When Choosing Open Innovation Tools, Does One Size Fit All?

by Eugene Ivanov

Given the level of excitement the concept of Open Innovation has caused in the media in recent years, one would assume that this approach has become a common tool used by organizations to achieve their innovation goals.

Indeed, this year’s study by Henry Chesbrough and Sabine Brunswicker shows that large companies in Europe and the U.S. are increasingly using open innovation in their business practices. However, when asked which specific open innovation tools they employ the most, the respondent chose customer co-creation, informal networking and university grants. At the same time, crowdsourcing and working with open innovation services providers (OISP) were rated lowest in importance.

This is somewhat sobering news. Although undeniably “open” in their nature, co-creation, informal networking and academic collaborations are not exactly new approaches: companies have been using them for years. It is crowdsourcing that has been hailed instead as a hallmark, almost a new normal, of the Open Innovation era.

The Chesbrough and Brunswicker study echoes an earlier report by Robert Cooper and Scott Edgett published in 2008. Cooper and Edgett looked at techniques that 160 companies used for product innovation, more specifically, at the front (“ideation”) end of the product innovation process. They found that the most popular techniques were voice-of-customer (VOC) methods, such as customer visits and focus groups. In contrast, open innovation approaches were unpopular and perceived ineffective. In particular, using external innovation portals and idea contests, vintage crowdsourcing techniques, were considered the least popular and the least effective. Both studies, when taken together, seem to contradict the popular belief that crowdsourcing has become a mainstream open innovation tool.

One of the reasons for the apparently slow acceptance of crowdsourcing as innovation approach is that using this technique requires special expertise. Take, for example, OISP. Some pundits put the worldwide number of OISP at around 200. Just navigating this crowded marketplace isn’t an easy job, and choosing “wrong” OISP may well become a reason for the failure of any crowdsourcing project. Besides, as many open innovation practitioners would vehemently argue, effective use of crowdsourcing requires careful definition of the problem to be crowdsourced, something that many companies aren’t good at. A lot of work is therefore needed in the future to help companies understand how to use crowdsourcing approaches in the most productive way.

Another thing that has to be kept in mind is that the bulk of our knowledge about open innovation practices comes from studying consumer good companies, such as P&G, Kraft Foods or General Mills. It looks quite natural that VOC methods would be very effective in customer-oriented innovation process. But does one size fit all? What about high-tech companies producing complex products? Will VOC approaches be equally useful, for example, in the highly regulated and burdened with IP issues pharmaceutical industry? Or pharmaceutical companies would preferentially benefit from using crowdsourcing? We need further studies to answer these important questions.

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Internal Innovation Networks - foundation for successEugene Ivanov is innovation consultant helping organizations establish internal and external innovation programs. He also assists his clients with selecting and defining R&D problems that can be successfully solved by using crowdsourcing approaches. He tweets at @eugeneivanov101.

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  1. Thanks for this very interesting article, I am delighted that the more and more the concept of open innovation is discussed and this article shows its problematic very well !

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