Open Innovation: The New Imperative for Creating And Profiting from Technology

books:


	• Open Innovation: The New Imperative for Creating and Profiting from Technology Henry William Chesbrough Harvard Business School Press, 2003 - 227 pages average customer review:based on 19 reviews view larger image
	for more information click here

Open Innovation: The New Imperative for Creating And Profiting from Technology

HS has once again written a compelling book. Same lines as Tushman: how to use new technology and profit from it - or how to use external resources and profit from them (cf. Teece, dynamic capabilities or resource based view of the firm, and knowledge based view of the firm)

Open Innovation

In many parts of the world, the researches setting off from similar thoughts may put forth similar ideas. In the gradually developing information era, accessing this information is much easier. Open Innovation appears as a book supporting the concept of outsourcing in R&D. In this book, not only benefiting from the technology, but also the activities required to achieve it are explained. So, a new vision is provided to companies' innovation processes. This book is a study supporting the rapid development of opening out with regard to innovation.

for more information click here

Good

This is a useful book. Open innovation is a very old idea but the author does a good job explaining what it is and how it can be helpful -- and even essential -- to an enterprise. The fact is that most companies are doing some version of this today but they could do much more. The hard part is in getting real value out of the partnerships that can be formed while overcoming internal issues, such as NIH. The author says little about these other problems that limit the effectiveness of open innovation.

A "new vision" of the innovation process

I recently re-read Henry Chesbrough's Open Business Models and then this book, first published in 2003. In the earlier work, Chesbrough explains that a business model "performs two important functions: it creates value and it captures a portion of that value. It creates value by defining a series of activities from raw materials through to the final consumer that will yield a new product or service with value being added throughout the various activities. The business model captures value by establishing a unique resource, asset, or position within that series of activities, where the firm enjoys a competitive advantage."

Having thus established a frame-of-reference, Chesbrough continues: "An open business model uses this new division of innovation labor - both in the creation of value and in the capture of a portion of that value. Open models create value by leveraging many more ideas, due to their inclusion of a variety of external concepts. Open models can also enable greater value capture, by using a key asset, resource, or position not only in the company's own business model but also in other companies businesses."

What we have in Open Innovation is a development of this concept in much greater depth. As Chesbrough explains, what he characterizes as "Closed Innovation" has a number of implicit rules such as "The company that gets an innovation to market first will usually win" and "We should control our intellectual property, so that our competitors don't profit from our ideas." As a result of several "erosion factors" that have undermined its logic, Chesbrough asserts, the Closed Innovation paradigm is rapidly becoming obsolete. (Please see Table 1-4, "Contrasting Principles of Closed and Open Innovation," on Page xxvi in the Introduction.) "When the innovation context shifts from Closed to Open, the process of innovation must change as well."

Chesbrough carefully organizes his material within nine chapters. In the first, he examines one of the most familiar examples of a company (Xerox Corporation) that selected technologies from its research laboratory (Palo Alto Research Center) that fit its business model, and rejected others. Apple was among the major beneficiaries of that process. "Xerox's management of its PARC technologies illustrates in a nutshell the transition from Closed Innovation to Open Innovation. Chesbrough examines the Closed Innovation Paradigm is analyzed in Chapter 2 and the Open Innovation Paradigm in Chapter 3, then offers a business model in Chapter 5 that illustrates how to connect internal and external innovation. For me, some of the most valuable material in the book is provided in this chapter. Then in the next three chapters, Chesbrough focuses on three major corporations: IBM and its transformation from Closed to Open Innovation (Chapter 5), Open Innovation at Intel, (Chapter 6), and the New Ventures Group within Lucent Technologies organization (Chapter 7).

In the last two chapters, Chesbrough first shifts his attention to a critically important subject, the management of intellectual property (IP) in the innovation process. "In a world of abundant knowledge, companies should be active buyers - and active sellers of IP." Earlier in his book, Chesbrough had explained why ideas that are not readily used could be lost. They and the people who create them "no longer can be warehoused until the companies' own businesses are ready to make use of them. Companies that do not use their ideas with alacrity risk losing them - and the people who thought of them - to outside organizations." Of course, as Chesbrough explains in Chapter 4, the value of an idea is determined by the given business model. "There is no inherent value in a technology per se. The value is determined instead by the business model used to bring it to market." Apple gratefully embraced technologies that Xerox had rejected.

