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My Starbucks Idea : an Open Innovation Case-Study

How Starbucks gathered more than 150,000 ideas and created new products and services by engaging its community.

Since opening its first store back in 1996, the Seattle-based coffee behemoth now includes almost 30,000 coffee shops around the world and is valued at a staggering $30 billion . A strong commitment to open innovation has helped to drive this incredible growth.

This zest for open innovation led to the "My Starbucks Idea" platform, a customer participation experiment. Now that the company has retired this platform after nearly ten years, we thought it would be a good opportunity to look back and ask a few questions.

So, what can a case study of the "My Starbucks Idea" platform tell us about open innovation? What were the benefits to Starbucks from managing this platform, and how can other businesses take advantage of these benefits?

Pour yourself a little cold brew, and we’ll show you how it all came together.

How did they do it?

As a company, Starbucks has always placed a lot of value on refining its products and procedures following customer feedback. In the company’s earliest years, this was reflected in simple systems like suggestion boxes and customer surveys.

In 2008, however, founder Howard Schultz launched the open innovation platform "My Starbucks Idea". This platform encouraged customers and fans to share their ideas and suggestions for how to make the company’s beloved products even better.

“We need to put ourselves in the shoes of our customers,” Schultz said at the time . “That is my new battle cry. Live and breathe Starbucks the way our customers do.”

As it turns out, the as-yet undecided 2020 Presidential candidate was on to something. Starbucks customers had a real thirst to share their ideas: over the first five years of operation, the platform received over 150,000 ideas, and the company put hundreds of them to use.

The format was simple. All customers had to do was create a profile, write (and categorize) their suggestion, and submit it for others to comment on. If the idea gathered enough steam, or if the Starbucks administrators liked the looks of it, it could then be adopted by the company.

Plenty of companies crowdsource product ideas via customers. So, what made "My Starbucks Idea" unique?

What made "My Starbucks Idea" unique?

"My Starbucks Idea" was a lot more than just a fancy suggestion box.

To help encourage a community of fans, Starbucks enabled users to vote and comment on ideas they liked. There was also a public leaderboard showing the most dedicated fans, as well as those with the most popular ideas.

Users could also see profiles for the Starbucks ‘Idea Partners’ - the company representatives tasked with managing and monitoring online discussion and working with customers on their suggestions. This helped put a human face on the company.

This blend of open innovation, customer co-creation, and fan community site proved immensely popular. Not only did it create a lot of great product innovations for Starbucks, but it also helped to drive increased customer loyalty.

Through actively managing the "My Starbucks Idea" platform, Starbucks engaged customers, making them feel they were being listened to. By rolling out fan-driven ideas like cake pops and pumpkin spice lattes, Starbucks created greater product diversity.

In June 2018, after almost a decade, the company retired the "My Starbucks Idea" platform. Starbucks still encourages its customers and fans to submit their suggestions for new products on Twitter , of course, as well as via its website .

Now, let’s dig into the detail a little more. What were the results of the "My Starbucks Idea" platform, and what can these results tell us about customer-driven innovation?

Cake pops and pumpkin spice: the results of "My Starbucks Idea"

By paying attention to customer preferences, Starbucks was able to hold its spot as the market leader, even in a rapidly changing industry like the food and beverage sector.

The "My Starbucks Idea" concept was based on a core belief: customers know what they want.

The company’s commitment to this concept led to fans submitting over 150,000 ideas, of which hundreds were adopted. And these weren’t just run-of-the-mill suggestions, either - they include fan favorites like hazelnut macchiatos.

More than just receiving product suggestions, however, the platform also led to suggestions around process improvements, including finessing Starbucks’ mobile payment systems and offering free Wi-Fi.

For a better overview of the range of innovations submitted through the "My Starbucks Idea" platform, check out the following infographic, published in 2013:

These examples demonstrate the value of open innovation. By handing power over to customers, and by giving them an incentive to participate by recognizing their ideas, Starbucks was able to channel a lot of crowd creativity.

So, it’s clear that the "My Starbucks Idea" platform led to a huge amount of valuable product innovation. But beyond just suggesting new drink flavors, what were the wider benefits of this experiment?

What were the benefits for Starbucks?

First, there’s the obvious benefit: empowering customers to make suggestions for product improvements meant that Starbucks had access to new, and potentially very valuable, ideas. Many of these were things that would only have occurred to dedicated customers.

The "My Starbucks Idea" platform created significant benefits for Starbucks.

Besides the simple value of these ideas, however, the platform also helped generate a lot of media attention and free advertising. By encouraging die-hard fans to engage online, Starbucks created a new way to market their products to their most valuable customer segment.

The platform also served as a market research tool, too. Many thousands of fans signed up to submit their ideas, and in doing so provided the company with demographic information. This allowed Starbucks to build detailed customer profiles.

The benefit didn’t go just one way, though: Starbucks customers also got plenty of value out of the platform. By engaging with the company, customers experienced a greater sense of inclusiveness, with the platform helping to build a real community.

It wasn’t all sunshine and rainbows, however. As significant as the benefits were for both Starbucks and its customers, the "My Starbucks Idea" platform still created a number of risks to be managed.

How did Starbucks manage the risks of open innovation?

As we’ve seen in the examples of General Motors crowdsourcing advertisement suggestions on Twitter, handing the keyboard over to the customer can open a company up for online criticism, and even harassment.

Sometimes, open innovation can be something of a double-edged sword.

For "My Starbucks Idea", this risk was definitely present. Starbucks employees were required to sift through the online ideas and comments on a regular basis to weed out any trolling or abuse , and to prevent the platform from becoming a tool for corporate mockery.

Managing the risks of online abuse and platform misuse took a lot of dedicated resources, requiring an active approach from the company. Despite a strict set of community guidelines, the platform still required a lot of moderating.

But enough about the negative stuff. What can "My Starbucks Idea" tell us as a case study in open innovation, and how can you put these ideas to use in your own business?

How to make open innovation work for you

As we’ve seen in our article on ten companies showing us how to get it right when it comes to customer co-creation, successful open innovation takes careful planning and foresight.

If you want to make open innovation work for you and your customers, you need to:

• Appeal to the intrinsic motivations of your fans and customers
• Set clear limits and guidelines for the exercise
• Encourage and reward different perspectives

Embrace open communication

Let’s take a closer look at these things one by one.

Appeal to intrinsic motivations

Whether it’s a beer fan giving Anheuser-Busch suggestions on their new line of craft lager , or the LEGO community suggesting new toy sets , nobody ever wants to give away a great idea for free. If a product suggestion is valuable, it’s only fair that a company should pay for it.

