Open innovation is a term that has been in the spotlight since its first formal introduction. However, over the last few years, companies are beginning to develop a serious interest in its potential benefits. Whereas the benefits of closed innovation (sometimes referred to as ‘internal innovation’) are clear, the fear to embrace open innovation for some is still real.
So what are the benefits of open innovation and should your company fear it or embrace it?
What is Open Innovation?
When open innovation was first introduced as a concept in 2011, a fairly high-level Forbes article came with it.
In his own words, Henry Chesbrough, the man who first coined this term, defined it as:
a more distributed, more participatory, more decentralized approach to innovation.
Since then, we have simplified a few components.
At its core, modern open innovation is all about the inclusivity of ideas and creativity from external sources. While traditional innovation efforts are often limited to one company alone or even teams within a company, open innovation is all about learning more from external sources to find the best innovative ideas.
Common Benefits Associated with Embracing Open Innovation in a Company
Companies that utilise open innovation are also opening themselves up to a long list of benefits.
When you think about it, the sheer act of opening up your idea pool can bring a lot of really beneficial gains that will help you to find the best new idea rather than just a new idea.
1. Greater Access to New Ideas
Given its open nature, open innovation automatically helps companies to gain immediate access to more ideas.
Since companies that embrace open innovation are not immediately limiting themselves to a select few people, they are able to receive more ideas from people who otherwise would not have given their input.
When we keep idea sharing in-house, we ultimate limit ourselves to the few people that are working on innovation efforts.
Opening this up allows us to learn a lot more and really improve our pool of potential ideas.
Sometimes the best idea is not from someone in the room, and that is okay.
2. Better Overall Understanding of a Problem
Another of the key benefits to embracing open innovation is the fact that companies generally gain a broader understanding of the problems that they are trying to tackle.
With external input, companies are able to learn more about the problem outside of their limited scope of view.
Working with individuals who know about the industry — especially those who work in it — can help you to gain a better understanding of the problem on a much larger scale.
This helps you to understand the problem in a more open and versatile fashion.
And it can actually lead to more effective innovation.
3. Higher Levels of Creativity
Creativity is at the root of all innovation efforts, and the world is full of creative people.
Most companies know that not every single person they employ is the best or the most creative. And when you are brainstorming for new ideas, you don’t just want a room full of creative people. You need a mix of different styles and viewpoints to broaden the discussion and achieve your goal.
Sometimes the most creative ideas come from other people who have seen the need for innovation from a different angle.
4. Break from Internal Thinking
Internal thinking is both a benefit and a problem for innovation efforts.
It is always good to have people working on innovations that are familiar with how you do business.
However, this can also be limiting.
People who have all seen the same problem the same way have a higher chance of zeroing in on specific details that might not be the best point of focus.
Including external sources in the innovation process can help to challenge “the norm” of how things are done.
When you challenge the “norm” this is where change can happen. Often for the better.
Bring diversity and creativity to the brainstorming process with Open Innovation.
Our Idea Management Software has the capability to bring suppliers, customers and partners to ideate with you.
Talk to us. We will show you how.
5. Increases Knowledge Sharing
There are a lot of talented and educated people in the world who know things that you might not, which is why embracing them is so beneficial.
When we consciously make the decision to work with others, we learn.
People often know things that we don’t and have different points of view. Choosing to include them is a great way to gain access to what they know.
While most of us like to think that we know what we need to in order to help our businesses thrive, we can’t really know everything.
Some information only becomes available from experience, which is why using external parties who do know the industry can be so helpful.
It allows us to learn from others instead of just sticking with what we know.
72% of companies have admitted to missing opportunities that would have contributed to growth, and a lot of the time, this comes down to knowledge.
The more we know, the better we can compete.
Open innovation is a process that more companies are opening up to because they see that it offers them a chance for the best solutions available.
Collaborative efforts allow us to really focus on what is available everywhere, not just where we are.
When we allow ourselves to embrace the creativity and information that is available outside of our walls, we empower ourselves to find innovation efforts that are better and designed to offer more.