Introduction
For years, companies have been working closely with external partners. For instance, through joint projects with universities; they gain access to the latest findings from pure and applied research, which can be used by their internal research and development organizations. However, when it comes to Open Innovation (OI), it goes one step further and integrates external problem-solvers into the innovation process. This methodology is also taking place at Siemens. When it comes to a company’s R&D department, it is no longer the only source of innovation. Thus customers, suppliers, companies, and online communities also play a crucial role in development process. Based on the analysis of the Harvard Business Review Article about Open Innovation at Siemens (2003), company was involved in the process of OI on the initiative of two people, Dr. Thomas Lakner, head of CT’s Open Innovation and Scouting and Dr. Norbert Luetke Entrup, head of the Technology and Innovation Management group within Siemens Corporate Technology unit (CT) (Hutter et al., 2013). The case outlined ways Siemens promoted Open Innovation within an organization and the challenges managerial board faced implementing it. The main questions of the case are whether Siemens should pursue Open Innovation or give up on it and how Siemens should overcome challenges when implementing Open Innovation Processes. The main challenges mentioned in the case were the organizations’ complex structure and top down
Innovations form the main sources of competitive advantages and are always of significance for the growth of a company. Companies or organizations put their greater efforts in improving their performance by finding new ideas and knowledge on the best way of beating their competitors and therefore give satisfaction to their customers. There are various factors involved in the innovation design system which can be either internal or external.
Key goals of this paper will be to provide a structure for thinking about innovation across the fields, highlight important streams of research on innovation, suggest interrelationships, and provide taxonomy of related topics.
Innovation is an important factor to enhance and differentiate Raytheon’s offerings from those of the competitors. The company’s success depends on its ability to develop new and innovative products and technologies in responding to the customer’s critical needs. Brown (1991) pointed out that “Innovation can be a powerful method of securing a sustainable competitive advantage in both growing and mature markets” (p. 196). Although technological innovation is the most recognizable type, it’s worth noting that innovation can come from anywhere and anyone in the organization. For Raytheon, there’s an innovation center at every major Raytheon’s sites to encourage new and innovative ideas from any employees, any functions, or grade levels.
Open innovation is to find and take advantage of new opportunities to advance their technology. Open innovation permits you to obtain and flesh out ideas collaboratively, leading to sustained innovation. Merck & Company should use outside sources as well as inside sources to have a more advance company. Outside info is very useful to the company because it is where individuals strive to develop the best resolution to the innovation challenge the company has set forth. . One of the core benefits of open innovation is that it allows companies to grasp outside their organizational restrictions and tap into the external expertise of a broader set of people than they could otherwise influence. While open innovation thoroughly raises the accessibility of information by finding extremely talented associates for scientists to work together, it also certainly leads to the loss of individual control over hypothetically priceless technology.
In this article, we report on a study of the strategies and practices used by firms that achieve greater success in their collaborative innovation efforts. The aim was to build on prior work that provides evidence of the value in a more “open” approach to innovation, and to explore an emerging theme in these studies; that firms must consider more than just lower cost when looking at the benefits from collaboration.1 Our research was
These R&D labs usually concentrated on bringing out new technologies for self-commercialisation. This process can be viewed in the form of a funnel, where a large number of varied ideas and concepts can be trimmed down to few of those concepts and ideas that best meet the requirements of the company. (OECD, 2008) In recent times, companies have become more open with their innovation process, leading to revolution described as “Open Innovation” by Chesbrough (2003). This ‘open innovation’ model is a more dynamic model when compared the traditional model as there is much more interaction between knowledge assets outside the company as well as inside. Henry Chesbrough (2003) in his book “Open Innovation: New Imperative for creating and profiting from technology” defines open innovation as a concept in which companies must use ideas from inside as well as outside sources and find internal and external ways to reach the market in order to advance their technological capabilities. Open innovation combines these 3
Tidd and Bessant (2009) argued that “Unless an organization is able to move into further innovation, it risks being left behind as others take the lead in changing their offerings, their operational processes or the underlying models that drive their business”.
Many similarities can be seen between Beiersdorf open innovation strategy and the successful P&G model ‘Connect and Development’. Both strategies have the function to explore outside the boundaries of the firm and to include the valuable knowledge found into the product development process (open innovation strategy). Moreover both companies, in order to link internal resources and R&D centres with the outside world, have implemented different ‘bridges’ into their respective business models. In particular, Beiersdorf ‘s open innovation strategy has been based on:
As the term suggests, User Innovation describes innovation created by any form of user, in contrast to the “traditional” innovation approach which focuses on the producer only. It forms a major part of the current trend of Open Innovation, which is expected to become an essential part and standard in most companies’ innovation management within the next 10 years. Open Innovation in this context means “the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and to expand the markets for external use of innovation, respectively” (Chesbrough, 2006). In general, Open Innovation is a comparably new field of study defined in the late 1980`s, and research focuses still mostly on case studies
Included with this full-text Harvard Business Review article: 1 Article Summary The Idea in Brief—the core idea 2 How Open Innovation Can Help You Cope in Lean Times
In today's dynamic and unstable operating conditions of enterprises the ability to innovate is a key factor of survival and success of the organization. Innovations in this case are understood in a broad sense – it means not only to create and offer a new product, but rather the ability of the organization continually develop creative solutions to problems and challenges. In this regard, the role of intangible assets of the organization, especially the knowledge and experience, should be possessed by members of the organization. The concept of "learning organization” forms the approach to management, allowing the most efficient use of data
From the above analysis we can conclude that the outbound open innovation can really improve enterprise performance. Then, we would like to know how is it to create value for those companies? It is a very sophisticated problem, previous researchers have not make an in-depth analysis for a long time. In order to unravel this ‘ mystery ’, we have to introduce the innovation value chain to help us unlock the ‘secrets’. Van de ven et al.(1999) pointed out that innovation is a variety of roles intertwined, and a complex process of intervention. The innovation process is poorly understood, and at the same time innovation is being enveloped in an unobservable ‘black box’. Subsequently, Hansen&Brkinshaw(2007), Roper, et al.(2008) and other scholars drew on porter 's value chain theory, and introduced the idea of the ‘chain’, the knowledge commercialization of the innovation process is seen as a flow value chain, the three main components including knowledge production, knowledge transfer and knowledge diffusion. Until now, the understanding of the essence of the innovation process has been greatly enriched, and the ‘black box’ of the innovation process seems to have been gradually open. It is the time to
2) Chesbrough, H., W., (2003). The era of open innovation. MIT Sloan Management Review 44 (3): 35–41.
In March 2009, PT launched the ‘Open’ project with the aim of ‘industrialising’ the innovation process, to
innovation system to make it more open. The Whirlpool approach to open innovation is a