Open innovation catalysing transformation

Just as organisations seek out new ways to operate in challenging times, the approaches to innovation themselves are transforming.  Traditional processes and models of innovation are no longer good enough on their own to assist organisational adaptation amidst such volatility and uncertainty.

Paradoxically, this perfect storm of social, economic and environmental challenges our businesses now face is creating the perfect conditions for radical transformation to take root; new ways of innovating and operating are finding fertile environments, beginning to seed and flourish.

Open innovation and co-creation approaches are still in their infancy, yet emerging in all walks of business and social life to catalyse transformation. So what do we mean by ‘open innovation’?

Put simply, open innovation is ‘internal/external co-creation’: where ‘internal’ stakeholders within an organisation (employees, designated intrapreneurs, innovation teams, product designers, change agents, etc.) engage with ‘external’ stakeholders connected to the organisation (partners, suppliers, customers, etc.).  The ‘co-creation’ part of this engagement is important for it to be true ‘open innovation’.  Co-creation is where people collaborate to create; for instance, customers share ideas and concepts for new products or services with each other and with the organisation leading to a new creation (new product design, upgraded service, new business process, change in cultural behaviour, etc.). Here are some examples to shed some light on this pioneering space:

GreenXchange – A platform bringing together companies and people to share ideas for sustainable transformational change

InnoCentive – An open innovation market place

Kraft First Taste – where consumers share views on product tastes

Threadless – a community based tee-shirt company where the community engages in design ideas

Innovation itself is transforming, as leading-edge companies like Google know. Marissa Mayer, the company’s head of “user experience”, declares that Google is not merely a search engine but “an innovation engine” that needs constantly to reinvent itself—“just like Macs and Madonna”.

Through open innovation the organisation is enriching its ability to sense and respond to the emergent, dynamic business environment.  The organisation is synthesising its internal environment with its external environment much like living organisms do when adapting to a changing environment.  Rather than the organisation controlling its culture and internal environment, it seeks to create openness where its interactions with external stakeholders operate through semi-permeable organisational membranes.

And, naturally, this co-creative culture brings with it more opportunities for synergy in business and beyond.  For instance, big business can gain access to bright sparks often found more readily in smaller, more entrepreneurial organisations ; likewise smaller businesses can benefit from networking and connecting with bigger organisations (with their benefits of scale and reach); social community interest organisations sharing and innovating with public institutions or multi-nationals – local and global collaboration.

For open innovation to really be ‘open’ then there needs to be a culture of openness and trust, vital for sharing and effective collaboration.  Conventional approaches to Intellectual Property (IP) are challenged by this need for openness.  Hence the organisation needs to ensure there is a legal framework in place to create an environment (under the umbrella of the open innovation exchange) where sharing of ideas is less about ownership (which is deeply ingrained in to conventional ways of doing business), more about delivery of value.  The organisation has to be wise enough to be able to encourage, foster and embrace a culture of value-creation rather than short-term profit maximisation.  The culture (at least within the open innovation exchange if not across the wider organisation and external stakeholder community) has to open up and buy into the value of ‘collaborative intelligence’ so people are receptive to listening, sharing and engaging in new ideas and where entrepreneurialism is celebrated as healthy (rather than as it often is in conventional business, as a complexity difficult to control and so dangerous, risky and unhealthy).

As the Co-intelligence Institute so insightfully points out:

Collaborative intelligence is the ability to produce synergy in one’s environment or in one’s relationship with that environment. Collaborative Intelligence is the capacity to work with the world around us, not dominate it, fight it, hide from it, ignore it or waste it. It notably includes our ability to work with people and to help them work together. It tends to have a certain elegance about it, minimizing the use of force. That is because the energy for whatever happens comes from the natural tendencies of the people and lives involved — including our own. Our ability to work well in and with the energy that’s actually present — that is our collaborative intelligence.

We can observe collaborative intelligence in the phenomena called “flow” (exemplified by good teamwork and jazz improvization), in the elegant and nonviolent victories of Aikido masters (who move with the energy of their opponents), and in ecological practices like composting which work with the forces of nature to achieve human ends with little energy input or waste.

As organisations learn to let go of conventional, out-dated ways of managing and controlling better suited for predictable business environments and learn to embrace emergent ambiguity, they can evolve to become more open, locally attuned, globally diverse, networked organisations synergising with a range of external parties while creating value in ways beyond short-term profit maximisation.

Hence, open innovation not only helps the organisation adapt in volatile times, it also opens up the organisation to the ‘flow’ of emergence allowing for opportunities to seed new ways of operating that are more in harmony with life (less about maximising more about harmonising). We are witnessing the evolution of organisations from rigid, tightly managed hierarchies to dynamic living organisations which thrive and flourish within ever-changing business, socio-economic and environmental conditions – open innovation is an exciting part of this evolution.