So, before you ask your customers and fans to put on their thinking hats, give them a reason to participate in the exercise. Whether it’s monetary compensation, public recognition, or a mixture of the two, there should be something on the line if their idea succeeds.

This is something Starbucks got right with its open innovation platform. Not only did fans get the public recognition associated with having their names attached to the ideas, they were also eligible for monetary compensation, too.

Set clear guidelines and limits

Sometimes, a little structure can be a great way to encourage creativity.

Rather than simply asking fans for ideas, "My Starbucks Idea" included guiding categories for suggestions. These included ‘products’, ‘atmosphere & location’, ‘service systems’, and others. These categories helped guide the submissions process and helped stimulate fan creativity.  

Starbucks also set clear community guidelines to help manage online exchanges, too. This not only gave customers a more secure environment in which to share their ideas, it also cut down the amount of work for Starbucks employees managing the site. Win-win!

Encourage different perspectives

The true value of open innovation rests in the ability to encourage customers to share different perspectives on a product or service. After all, you can have the world’s most amazing thinkers on your payroll, but having access to a broad pool of opinions will still get the best ideas.

Starbucks really got this right with "My Starbucks Idea". By actively encouraging and rewarding a range of perspectives and values, the company was able to unlock the innovative potential of a huge number of people, with great results.

If you’re thinking about how to embrace open innovation, make it a priority to encourage people with a range of different perspectives, opinions, and life experience to participate.

When it comes to encouraging innovation , open communication is a must - especially given the rise of company representation on social media platforms like Twitter and Instagram.

Businesses need to engage their customers with transparency, consistency, and, above all else, respect. If open innovation participants feel they’re being listened to, and are getting a trusted source of information, they’re more likely to contribute.

Once again, Starbucks really nailed this with "My Starbucks Idea". By communicating regularly with fans, and providing a clear source of dependable information about the platform, Starbucks was able to build trust and reward fans for their ideas.

For Starbucks, open innovation is much more than just cake pops.

Don't just take it from us - here is Matthew Guiste, one-time Director of Social Media at Starbucks, talking about the value of open innovation for the company.

https://www.youtube.com/watch?v=pjNM8drAqG0

By unleashing the creative potential of its diverse customer base via the "My Starbucks Idea" platform, Starbucks was able to source valuable new product ideas, engage with their most dedicated fans and gather market information to stay on top of trends.

All it took was a little investment in a web platform, some community guidelines, and a commitment to open communication. That’s a small price to pay for such a valuable tool.

Jonathan Livescault

Former Strategy Consultant turned Entrepreneur. Excited to help every day corporate innovation teams get results and build their company's future.

Want to fix your innovation engine and deliver results now?

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A guide to open innovation (with case studies)

Daniel Saunders

Chief executive officer.

The following guide delves into what open innovation means and the different models available to your corporation. We’ll analyse why you would choose to pursue an open innovation solution over a closed innovation approach and examine innovation case studies from P&G, Metro Bank, United Utilities, and Nivea.

What is open innovation? 

Open innovation is primarily about partnerships and collaboration. It’s about identifying and connecting with innovative ideas, solutions, people, or companies to drive value, solve problems or explore new opportunities. 

The term open innovation (OI) was coined by Henry Chesbrough , a professor at UC Berkeley. He described it as trading ideas in and out of an organisation to accelerate innovation and open up the organisation to using more external ideas. 

The definition suggests two important aspects that characterise open innovation; 

• The “outside-in” aspect brings external ideas into a company’s innovation process.  
• The “inside out” aspect is where ideas from within the company are shared externally. 

Types of open innovation  

Open innovation means companies seek collaborators to innovate and co-create alongside. Types of open innovation include open innovation labs , accelerators, incubators, M&As, and hackathons. Often the most fruitful open innovations involve unconventional partnerships.

Advantages of open innovation 

When you want to develop a new idea via open innovation, you have two main options; buy or partner.  

• Buy an existing innovation. Buying a company that owns an innovation is much faster than trying to build something yourself, sometimes by decades. The other advantage of buying is you usually own the innovation and any IP outright and can customise it as necessary. C orporate Venture Capital can be an alternative to a full takeover, allowing companies to test the waters with smaller investments into potential acquisition targets, whilst also bringing in additional revenue from the investment. 
• Partner to implement an innovation. Partnering is the quickest and cheapest option, but the compromise is that you don’t fully own the idea. That’s why finding the right company to partner with and validating their ideas for your use cases is essential. This is where corporate innovation labs and accelerator programs add immense value—scouting for global ideas, assessing the fit between businesses and use cases, leading agile development and validation phases, etc. 

Case study: P&G shifts from a $2bn annual spend on internal R&D to open innovation

Proctor and Gamble (P&G) are one of the world’s largest FMCGs businesses. Their market position as a global leader can be connected to their long history of innovation, starting with the launch of their R&D department in 1890 to launching Connect + Develop , their open innovation program in 2002. 

But after generations of internal closed innovation, what prompted the shift to open innovation?

Former P&G CEO A.G. Lafley spearheaded the change in 2000 after realising that the business couldn’t meet its growth objectives by throwing more money at R&D (at the time, they were spending more than $2bn annually on R&D). 

But Lafley had noted that over the decades, many of P&Gs most successful innovations came from “unlikely connections, approaches and ideas.” Such as technology invented for one industry enabling innovation in entirely different industries. Or how company acquisitions allowed P&G to form strategic external connections that lead to “commercially successful products.”

Based on these insights, Lafley set an internal company goal that 50% of all future product innovations should be developed with one or more external partners. At the time (2000), only 10% of product innovations involved outside partners. 

P&G managed to exceed the target before the end of the decade. The result of increasing open innovation to 50% had a massive impact on the corporation, which Lafley himself summarises;

“…company sales more than doubled, profit tripled, free cash flow quadrupled, and P&G’s stock price nearly doubled in a decade when the S&P 500 index was actually down.” A.G. Lafley

What’s needed for open innovation to succeed? 

Corporations’ biggest mistake is seeing a cool idea and shoehorning it into their business. Inevitably this approach fails. 

While there’s no set open innovation model, one thing is always essential, and that’s structure. Innovation means change; incorporating a new idea or process into an existing system requires the system to change to meet it (or the idea to change to meet the system), e.g. changing your current processes, people or mindset. That’s why any new idea must be tested and validated to ensure it’s the right fit before incorporating it into business as usual. 

Three open innovation case studies 

1. united utilities found innovation success through a structured open innovation approach .

