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Leading Open Innovation

Leading Open Innovation

Anne Sigismund Huff
Kathrin M. Möslein
Ralf Reichwald
Copyright Date: 2013
Published by: MIT Press
Pages: 336
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  • Book Info
    Leading Open Innovation
    Book Description:

    In today's competitive globalized market, firms are increasingly reaching beyond conventional internal methods of research and development to use ideas developed through processes of open innovation (OI). Organizations including Siemens, Nokia, Wikipedia, Hyve, and innosabi may launch elaborate OI initiatives, actively seeking partners to help them innovate in specific areas. Individuals affiliated by common interests rather than institutional ties use OI to develop new products, services, and solutions to meet unmet needs.This volume describes the ways that OI expands the space for innovation, describing a range of OI practices, participants, and trends. The contributors come from practice and academe, and reflect international, cross-sector, and transdisciplinary perspectives. They report on a variety of OI initiatives, offer theoretical frameworks, and consider new arenas for OI from manufacturing to education. Contributors: Nizar Abdelkafi, John Bessant, Yves Doz, Johann Füller, Lynda Gratton, Rudolf Gröger, Julia Hautz, Anne Sigismund Huff, Katja Hutter, Christoph Ihl, Thomas Lackner, Karim R. Lakhani, Kathrin M. Möslein, Anne-Katrin Neyer, Frank Piller, Ralf Reichwald, Mitchell M. Tseng, Catharina van Delden, Eric von Hippel, Bettina von Stamm, Andrei Villarroel, Nancy Wünderlich

    eISBN: 978-0-262-31245-5
    Subjects: Management & Organizational Behavior

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-x)
  3. Acknowledgments
    (pp. xi-xii)

    • 1 Introduction to Open Innovation
      (pp. 3-18)
      Anne Sigismund Huff, Kathrin M. Möslein and Ralf Reichwald

      There are two different types of open innovation. The first is self-organized and self-motivated collaborative activity to achieve a common goal. The second is an organizational strategy to broaden innovation boundaries, often while retaining internal R&D capabilities as well.

      An example of open innovation driven by individual contributors is the surprising speed with which publically sourced Wikipedia challenged the niche that the Encyclopedia Britannica had dominated for two centuries. As described in chapter 11 by Andrei Villarroel, in 2000 the Encyclopedia Britannica was employing 4,000 experts to compose a rather expensive 32-volume set of books that contained 65,000 articles written...

    • 2 Open Innovation at Siemens AG
      (pp. 19-34)
      Thomas Lackner

      In 2009 Siemens had around 56,000 active patents and spent €3.9 billion on R&D, or 5.1 percent of its revenue. This was accomplished in large part by 30,800 R&D employees based in 176 locations worldwide, a huge community in itself, with its own size-centric challenges. In this chapter, I focus on the vast open innovation program in Siemens that augments the internal research community in churning out successful product and service innovations.

      Siemens has always had a strong, historical emphasis on innovation. The company was started 150 years ago with a telegraph line from India to England, which it pre-financed,...

    • 3 The Need for Speed: Fostering Strategic Agility for Renewed Growth
      (pp. 35-54)
      Yves Doz

      Mikko Kosonen and I looked at how successful, innovative companies become victims of their success and then attempt to regain strategic agility. Our bookFast Strategy¹ reports on the causes of such failures, provides a model of strategically agile companies, and explains how some maturing firms recapture the strategic agility that once allowed them to innovate while others do not. We believe strategic agility requires a form of strategy making that has similarities with open innovation. We were particularly concerned that there was an increase in corporate rigidity across organizations at the very time more agility was crucial. This concern...

    • 4 Leading Innovation
      (pp. 55-68)
      Rudolf Gröger

      As a company CEO I can get all of the technological expertise I want. If I need fifty A-rated electronic engineers, it is easy to hire them. If I need 500, I just hire 500. And if I want more, I go to China. Obviously, if these resources are available to everybody, the difference between an average company and a very successful company is not technology, but due to the “soft factors” that leadership must provide. By extension, innovation is much less about technology than about the capacity to lead innovation.

