A few weeks ago I had a grumble about the social business movement, and how it seems that it is struggling to justify some of the initial hype surrounding it with tangible results. Of the various other social based movements impacting the organizational world, open innovation is arguably the most successful.
After all, a paper published this year by Henry Chesborough highlighted that 78% of organizations around the world are currently practicing open innovation. It’s a hefty claim indeed.
The study, undertaken in partnership with Sabine Brunswicker from Purdue University, surveyed 125 large companies (determined by > $250 million in revenue), and found that not only is open innovation already widely used, but the amount of support for it is on the rise.
The researchers believe that the study is the first of its kind to truly explore the depths to which open innovation is currently used in large organizations.
“Open innovation is adopted by firms from low-tech as well as high-tech sectors. For example, wholesale, trade and retail firms reported engaging in some form of open innovation,” Brunswicker said. “This suggests that open innovation is not just a high-tech phenomenon driven by firms in the information and communication technology sector.”
That isn’t to say that it has proven universally popular. For instance, it has proven much more popular in high-technology than in financial services. Nevertheless, the researchers claim that once the open innovation door has been pushed ajar, no company has ever returned to their old, closed ways of working. Indeed, the survey results revealed that of those that had tried open innovation, 71% had seen an increase in management support, with 82% increasing their level of open activity.
“Overall, our results indicate that open innovation is not yet pervasive among large companies, but it is widely practiced,” said Chesbrough.
Interestingly, it emerged that despite the outward facing nature of open innovation, most organizations still regarded their own employees as the main source of new ideas and solutions. Indeed, a key factor was the integration of the external with the internal.
On a slightly less optimistic note is the cultural issues that still surround openness. The survey suggested that organizations are much happier to receive information openly than they are to make their own information open to outsiders. The report suggests that this is something that partner organizations need to be aware of to prevent any potential exploitation by their larger partners.
The ROI of open innovation
The survey also shed some light on what it is executives want in return from their open innovation projects. It may seem an obvious answer to give, as the outcome of a competition is quite evident, but the study revealed that the outcomes hoped for evolved as experience with the approach deepened.
The study concludes by highlighting the positive reception to the approach across the board, suggesting that it is a concept that is here to stay.
“This evidence suggests that open innovation is not a fad, but rather a persistent phenomenon,” Brunswicker said. “On the other hand, although firms are positive about their open innovation programs, their positivity is just lukewarm. Yet the fact that no firm had abandoned open innovation in spite of these lukewarm perceptions suggests that firms are still learning how to get better results with open innovation.”