Since 2017, L Marks has run the Innovation Lab for the UK’s largest listed water company, United Utilities, which manages the water network for more than seven million people.

The innovation lab comprises a 12-week program that moves through several stages to advance the innovation. For example, all the teams participating in the innovation lab run live trials in real business environments to validate their ideas and over 90 United Utilities employees are called upon to mentor the teams based on their subject matter expertise. 

Applying their tried and tested program meant the L Marks scouting team got in front of 1500 businesses, received over 400 applications, and accepted over 30 teams into the program from France, Portugal, Canada, Australia, India, and the UK. 

This structured approach to open innovation meant that United Utilities made framework agreements with over half of the program participants.

Kieran Brocklebank, Head of Innovation at United Utilities, explains why their Innovation Lab brings about such novel innovations; “Interestingly, all the suppliers we are working with would label themselves as small or startup, and five of them had never worked with a UK water company before. They all have a completely different energy to a large corporate like United Utilities, which is exactly what you need to disrupt the status quo.”

2. Nivea co-created a best-selling deodorant with customers 

Nivea used “netnography”—mining online customer reviews and comments—to gain insights about how customers used their products. They realised that customers had two major gripes when using their deodorant,

• Yellow stains on white clothes 
• And white deodorant stains on black clothing. 

Before diving into product development, Nivea contacted customers online and asked for their feedback about which new product characteristics would be most important to them. This co-creation work led to customers providing additional ideas, which were also incorporated into the product development. 

T he Nivea R&D team then partnered with specialist chemicals company Evonik, and experts at the textile research centre Hohenstein institute, to develop a new patented technology that protected dark fabric and minimised staining on white clothes. Nivea’s “Invisible Black and White” deodorant became the company’s best-selling deodorant in its 130-year history.

3. Inside-out and outside-in knowledge sharing by Metro Bank 

Metro Bank runs the Magic Makers program, which includes Fusion , a 3-day competitive corporate innovation workshop . Fusion is open to external start-ups and internal Metro teams. Both have to compete to earn a place at Metro’s 10-week innovation lab to develop their ideas further. 

This program exemplifies open innovation. The Metro Bank team are heavily involved in the programme to share their knowledge with external startups. And by involving internal and external teams, knowledge, views, working practices, and ideas are passed inside-out and outside-in.

In the 2022 Fusion program, three winners were chosen, one of which was an internal Metro Bank team, ‘Return of the Hack’, whose idea will enable customers to access more information digitally.  The team will work alongside other external startups to develop their idea in an agile manner during the 10-week innovation lab. 

Faisal Hussain, Chief Technology Officer at Metro Bank, explained the impact; 

“Innovation Lab brings out the very best in our colleagues as they compete internally to come up with MAGIC – literally Making A Great Idea Count. They also evaluate how we can embrace and embed the start-up propositions into the practical day to day running of the Bank to realise real results that benefit our customers. The spirit of innovation is so strong in Metro Bank that an entirely internal team of colleagues has been selected over an external start-up.”

No company can survive in today’s world without some form of open innovation.

The collaborative approach characteristic of open innovation models gives companies access to innovative ideas and solutions across the globe. It provides a clear advantage over innovating internally and in isolation, especially considering the breadth and speed of today’s technological advancements. 

But rather than a silver bullet, open innovation requires structure to access it in any material way. Structure in terms of international scouting to leading agile development and market validation phases to ensure the program is a commercial success. 

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Data and Technology Insights

Open Innovation: 9 Benefits, 12 Case Studies and 12 Books

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Today we hear a lot Open Innovation , but there are a lot of people who are not sure what it means exactly. As this topic is important nowadays, we decided to write an article about it to clarify all your doubts.

What is Open innovation?

Open innovation is about combining internal resources with external ones to boost innovation culture in the company .1 For example, big companies like GE, Cisco or Microsoft , etc. tend to have 8-12 different value pools, for instance, think suppliers , startups, customers or universities, etc. to consider for their open innovation efforts.

In other words, open innovation is a business model that encourages you to connect with outside sources so you can profit from exciting new startups and product opportunities, get a broader pool of talent, collaborate with others to come up with innovation that you could never do just by yourself.

Now, large multinationals including Kraft, KLM, Pfizer, and Siemens actively and openly participate in collaborative, online innovation communities where seekers and solution providers work together. Much the way tech companies use hackathons to get outsiders to contribute to their goals, OI-committed businesses announce proudly that they’re taking full advantage of the global innovation community. That transparency demonstrates to the market that they have a clear strategy for the future and they’re aggressively pursuing it out in the open.

Open innovation may seem to be for big business. But it is an approach that can be used by all companies, especially start-ups and small businesses. It may be as simple as inviting a trusted supplier to help you develop ideas or launching a website , etc.

So, find the right collaborators! One of the most visible open innovation actions these days are suggested websites or special places on the web that invite customers and the general public to submit ideas on how to improve a company’s products and services. And then, on these websites companies publish a hackathon info to find the right partner with the most brilliant idea.

9 Benefits of Open Innovation

1. creating new products and services.

Especially when you’re a startup, there’s nothing more exciting than getting your first product out on the market. But it’s easy to get stuck, focusing all your efforts on selling your first product rather than thinking of what else you could provide for your customers. It can be scary to invest time and resources into creating a new product, especially taking into account that startups have a limited budget. Yet, by investing your resources and the resources of the third parties into creating something new, that you know will bring value to your community. This move may help you increase your profits and create buzz around you.

2. Innovating old products and services

Sometimes, you don’t need to create new products. Sometimes, your older service has a potential to be better, has potential to attract a lot of clients. This is when you need to get a creative team together to improve your idea. One of the benefits of open innovation is that the process never ends. You’re always thinking about how you can make your organisation better.

3. Building a strong community

Lego is a great example of how a company can engage their fans on a wide scale by using open innovation. No matter the size of your organisation , a great benefit of open innovation is taking the time to get in touch with your fans and your soulmates, news talents. Get to know what your community wants, and then give it to them. In the process, you will find that enthusiastic community members are willing to dedicate their time and ideas to help you create something better. These relationships are key and will help your company build a strong community dedicated to your project.

4. Keeping your employees engaged

One of the main sources of employee dissatisfaction is a lack of feeling of ownership on the projects they work on. Sometimes, your team may have some great ideas but might not feel comfortable bringing them forward. By bringing an open innovation initiative to your workplace, your team can get involved in big picture planning, make it their project. When people feel more invested in the bigger goals of the organisation, it makes them more excited to come to work in the morning and put their heart and their soul in it.