      The iPhone is not a product of the twenty-first...

    • 5 Open Innovation: Actors, Tools, and Tensions
      (pp. 69-86)
      Kathrin M. Möslein

      How can patients with an orphan disease stimulate research activity to help solve their daily, but often almost unknown health problems? How can a city or region create a mindset of energy-efficient behavior among its citizens? How can a firm find solutions to R&D problems that could not have been solved within its own R&D department? How do individuals with unsolved needs find solutions developed by others, or failing that, design and potentially market their own unique ideas?

      Fifty years ago, the answer to all these questions would have been that solutions for such difficult problems were almost never available....


    • 6 Opening Organizations for Innovation
      (pp. 89-104)
      John Bessant and Bettina von Stamm

      It is not easy to recognize a currently successful innovator, in part because a good reputation can hide problems. We know a well-known Danish medical devices producer, for example, that enjoys a dominant market position and has received multiple awards for innovation. It has deep competencies around skin/wound care, in part because of its active user paradigm, which regularly draws on panels of nurses for input.

      Yet when we visited the company, managers were not as happy as we expected them to be. One manager said, “People get all these good ideas, but there’s nowhere to take them.” There also...

    • 7 Cooperation for Innovation
      (pp. 105-116)
      Lynda Gratton

      “Hot spots” of energy and potential innovation can arise when people, often working across functional, national, and organizational boundaries, are able to work energetically and effectively together on critical tasks. I named my bookHot Spotsafter this phenomenon because it captures so well the transient and high-energy nature of these groups and communities. For innovators, the capacity to encourage hot spots to emerge by drawing on varied sources from both within and beyond the organization is crucial to the capacity of hot spots to create new sources of value.

      Historically there have been a number of waves of value...

    • 8 User Innovation
      (pp. 117-138)
      Eric von Hippel

      Ever since Schumpeter (1934) promulgated his theory of economic development, economists, policy makers, and business managers have assumed that the dominant mode of innovation is a “producer’s model.” That is, it has been assumed that most important innovations would originate from producers and be supplied to consumers via goods that were for sale.

      This view seemed reasonable on the face of it—producers generally serve many users and so can profit from multiple copies of a single innovative design. Individual users in contrast, depend on benefits from in-house use of an innovation to recoup their investments. Presumably a producer who...

    • 9 Co-creation with Customers
      (pp. 139-154)
      Frank Piller and Christoph Ihl

      The main objective of a company engaging in co-creation is to enlarge its base of information about needs, applications, and solution technologies that resides in the domain of customers and users creation (Piller and Ihl 2009; Ramaswamy and Gouillart 2010). The methods used to achieve this objective include but go beyond tools described in chapter 5: user idea contests (Ebner et al. 2008; Piller and Walcher 2006; Füller 2010), consumer opinion platforms (Hennig-Thurau et al. 2004; Sawhney, Verona, and Prandelli 2005), toolkits for user innovation (von Hippel and Katz 2002; Franke and Piller 2004), and communities for customer co-creation (Franke...

    • 10 Contributions by Developers
      (pp. 155-170)
      Karim R. Lakhani

      If fifteen years ago you had gone to SAP, Microsoft, or Oracle and said that a bunch of strangers on the Internet will get together somehow and start creating software without any direct monetary incentives, without traditional managerial controls, and without any long-term plans, they would have just laughed at you, saying there is no way that would happen. But today we see that open source software communities have become a legitimate and important component in the way software gets developed. It has surprised us all to see this new form of organization appear and do so well.

      It is...

