder, and had more mental toughness than most of their competitors and team-mates. They both got more out of his talents than almost anyone did.

“Commitment and Success”

You see, the difference in physical attributes between athletes doesn’t tell you much. It’s the level of their commitment that separates the good players from the truly great. People who are committed to success are willing to do whatever it takes; as long as it doesn’t harm anyone else, no-one should be thinking I mean extending beyond personal commitment. Everything they do reflects their commitment; focus, work hard, learn, train more, repeat until perfected.

Ask yourself the following questions and think about your answers

How strong is your commitment?

  •            To your career?
  •            Your relationships?
  •            Your personal growth?

How much of your time and energy do you give these things? Do the results you get reflect your level of commitment?”

Are you being the best you can be?

Now here the final question: How do you feel about those answers?


This article was originally published on LinkedIn https://www.linkedin.com/pulse/key-success-simple-secret-william-fish