5. Staying ahead of the competition

By keeping your team and your community engaged and on the lookout for new ideas, you make sure that your organisation stays helpful and relevant to your community. Using open innovation can help you find your niche that makes your organisation uniquely valuable to the community.

6. Costs reduction

When you work with other companies, you split the costs. Moreover, you become more efficient because of each company; each member works on what he is good at.

7. Time-to-market acceleration

Instead of figuring out how to make the desired product, train your people, buy equipment, etc., you just start a collaboration with a company that already has all this, that allows you to bring a product to market faster.

8. New revenue streams

Did you know that some businesses get more revenue from secondary products rather than from the primary ones? Working with other companies will allow you to enter a new market with an idea and product you have.

9. Innovation risk reduction

Any innovation has risks, but if you work with experts, you minimise your risk of failure, especially if you agile and get feedback from your target on a regular basis.

Let’s look at open innovation case studies

GE is one of the leading companies implementing different open innovation models. Their Open Innovation Manifesto focuses on the collaboration between experts and entrepreneurs from everywhere to share ideas and passionately solve problems. Based on their innovation Ecomagination project that aims to address environmental challenges through innovative solutions, GE has spent $17 billion on R&D and received total revenues of $232 billion over the last decade. GE is famous for their open innovation challenges and initiatives on their open innovation page. Through these challenges, GE familiarises itself to future potential talents.

For example the Unimpossible Missions: The University Edition challenge is targeted for students that are creative, have a certain level of technical skills and a clear recruitment motivation. Through the challenge, GE aims to get three smart and creative students to have their internship at GE.

Another example is GE’s project First Build, a co-create collaboration platform, which connects designers, engineers, and thinkers to share ideas with other members who can discuss it together. It is one of the open innovation models that aims to provide a platform that can help both external and internal individuals to collaborate in terms of ideas sharing and manufacturing to reach innovative ideas for products and services.

Open innovation was also adopted by NASA to build a mathematical algorithm that can determine the optimal content of medical kits for NASA’s future manned missions. To reach an innovative software who can solve this problem, NASA collaborated with TopCoder, Harvard Business School, and London Business School. The application of open innovation created a cost-effective and time-effective solution that could not be reached using the internal team alone.

Currently, the company is adopting open innovation models on levels between the team and other entrepreneurs from one side and the company and its consumers from the other. The Coca-Cola Accelerator program aims to help start-ups in eight cities around the world; Sydney, Buenos Aires, Rio de Janeiro, Berlin, Singapore, Istanbul, San Francisco, and Bangalore. Those start-ups aim to think in innovative ways to build a the Happiness Coca-Cola brand.

Another open innovation model presented by Coca-Cola is the Freestyle dispenser machine that allows users from around the world to mix their flavors and suggest a new flavour for Coca-Cola products. The new product records the consumer flavour so they can get it from other Freestyle machines located around the world using the Coca-Cola mobile application. This model of open innovation puts the consumers in the heart of the production process as the company uses the suggested flavours as part the external ideas that can be evaluated and processed as a new product line.

The new LEGO strategy aimed to focus on the consumer by linking both business and creativity. This strategy was known as, LEGO’s Shared Vision. To innovative new LEGO sets that can achieve success in the market, LEGO started the LEGO Ideas, an initiative based on a co-create open innovation model. In this online website, LEGO consumers can design their own LEGO sets either using LEGO bricks or computer 3D applications. Other users start to discuss the idea and vote for it, once the idea reaches a targeted vote, LEGO can consider it as a new product with giving a small part of the revenues to the creator of the set. This model contributes putting the consumer at the heart of the innovation process and help the team to target sets that can achieve success based on the LEGO Ideas votes and comments. This co-create platform can also contribute reducing the risk of innovation as these feedback from the website can give business analysts idea about the viability of the new product.

Another great open innovation step LEGO did was building a partnership between the company and MIT Media Lab to deliver programmable bricks, which was introduced as LEGO Windstorm.

Samsung adopts an open innovation to build their external innovation strengths through Samsung Accelerator program. The initiative aims to build a collaboration between designers, innovators, and thinkers to focus on different solutions. The program provides office spaces, statical capital, and product support to entrepreneurs to help them to build software and services. Samsung does open innovation collaboration, especially with startups.

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The distinctive part of Samsung’s open innovation collaboration is that Samsung divides it into four categories: partnerships, ventures, accelerators, acquisitions. Typically Samsung partnerships aim for new features or integrations within Samsung’s existing products. Ventures can be described as investments in early-stage startups. These investments can bring revenue in case of exits, but also provide access to new technologies that Samsung can learn and benefit from. For example, Samsung has invested in Mobeam, a mobile payment company.

Accelerators provide startups with an innovative and empowering environment to create new things. Samsung offers these startups an initial investment, facilities to work in, as well as some resources from their vast pool. The idea is that the products coming from the internal startups could become a part of Samsung’s product portfolio over time or just serve as learning experiences for the company. Acquisitions aim to bring in startups working on innovations that are at the core of Samsung’s strategic areas of the future. These acquisitions often remain independent units and can even join the Accelerator program.

As an example of Samsung’s collaboration with startups, Samsung has acquired an IoT company called SmartThings to gain an IoT platform without having to spend the money, and more importantly, time on R&D. Samsung sees potential in the IoT industry and views it as a strategically important part of their future business and thus an area where they want to be the forerunner. For Smart Things, it continues to operate as an independent startup fueled with the resources of a big company. With the investment potential and home electronics of Samsung, SmartThings can be developed into an integral part of Samsung products, by creating new IoT possibilities for homes.

By collaborating with startups, Samsung aims to benefit from the variety of innovations that smaller companies have already come up with. These companies often have products that can complement or be integrated into Samsung’s products, creating value for both parties.

The Entrepreneurs in Residence program allows Cisco to invite early-stage entrepreneurs with big ideas for enterprise solutions to join their startup incubation program. This includes access funding from Cisco, potential opportunities to collaborate with their product & engineering teams, co-working space in Silicon Valley and much more.

Wayra by Telefonica has been around for three years, and today, it is present in 11 countries across Latin America and Europe. It seems to be very well organised, and it is very active with more than 300 startups engaged so far.

Hewlett Packard

It is one company in particular that has embraced the ideals of open innovation. It has developed labs where open innovation thrives. It has created an open innovation team that links collaborators that are researchers and entrepreneurs in business, government and academia, to come up with innovative solutions to hard problems with a goal of developing breakthrough technologies.