    • 11 Strategic Crowdsourcing: The Emergence of Online Distributed Innovation
      (pp. 171-200)
      J. Andrei Villarroel

      Back in year 2000 few people would envision that a valuable project could be successfully developed by individuals spread around the world without any contractual ties or physical offices, and for free or almost for free. What seemed a far-fetched idea only a decade ago has fueled the creation of humanity’s largest knowledge repository, Wikipedia, the most extensive multilingual social network site, Facebook, and the first general-purpose human computer, Amazon Mechanical Turk.

      The value created through these and other online platforms is undeniable, as twoTimemagazine’s Person of the Year awards now attest.¹ One was granted to “You” in...


    • 12 Educating Open Innovation Ambassadors
      (pp. 203-220)
      Anne-Katrin Neyer and Nizar Abdelkafi

      Tim, Paul, and Luisa, caricatured in figure 12.1, have just received their university degrees and are ready to start their first job. However, they are asking themselves: Are we well prepared? Do we have the skills to do a great job in an increasingly global, virtual, technology-mediated, work environment? Are we ready for what Lynda Gratton (2011) recently called “the shift,” that is, the future of work? At the same time their potential employers are asking similar questions: Who can we hire with the ability to interact with others who have different backgrounds, functions, and interests (Neyer et al. 2009)?...

    • 13 Viral Marketing on Facebook for a New Open Innovation Platform
      (pp. 221-240)
      Catharina van Delden and Nancy Wünderlich

      Consumers are growing tired of traditional advertising and marketing campaigns (Phillips and Noble 2007). TV watchers often record their favorite shows so that they can leap over advertisements. Internet surfers use ad-blockers. Even those who prefer newspaper and magazine content have a tendency to read online—where advertisement blockers are installed. As traditional advertising thus seems to lose efficiency and coverage, more effective alternatives for reaching desired audiences have to be identified.

      Ideas and messages about products and services spread the fastest when people talk about them and recommend their favorites to others (Goldenberg et al. 2001). Every company’s marketing...

    • 14 The Future of Crowdsourcing: From Idea Contests to MASSive Ideation
      (pp. 241-262)
      Johann Füller, Katja Hutter and Julia Hautz

      Groups of people with highly diverse skills and professional backgrounds can often outperform an internal R&D department of a company in coming up with innovations (Tuomi 2003). Hence organizations are looking for ways to collaborate with employees from different departments and organizational backgrounds, as well as with customers, suppliers, and other partners outside the organization’s boundaries. They are increasingly aware that they need to tap into both internal and external knowledge sources to accelerate innovation (Darroch 2005; Leonard-Barton 1995).

      To connect several thousand innovative people scattered all over the planet, a number of methods and tools such as virtual customer...

    • 15 Open Manufacturing
      (pp. 263-278)
      Mitchell M. Tseng

      In recent years open innovation has been accepted as a concept not only among academics but also among those in business and industry. It embodies the free flow of ideas for innovation across boundaries that were considered insurmountable in the past. Scaling down these boundaries, be they organizational, functional, cultural, political, or social, has unleashed significant new human capabilities and transcended nonproductive barriers for greater wealth of the economy at large.

      The questions addressed in this chapter are about extension of openness to a comprehensive context that includes not just ideas but also physical materials involved in producing tangible goods....

  7. Epilogue: Learning to be More Competitive, More Cooperative, and More Innovative
    (pp. 279-292)
    Anne Sigismund Huff, Yves Doz and Karim R. Lakhani

    In this concluding conversation we suggest that the definition of strategy is changing and that learning how to innovate helps organizations move away from formulaic behaviors. Innovation is often hampered by what people think they know, by purely competitive behavior, hoarding knowledge, resisting ideas that are “not invented here,” continuing to do what worked in the past, and putting managers at the center of information collection and analysis. New ways of working can be found in the world’s largest and most successful organizations but also in organizations pressed to invent by economic necessity. Managers are trying to find balance, especially...

  8. Peter and Hannelore Pribillaʹs Vision for Practical Research
    (pp. 293-294)
    Ralf Reichwald
  9. Contributors
    (pp. 295-308)
  10. Index
    (pp. 309-322)