When you normally think of open innovation, you probably think of high tech and knowledge intensive industries. Biotech for instance or engineering. They’re the kind of sectors where having a vast amount of intellect to throw at a problem is a wonderful thing.
An industry you don’t perhaps think of the restaurant business as being in the same league. Can they gain a cutting edge by applying the principles of open innovation?
The Chez Panisse restaurant in California suggests that might not be a wise assumption however. The restaurant has grown a reputation as one of the finest purveyors of Californian cuisine.
A case study produced by Henry Chesborough and Sohyeong Kim highlights the role open innovation has played in their growth.
For instance, the restaurant has built up an extensive collaboration network, including suppliers, customers and of course, employees. Heck, they even include their rivals in the network.
It’s all part of the restaurants ‘open kitchen’ approach that allowed both chefs and diners to co-create the dishes on the menu. This was then grown to involve the people charged with getting the food to the table, placing the restaurant at the heart of a complex local food ecosystem.
This smart positioning encouraged local producers to start sending their best produce to the restaurant.
At the heart of it all was the intense culture of trust that owner Alice Waters has built up at the restaurant. I’ve written before about the fundamental role trust plays in any social business, and it’s certainly been the case at Chez Panisse.
“Alice Waters has a management style that can only be described as ‘very Berkeley’, but that approach has meant the staff feels immense loyalty to the restaurant and to one another,” the case study says.
When designing your collaboration network, there are three broad designs you can look to incorporate.
- Hub and spoke – Like the wheel of a bicycle, the hub and spoke model sees your company placed firmly in the middle, with spokes then representing the links outwards to your collaboration partners. Such a network sees your company as the most important member of the network, as few (if any) of your partners are connected to one another. Such a model was used very successfully by Apple, and represents the opportunity to make revolutionary advances in innovation, due to the powerful position you have at the centre of the network, pulling in information from an often disparate range of partners.
- Integrated model – The integrated approach to network building sees a significant growth in connectivity between your partners. In this kind of model it is more of a partnership of equals, where each member brings something valuable to the network. Members typically share the same types of information and are more likely therefore to develop common norms due to the frequent exchange of information. This type of model is excellent for complex projects that require extensive collaboration and iterative innovations.
- A hybrid design – The final approach to network building reflects a combination of these two approaches, whereby some of your collaboration partners are connected, and some aren’t. As you can imagine, the more this network leans towards one or other of the first two designs, the more it will reflect their respective merits. So the less connections it has, the more suited to breakthrough innovations, whilst the more connections, the more suited it is to collaboration and cooperation.
The example from Chez Panisse shows a clear hub and spoke approach to network building, with the restaurant at the center, but few of the collaboration partners really working between themselves.
If you’re looking to expand your open innovation network, there are a number of strategies you can employ.
Look for substitutes
Substitutes in this context are the companies that make things that offer customers an alternative to what you’re offering. Tea and coffee for instance are often used as examples of such products, but when it comes to collaboration, you need to think a bit more creatively than that. Look at the companies that make substitute products and see if there are any strategic and cultural fits with your own. Once that has been identified you can explore whether a new business model could allow you to collaborate effectively with them.
Look for complementary partners
The opposite to a substitute partner is one that complements your offering. What products or services exist in the market that make your own more valuable? Figure out which of these companies aren’t already working with one of your existing partners, and if they have a strong fit with you in terms of culture, strategy, resources etc. then they could be a good company to collaborate with.
Look for rivals of your partners
When you’ve developed a good understanding of the collaboration ecosystem you exist within you’ll hopefully gain a good understanding of who your partners compete with. As part of this process you can begin to explore whether any of these companies might be cooperative with you and whether collaborating with them might give you greater leverage over your existing partner.
Look for new entrants
New entrants to any marketplace can bring an exciting number of possibilities, yet due to their relative lack of status, they can often struggle to build collaboration partnerships with larger players. This can be a good opportunity to attract key technological breakthroughs or talent to your organization. Keep an eye on the market for new entrants and maintain a good understanding of the capabilities of each. If they are a good fit with your own organization then they could make strong collaboration partners.
Look for direct competitors
The final possible way of securing new open partnerships seems a counter intuitive one. The standard heuristic is that you’re competing against rival companies, therefore working with them is not something you should aspire to do. That isn’t to say some might not make good collaboration partners however. Think through whether any of your rivals have a good cultural fit with your own, and whether either of you could benefit from pooling resources or knowledge.
The Chez Panisse case study provides us with a nice reminder that this sort of planning is not refined to high tech industries. It’s something that can apply to most organizations.