Peugeot Citro”n

The French car manufacturer has launched a collaborative project to design the cars of the future and aimed at multiplying the company’s partnerships with scientific laboratories all around the world. This project materialised into the creation of a network of OpenLabs. These structures are designed to allow the encounter between the group’s research centres and the external partners. They have a goal of thinking about the future of the automotive industry, particularly according to scientific advances.

P&G’s open innovation with external partners culminates in their Connect+Develop website. Through this platform, P&G communicates their needs to innovators that can access detailed information related to specific needs and submit their ideas to the site. P&G recruits solutions for various problems all the time. Connect+Develop has generated multiple partnerships and produced relevant products.

The idea for Nivea’s B&W deodorant was coined together with Nivea’s users through social media. The way Nivea collaborated with its users throughout the R&D process is very interesting. They pretty much said that okay, we know that our current product can be connected to stains in clothes. Could you share your stories and home remedies so that we can develop a better product? Nivea then partnered up with a company they found via pearl finder and developed, together with the users, the B&W deodorant. This admittance of issues in their product could have been seen as a sign of weakness. However, users were very active in collaborating with Nivea, and the end-product ended up being a great success.

Telegram is a messenger application that works on computers and smartphones very much like WhatsApp and Line. However, what makes Telegram different is how much users can contribute to its content openly. Users with any developing skills can create their stickers and bots on the Telegram platform. Telegram also promotes the best stickers updating an in-app list of the trending stickers.

Open Innovation Books

To learn more about Open Innovation, I recommend you to read these interesting books about open innovation.

1. A Guide to Open Innovation and Crowdsourcing: Advice from Leading Experts in the Field by Paul Sloane

Open innovation is one of the hottest topics in strategy and management today. The concept of capturing ideas in a hub of collaboration, together with the outsourcing of tasks is a revolution that is rapidly changing our culture. A Guide to Open Innovation explains how to use the power of the internet to build and innovate to introduce a consumer democracy that has never existed before. With corporate case studies and best practice advice, this book is a vital read for anyone who wants to find innovative products and services from outside their organizations, make them work and overcome the practical difficulties that lie in the way.

2. Open Business Models: How To Thrive In The New Innovation Landscape by Henry W Chesbrough

In his book, the author demonstrated that because useful knowledge is no longer concentrated in a few large organisations, business leaders must adopt a new, open innovation model. Using this model, companies look outside their boundaries for ideas.

3. Open Services Innovation: Rethinking Your Business to Grow and Compete in a New Era by Henry Chesbrough

Chesbrough shows how companies in any industry can make the critical shift from product- to service-centric thinking, from closed to open innovation where co-creating with customers enables sustainable business models that drive continuous value creation for customers. He maps out a strategic approach and proven framework that any individual, business unit, company, or industry can put to work for renewed growth and profits. The book includes guidance and compelling examples for small and large companies, services businesses, and emerging economies, as well as a path forward for the innovation industry.

4. Open Innovation: Researching a New Paradigm by Henry Chesbrough, Wim Vanhaverbeke and Joel West

Authors describe an emergent model of innovation in which firms draw on research and development that may lie outside their boundaries. The book will be key reading for academics, researchers, and graduate students of innovation and technology management.

5. The Open Innovation Revolution: Essentials, Roadblocks, and Leadership Skills by Stefan Lindegaard, Guy Kawasaki

This practical guide reveals that, without the right people to drive innovation processes, your odds of success shrink dramatically. And as open innovation becomes the norm, developing the right people skills networking, communicating with stakeholders, building your brand and the ability to sell ideas is essential for your innovation leaders and intrapreneurs.

6. The Open Innovation Marketplace: Creating Value in the Challenge Driven Enterprise by Alpheus Bingham and Dwayne Spradlin

Authors Alpheus Bingham and Dwayne Spradlin draw on their own experience building InnoCentive, the pioneering global platform for open innovation. Writing for business executives, R&D leaders, and innovation strategists, Bingham and Spradlin demonstrate how to dramatically increase the flow of high-value ideas and innovative solutions both within enterprises and beyond their boundaries.

7. Online Communities and Open Innovation: Governance and Symbolic Value Creation by Linus Dahlander, Lars Frederiksen, Francesco Rullani

This book brings together distinguished scholars from different disciplines: economics, organisation theory, innovation studies and marketing to provide an improved understanding of how technological as well as symbolic value is created and appropriated at the intersection between online communities and firms. Empirical examples are presented from different industries, including software, services and manufacturing. The book offers food for thought for academics and managers to an important phenomenon that challenges many conventional pearls of wisdom for how business can be done.

8. Motivation in Open Innovation: An Exploratory Study on User Innovators by Robert Motzek

Robert Motzek’s study investigates most important factors controlling user innovators’ motivation and will derive suggestions on how manufacturers can address these points to tap the full potential of user innovation for their new product development.

9. Constructing Openness on Open Innovation Platforms: Creation of a Toolbox for designing Openness on Open Innovation Platforms in the Life Science Industry by Emelie Kuusk-Jonsson, Pernilla Book

The work benchmarks a model for designing Open Innovation Platforms and takes a theoretical standpoint in the socio-legal approach, viewing regulatory interventions and constructions of contractual and intellectual property law as the legal framework enabling the creation of openness, which in turn affects the choices made in the business arena.

10. SMEs and Open Innovation: Global Cases and Initiatives by Hakikur Rahman, Isabel Ramos

Open innovation has been widely implemented in small and medium enterprises with the aim of influencing business promotion, value gain, and economic empowerment. However, little is known about the processes used to implement open innovation in SMEs and the associated challenges and benefits. This book unites knowledge on how SMEs can apply open innovation strategies to development by incorporating academic, entrepreneurial, institutional, research, and empirical cases. This book discusses diverse policy , economic, and cultural issues, including numerous opportunities and challenges surrounding open innovation strategies; studies relevant risks and risk management; analyses SMEs evolution pattern on adopting open innovation strategies through available measurable criteria; and assists practitioners in designing action plans to empower SMEs.

11. Open Innovation Essentials for Small and Medium Enterprises: A Guide to Help Entrepreneurs in Adopting the Open Innovation Paradigm in Their Business by Luca Escoffier, Adriano La Vopa, Phyllis Speser , Daniel Stainsky

Small and Medium Enterprises have to approach open innovation differently than large companies. This practical guide to open innovation is expressly for entrepreneurs and managers in SMEs. The authors provide strategies, techniques, and tricks of the trade enabling SMEs to practice open innovation systems profitability and enhance the long-term value of their company.

