Open Digital Innovation or Closed Digital Innovation?

by Paul Hobcraft

Open Digital Innovation or Closed Digital Innovation? - Innovation Excellence“Are you going all digital on me with your innovation activities?”

So there we all were, getting really very comfortable in our open innovation activities, learning to collaborate and co-create outside our organizations. Even our management has got “open innovation”.

We are encouraged and allowed to collaborate outside our four walls of the organization as the penny has finally dropped that “not all knowledge resides within the company”.

We had worked through some of the cultural stuff, shifted around the team who like to collaborate, pushing others less collaborative to the back; the conflict points, we had established the process, practice and tools.

We even have our legal teams on board helping sort out all the conflicting positions that open innovation can mean when it comes to dividing up the IP spoils and even had our leadership tuned in, singing our praises and even (heavens forbid) getting engaged in the process.

When the world shifts, so must we

Then suddenly the world shifts on its axis once again, everything seems to be digital. The buzz is big data, analytics, smart mobility, and social media, with lots of talk of interconnected devices giving us the next big paradigm in innovation growth.

So will my innovation portals, my collaboration platforms, my idea capture tools or my crowd-sourcing and patent scanning techniques all get thrown up into the air, or are they going to be squeezed into this new digital pot?

Many are struggling with the sudden talk of big data; all of it flowing into the organization, when many of us were simply struggling with what we thought was big enough data being generated already.

What and where is this digital actually going and what does it mean to us?

How fast will the digital revolution come into my organization? Are any of us ready for this latest onslaught? Do we have the new skills all of these digital technologies need? Does this mean I have to talk again to the IT department?

So many questions are bubbling up on digital technology; it is going to be hitting us like a tsunami, at a potentially destructive force. There is a time to find the high ground and I’d recommend to start now.

We will be faced with two choices as my ‘open’ thinking here

We will either go from open innovation to open digital innovation or we will revert back to closing up and trying to manage all this data within a closed system or network. So is this another moment for open vs closed debate, just with digital included to make it ‘open digital innovation’ or, is it closed digital innovation?

Will there be a difference? I think so…

First we will need to debate the ‘network effect’. Metcalfe’s Law “that the value of the network is in proportion to the number of members squared”. In other words, the evaluation of how strong a network is will be determined by the numbers connected. As we use technologies and leverage the internet the greater our intelligence will flourish. So open digital or closed digital?

Secondly, exploiting the ‘digital effects’ will be determined by the value it can generate. The more open the data infrastructure is, the more the networks and open hardware can collect, generate information; extract actionable value and increased awareness. So open digital or closed digital?

The excitement that digital is expected to generate is in delivering the significant insights of unmet needs or current frustrations of our customers in far more ‘granular’ ways than without digital’s help.  What is being dangled in front of us is anticipated solutions.

Are we ready, can our organizations cope?

The more ‘everyone’ connects on the internet through the Internet of Things (IoT) then we will be experiencing even more of a bigger transformation. They forecast 5 billion additional people will connect to the internet globally in the next ten years all wanting to ‘give voice’.

Today we talk of ‘high-speed’ I just wonder on when ‘the day the internet broke’ or simply taking speed and putting it is greater context such as ‘managing in open innovation ecosystems to deliver the speed’.

So which way will we go? Open digital innovation or closed digital innovation?

Either into the creation and consolidation of monopolies of knowledge (closed digital innovation) or open ecosystems to foster grassroots ideas, social innovation to resolve growing problems, entrepreneurship or giving the nimble and savvy business organizations the chance to pull even more ahead in exploiting.

Each is going to demand a massive mobilization of resources, internally and externally. The digital world is more enmeshed in our lives; we are living in more ‘real-time’ than ever before that continues to form a universal distributed intelligence. We are all going to keep learning new skills and tools for understanding all this ‘collective intelligence’ coming at us.

The battle for control lies in the power of digital understanding

Question: Are we going to have a battle of competition based on open standards so as to benefit from inter-operability between this data streaming in, the multiple devices we have, and growing services and networks that we require to manage it all?

Question: Or will we see some attempting for lock-in engagements, striving for anti-competitive dynamics to steal competitive advantage and undermine swaths of ‘not able to compete’ or ‘far too slow to see it coming’?

Question: Will we see platforms that we can all sign up and join in that link all the value chain providers, each seeking their part of the value chain that will allow for replicable, scalable and sustainable solutions or shall we stay narrow in scope and ambition?

Can we afford too, if the world is connected outside our window, yet we continue to struggle looking out?

Whatever, digital feeding innovation will reign supreme in the forthcoming years or will it?

We are exploring all the current trends in digital technology promising to give us embedded intelligence in our devices, social activity, plenty of social and business platforms to join in and lots of mobility to keep us on the move, we seem to be heading off into a new world where digital will reign supreme.

All this data streaming in, either open or closed in collaborative management seems to be promising a wave of new innovation opportunities.

We have to decide which digital technologies are good for us and, are we throwing open the innovation digital doors or simply limiting it down, trying to control it for our sole competitive advantage?

Presently we are seeing the race to build platforms – but are they (really) open or (selectively) closed? So will we see open digital innovation or a specific type of closed emerge?

For me it must be open, really open, for all to participate and build from.

image credit: fabbaloo.com

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Paul Hobcraft runs Agility Innovation, an advisory business that stimulates sound innovation practice, researches topics that relate to innovation for the future, as well as aligning innovation to organizations core capabilities. Find him @paul4innovating

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