How to complete the transition to a more Open Innovation system? Chesbrough responds to that question in the last chapter, providing a number of strategies and tactics. He recommends devising a strategic map that identifies the given organization's recent innovative ideas as well as those within its industry. On Page 178, he provides a list of questions to ask while completing the map, a document best viewed as "a work in progress." He then offers rock-solid advice on how to proceed with the "roadmap." As I absorbed and digested Chesbrough's brilliant insights on these and other key business issues prompted me to recall my own involvement with a number of organizations that struggled - with mixed success - to complete that process. I now presume to share some of the most important lessons I learned:

1. When designing and implementing an "open" business model, the first requirement is that everyone involved has both an "open" mindset (i.e. receptive to new ideas, whatever their source may be) and is not only willing but also eager to collaborate with others within and beyond her or his own organization. So-called "conventional wisdom" is often a justification for defending the status quo.

2. When setting objectives, focus on the most serious problems to solve and on the most important questions to answer.

3. With regard tracking progress, measure only what really matters...and do so with accuracy and consistency. Meeting deadlines, for example, as well as first-pass yield and cycle time. Be especially alert for variances.

4. Have "open" communication, cooperation, and collaboration at all levels and in all areas throughout what should be viewed as an extended enterprise. There is so much of value to be learned from associates, of course, (especially in other departments), but also from customers, vendors, strategic allies, and other stakeholders within the given value chain. Moreover, Chesbrough cites examples of situations in which valuable information was obtained (legally) from competitors.

5. Open Innovation is a journey of discovery. Therefore, view all problems as learning opportunities. Focus on determining their root causes rather than merely responding to their symptoms.

The final paragraph of the Introduction offers an appropriate conclusion to this commentary. By then, Chesbrough has shared a new vision of the innovation process. "This vision eagerly seeks external knowledge and ideas, even as it nurtures internal ones. It utilizes valuable ideas from whatever source in advancing a company's own business, and it places the company's own ideas in other companies' businesses. By opening itself up to the world of knowledge that surrounds it, the twenty-first-century corporation can avoid the innovation paradox that plagues so many firms' R&D activities today. In so doing, the company can renew its current business and generate new business. For the innovative company in a world of abundant knowledge, today can be the best of times."

for more information click here

reviews: page 1, 2, 3, 4

In today's information-rich environment, companies can no longer afford to rely entirely on their own ideas to advance their business, nor can they restrict their innovations to a single path to market. As a result, says Harvard Business School professor Henry W. Chesbrough, the traditional model for innovation--which has been largely internally focused, closed off from outside ideas and technologies--is becoming obsolete. Emerging in its place is a new paradigm, "open innovation," which strategically leverages internal and external sources of ideas and takes them to market through multiple paths.

This path-breaking analysis is based on extensive field research, academic study, and the author's own longtime experience working in Silicon Valley. Through rich descriptions of the innovation processes of Xerox, IBM, Lucent, Intel, Merck, and Millennium, and the many spin-offs that have emerged from these firms, Open Innovation shows how companies can use their business model to identify a more enlightened role for R&D in a world of abundant information, better manage and access intellectual property, advance their current business, and grow their future business.

Arguing that companies in all industries must transform the way they commercialize knowledge, Chesbrough convincingly shows how open innovation can unlock the latent economic value in a company's ideas and technologies.
AUTHORBIO: Henry W. Chesbrough is an Assistant Professor and the Class of 1961 Fellow at Harvard Business School.

for more information click here

hot or not? What's your opinion? Write a review and share your thoughts!

imperative

Open Innovation: The New Imperative for Creating And Profiting from ...
The Entrepreneurial Imperative: How America's Economic Miracle Will ...
The Moral Imperative of School Leadership
The Territorial Imperative: A Personal Inquiry into the Animal ...
The Generational Imperative: Understanding Generational Differences ...

innovation

The First Days Of School: How To Be An Effective Teacher
Made to Stick: Why Some Ideas Survive and Others Die
Blue Ocean Strategy: How to Create Uncontested Market Space and Make ...
The Art of Possibility: Transforming Professional and Personal Life
The Game-Changer: How You Can Drive Revenue and Profit Growth with ...

profiting

Open Innovation: The New Imperative for Creating And Profiting from ...
Intermarket Analysis: Profiting from Global Market Relationships ...
Hard Facts, Dangerous Half-Truths And Total Nonsense: Profiting From ...
7 Winning Strategies for Trading Forex: Real and Actionable ...
Stan Weinstein's Secrets For Profiting in Bull and Bear Markets

search for books
the new imperative, creating, from, imperative, innovation, open, profiting, technology

Impressum / about us