12. Open Innovation: The New Imperative for Creating And Profiting from Technology by Henry W Chesbrough

This book represents a powerful synthesis of that work in the form of a new paradigm for managing corporate research and bringing new technologies to market. Chesbrough impressively articulates his ideas and how they connect to each other, weaving several disparate areas of work R&D, corporate venturing, spinoffs, licensing and intellectual property into a single coherent framework.

About Ekaterina Novoseltseva

I am a cmo at Apiumhub . Apiumhub is a software development company based in Barcelona that transformed into a tech hub, mainly offering services of mobile app development, web development & software architecture.

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Why Now Is the Time for “Open Innovation”

• Linus Dahlander
• Martin Wallin

Covid-19 has shown how companies can work together to solve problems.

As companies struggled to adapt to the fallout of the Covid-19 crisis, many turned to open innovation — a collaborative approach that plays to the strengths of all companies involved and can produce creative, unexpected solutions. It’s a kind of collaboration, the authors argue, that’s worth pursuing whether or not you’re in a crisis. Making it work, however, requires that companies: momentarily put aside traditional concerns over IP to focus on other approaches to creating value; leverage their partners’ motivations effectively to maintain a productive working relationship; embrace new partners; and commit to the projects they pursue through open innovation to reap their benefits. This approach can be extremely fruitful, and not just in the middle of a crisis.

In these difficult times, we’ve made a number of our coronavirus articles free for all readers. To get all of HBR’s content delivered to your inbox, sign up for the Daily Alert newsletter.

Amidst the gloom and doom of the early months of the Covid-19 crisis, something surprisingly uplifting started to happen: Companies began to come together to work openly at an unprecedented level, putting the ability to create value before the opportunity to make a buck. The German multinational Siemens, for instance, opened up its Additive Manufacturing Network to anyone who needs help in medical device design. Heavy truck maker Scania and the Karolinska University Hospital have partnered, too: Scania is not only converting trailers into mobile testing stations, but also directed some 20 highly skilled purchasing and logistics experts to locate, acquire, and deliver personal protective equipment to health care workers. Similarly, Ford is working together with the United Auto Workers, GE Healthcare, and 3M to build ventilators in Michigan using F-150 seat fans, portable battery packs, and 3D printed parts.

• LD Linus Dahlander (@linusdahlander) is a professor at ESMT Berlin and the holder of the Lufthansa Group Chair in Innovation. His research focuses on networks, communities, and innovation.
• MW Martin Wallin ( @mwallin ) is a professor of innovation management at Chalmers University of Technology. He focuses on innovation, strategy and digitalization.

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Open Innovation at Siemens

• Format: Print
• | Language: English
• | Pages: 19

About The Author

Karim R. Lakhani

Related work.

• Faculty Research
• Open Innovation at Siemens  By: Karim R. Lakhani and Greta Friar
• Open Innovation at Siemens  By: Karim R. Lakhani, Katja Hutter, Stephanie Healy Pokrywa and Johann Fuller

Open Innovation

Solve your organization’s problems by looking outside your organization.

In Open Innovation, you will learn strategies for finding the best ideas, solutions, and people necessary to solve your organization’s most difficult problems.

What You'll Learn

What do you do when your organization can’t solve a problem on its own? Are you paying for effort instead of solutions? Is your organization stuck?

Strategic problem solving is a key element in innovation and vital to an organization’s success and growth. Open innovation is a strategy for innovation management that suggests the best ideas and people necessary to solve your organization’s difficult problems may come from outside your company entirely. Through open innovation, organizations can connect with talented people and breakthrough ideas from across the globe. Whether you’re developing a new product, responding to the changing workforce, or simply looking for new ideas, you can use open innovation to find answers and solutions in areas you didn’t expect.  

Open innovation strategy is already all around you. The top companies around the world have figured out the key to innovation in business by using idea crowdsourcing and the wisdom of the crowd to help them create products and services that we use on a daily basis—from smartphone apps to Wikipedia. 

This is an innovation management course that presents a foundational understanding of open innovation, helping you not only solve some of your most difficult problems, but also gain access to a pool of talent that goes far beyond your organization's walls. By examining the different types of open innovation—contests, idea crowdsourcing for business, collaborative communities, and online labor markets—you’ll begin to develop a plan to adopt and implement an open innovation strategy in your organization. 

Through videos, real-world case studies, and peer interaction, you’ll build innovation skills, explore when and why to implement new solutions, how to operationalize and protect proprietary ideas, and, most importantly, how to identify the problems you’re trying to solve and address them with open innovation. 

Your next big idea might come from where you least expect it. Don’t think behind closed doors. Let open innovation in.

The course is part of the Harvard on Digital Learning Path and will be delivered via  HBS Online’s course platform . Learners will be immersed in real-world examples from experts at industry-leading organizations. By the end of the course, participants will be able to:

• Articulate the concept of open innovation and how it works
• Identify the types of problems that can be solved with open innovation and how to decouple problems from solutions
• Recognize ​the challenges and ethical considerations of open innovation, such as intellectual property rights
• Match your business problem to the right open innovation strategy, including: contests, idea crowdsourcing, collaborative communities, or online labor market
• Implement an open innovation strategy in your organization, including how to identify and access outside resources, helping you stay ahead of the competition

Your Instructor

Karim R. Lakhani is the Dorothy & Michael Hintze Professor of Business Administration at the Harvard Business School. He specializes in technology management, innovation, digital transformation and artificial intelligence (AI). He has taught extensively in Harvard Business School’s MBA, executive, doctoral and online programs. He has co-developed new courses on Digital Innovation & Transformation, Digital Strategy and Innovation, and Laboratory to Market. Karim is also the founder and co-director of the Laboratory for Innovation Science at Harvard , as well as the principal investigator of the NASA Tournament Laboratory.

Real World Case Studies

Affiliations are listed for identification purposes only.

Jin Paik is the Senior Director, Lab Operations at the Digital, Data, & Design (D^3) Institute at Harvard. Hear from this expert researcher how open innovation can illuminate novel solutions for your organization. 

Luis Villa is the Co-Founder and General Counsel of Tidelift, a startup that aims to make open source better for everyone by supporting developers. He will share how open innovation can attract talented employees to your organization.

Lynn E. Buquo

Lynn Buquo is the Former Senior Advisor at the NASA Center of Excellence for Collaborative Innovation. She will share how NASA is adopting open innovation into their organization.

Available Discounts and Benefits for Groups and Individuals

Experience Harvard Online by utilizing our wide variety of discount programs for individuals and groups. 

Past participant discounts.

Learners who have enrolled in at least one qualifying Harvard Online program hosted on the HBS Online platform are eligible to receive a 30% discount on this course, regardless of completion or certificate status in the first purchased program. Past Participant Discounts are automatically applied to the Program Fee upon time of payment.  Learn more here .

Learners who have earned a verified certificate for a HarvardX course hosted on the  edX platform  are eligible to receive a 30% discount on this course using a discount code. Discounts are not available after you've submitted payment, so if you think you are eligible for a discount on a registration, please check your email for a code or contact us .

Nonprofit, Government, Military, and Education Discounts

For this course we offer a 30% discount for learners who work in the nonprofit, government, military, or education fields. 

Eligibility is determined by a prospective learner’s email address, ending in .org, .gov, .mil, or .edu. Interested learners can apply below for the discount and, if eligible, will receive a promo code to enter when completing payment information to enroll in a Harvard Online program. Click here to apply for these discounts.

Gather your team to experience Open Innovation and other Harvard Online courses to enjoy the benefits of learning together: 

• Single invoicing for groups of 10 or more
• Tiered discounts and pricing available with up to 50% off
• Growth reports on your team's progress
• Flexible course and partnership plans 

Learn more and enroll your team ! 

Who Will Benefit

Research and Development Teams

Access resources and learn how to find new ideas for products and solutions

Entrepreneurs

Discover how to leverage the crowd and find the next breakthrough idea systematically

Innovative Leaders

Grow your business by knowing when and how to integrate open innovation into your organization

Learner Testimonials

" This course was worth my time and I thoroughly enjoyed communicating and learning with innovative thinkers from around the world. This was a great experience, and I am grateful my administration invested in me in this way to continue learning and growing so I could better do my job and help more humans. "

Dr. Lindsey Keith-Vincent Associate Dean for  Research, Outreach, and Innovation in the College of Education Director of the Science and Technology Education Center (SciTEC) Louisiana Tech University

"Since I have already studied Open Innovation for my PhD, I am impressed by all the new knowledge and insights that I have gained. I like the different perspectives and the great case studies, which have been very supportive in many ways."

Prof. Dr. Rafaela Kunz Professor of International Management, Technology and Innovation Hochschule Fresenius

"This course provides enough details, tips, and real-world examples to utilize open innovation as a strategy within any organization. It helped explain the different tools, platforms, tactics, and flexibilities to use depending on the business outcomes required. This course saves a lot of time in understanding all the nuances of open innovation rather than learning it on the job. I should have taken this course earlier!"

Ed Wong Director of Possibilities HeroX

"I work in marketing, and am always looking for new ideas to develop and implement constant innovation. The content, cases, and examples helped me understand how this topic is applies in real life, and definitely added lots of value to my professional interest. I am likely to leverage this knowledge in my career."

Thelma Trinidad Marketing Consultant Fast Moving Consumer Goods

Syllabus and Upcoming Calendars

Learning Requirements: There are no required prerequisites to enroll in this course. To earn a Certificate of Completion from Harvard Online, participants must thoughtfully complete modules 1-6 by stated deadlines.

Download Full Syllabus

Download January 2024 Calendar

• Study the NASA case on fostering a culture of open innovation.
• Identify the benefits of open innovation and how it can be applied.
• Evaluate and compare open innovation strategy to traditional problem solving methods.
• Study the HYVE case to understand problem formulation and iterative design.
• Understand why problem formulation is critical to a problem holder’s ability to find the best solution.
• Identify barriers associated with problem formulation, and learn how to overcome those barriers.
• Study the Dana-Farber Cancer Institute case to learn about their contests for medical imaging AI.
• Understand how and why contests work and the benefits and challenges presented by open innovation contests.
• Develop a plan for an open innovation contest for your organization.
• Study the Tidelift case's examples of innovation and open source software for all. 
• Explore the potential benefits of collaborating with or creating a community.
• Identify the management challenges of working with communities and how to address them.
• Study the Freelancer case to learn about unlocking the potential of online labor markets.
• Examine the supply and the demand sides of online labor markets.
• Identify and overcome barriers to adopting labor markets in your organization.
• Revisit the NASA case to understand how they scaled open innovation
• Understand how to overcome barriers to adoption and scaling.
• Prepare a plan to pilot and scale an open innovation solution for your organization.

Earn Your Certificate

Enroll today in Harvard Online's Open Innovation course.

Still Have Questions?

Are there discounts available for this course? What are the learning requirements? How do I list my certificate on my resume? Learn the answers to these and more in our FAQs.

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HCL's Digital Open Innovation: Enhancing Business Model Effectiveness through Talent and Customer Acquisition, Development, and Retention

By: Solomon Darwin

This case study provides an illustration of how the intersection of new digital technologies--mobile devices, cloud computing, and online collaboration--is now transforming the way organizations will…

• Length: 23 page(s)
• Publication Date: Jul 31, 2015
• Discipline: Information Technology
• Product #: B5843-PDF-ENG

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This case study provides an illustration of how the intersection of new digital technologies--mobile devices, cloud computing, and online collaboration--is now transforming the way organizations will conduct business in the future. In late 2014, faced with the challenges of the inherent inefficiencies of operating within a $6.8 billion corporation--with over 110,000 employees located across 31 countries--and contending within the hyper-competitive $1 trillion global IT services industry, divisional executives at India-based HCL Technologies took the initiative to launch "Starting Point," an internal centralized digital platform, for two of its key verticals -- Life Sciences/Health Care and Public Services -- that made up 20 percent of the company's revenue. Realizing that many of its current employees were already leading "digital lives" and were now almost always connected to their personal handheld devices, this new centralized digital platform had two key goals by making company data more readily-available on mobile phones and tablets: 1) to enhance the new hire on-boarding process and 2) to empower employees so that they could have more-effective customer discussions that would ultimately lead to more business-to-business sales. By making this transition from analog to digital, HCL Technologies executives believed that Starting Point would improve organizational agility, hasten internal decision making and increase employee efficiencies. This case tells the Starting Point story in three parts: Recognition of the need for a centralized digital platform and mobile strategy; execution of the initial digital platform over a six-week period; and an evaluation of the digital platform's benefits. The case also describes how the Starting Point project benefitted from HCL's entrepreneurial culture, which has been part of the company's DNA since its founding in 1976.

Learning Objectives

The purpose of the HCL case is to show how the concepts of technological change, open innovation, digital innovation, business model enhancement, company culture, teamwork, and project management can be applied to the information technology (IT) services industry.

Jul 31, 2015

Discipline:

Information Technology

Geographies:

California, India

Industries:

Business consulting services

UC Berkeley - Haas School of Business

B5843-PDF-ENG

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16 Examples of Open Innovation – What Can We Learn From Them?

Despite years of hype and countless studies, many still find open innovation an abstract concept.

Even though a few common key success factors for open innovation can be named, there’s plenty to be learned from companies who’ve actually been using open innovation.

This post gathers  examples and key learnings   from a wide range of companies using open innovation in different ways .

Some of them use open innovation to add value to their hardware, while others use it to gain more information for developing new products.

Think about the different types of co-operation, key stakeholders and potential collaborators. How do you motivate them to participate? The stakeholders from our examples of open innovation range from product users to smaller companies, that complement the product or help solve your problems, all the way to scientists and individuals wanting to participate in order to learn new skills and gain valuable experience.

1. Quirky - Crowdsourcing product ideas to be manufactured

You might have heard about Quirky , a community-led invention platform. The concept behind Quirky is that you can put your product idea up on Quirky and others within the Quirky community can comment and contribute to your idea.

If the idea is good and gains traction, it can be developed further by people on Quirky.  

The Quirky community

Quirky members have a wide range of special skills, so you can collaborate with those that complement your expertise. Thus, the ready product is developed by the community.

The best products on the platform are chosen by Quirky for manufacturing and sold at the  Quirky store . The process at this point is financed by Quirky, so having your own company and resources isn’t crucial for your product’s success.

But why would people share their expertise and develop ideas that are then manufactured and sold by Quirky?

• You can get your product idea out there with much less effort. If you  want to make your idea a reality, Quirky offers a simple way to do so.
• You can learn and get to use your talent to acquire more experience to put to your CV, and perhaps be one step closer to your dream job.
• I f the product ends up being a success you can  earn money from being part of developing it.  If the idea is originally yours, you may get royalties depending upon its success. This is what makes Quirky an active platform with an active community.

Practical takeaways  

The practical teaching from the Quirky example is that there is a way to get people ideating for you even for free.

By assessing problems that many have to deal with or by creating challenging tasks, people get motivated to collaborate with you. To cultivate this collaboration and create an active community, an appealing online presence will go a long way to make sure people find you.

2. Samsung - Diverse types of collaboration

Even though you might recognize Samsung from several plagiarism case convictions , Samsung has also been qualified as one of the most innovative big companies   today. Of course, Samsung has a major internal R&D unit, but the company is also a proud open innovation advocate and does open innovation collaboration especially with startups.

The distinctive part of Samsung’s open innovation collaboration is that Samsung divides it to 4 categories .

The four categories are even described as being the "four legs of the open innovation activities" at Samsung. The 4 categories of collaboration:

• Partnerships
• Accelerators
• Acquisitions

Partnerships are essentially collaboration between companies, such as startups in Silicon Valley. Typically partnerships aim for new features or integrations within Samsung’s existing products.  

Ventures can be described as investments into early stage startups. These investments can bring revenue in case of exits, but also provide access to new technologies that Samsung can learn and benefit from. For example, Samsung has invested in Mobeam , a mobile payment company.

Accelerators provide startups with an innovative and empowering environment to create new things. Samsung offers these startups an initial investment, facilities to work in, as well as some resources from their vast pool. The idea is that the products stemming from the internal startups could become a part of Samsung’s product portfolio over time or just serve as learning experiences for the company.

Acquisitions aim to bring in startups working on innovations that are at the core of Samsung's strategic areas of the future. These acquisitions often remain independent units and can even join the Accelerator program.

Collaboration with Startups As an example of Samsung’s collaboration with startups, Samsung has acquired an IoT company called SmartThings to gain an IoT platform without having to spend the money, and time on R&D.

Samsung sees potential in the IoT industry and views it as a strategically important part of their future business and thus an area where they want to be forerunner.

Practical takeaway  

By collaborating with startups, Samsung aims to benefit from the variety of innovations that smaller companies have already come up with. These companies often have products that can complement or be integrated to Samsung’s own products, creating value for both parties.

On the other hand, the kind of companies that aim for new innovations requiring high initial investments are typically better invested in or just acquired.

So, the main learning point from the Samsung case is that different kinds of companies at different stages of their lifespan offer different kinds of possibilities. You should identify these and figure out the methods that best match the different kinds of opportunities.

3. Local Motors - Co-Creation in a community

Local Motors activates its open community through its Co-Create platform . The designed vehicles are then manufactured through, for example, 3D printing.

The key part in Local Motors’ product development is its completely open innovation platform. You don’t even need to be registered to their platform-site to see the new designs that the community has envisioned.

Like in most other open innovation companies, the innovations are coined through open innovation challenges, like the LITECAR challenge .

In 2015 Local Motors had an Urban Mobility Challenge: Berlin 2030, the aim of which was to envision the future of transport in Berlin. Now, one year later one of the envisioned transport solutions has already seen daylight. It’s one of the most known Local Motors Co-Creation products, Olli , the self-driving smart bus.

Apart from being self-driving, Olli also works through your phone. You can choose your routes through Olli or even create new ones. Olli is not just some envisionment of the faraway future, it’s actually  hitting the streets of Washington D.C .

Like other designs, Olli has been developed through the Co-Creation site after the initial design. You can, in fact, see the conversations and ideas that the community has posted there. The site even has ongoing development: Currently, they are looking for solutions in universal interface improvement and a superior suspension development.

Practical takeaways

Local Motors has positioned itself as an open innovation company in an industry that’s traditionally everything but open.

The company actually challenges collaborators to make a difference and be a part of the change. This makes them stand out from their competitors. The fact that this openness is clearly a fundamental part of Local Motors, makes people see that open innovation is not just a marketing trick, but at the very core of the way they work.

This positioning and “strength of openness” is a great foundation for standing out and building collaboration. As a result, Local Motors benefits from an active and motivated community.

The community is a great advocate for the company. So, in order to create an engaged community, you need to make sure that you’re committed enough for people to really believe in your initiatives.

4. United Genomes Project - Openness Accelerating Science

Most of the medical R&D is still done in the traditional, costly and slow way. The United Genomes Project (UGP) was established to solve this problem. The project uses open innovation to create breakthrough medical innovations in Africa through their open source genetic database.

Gaining knowledge of different genomes is important, because depending on your DNA , different medicines actually work differently in your body. While traditional ways of medical R&D don’t support personalized medicines, the UGP does.  The UGP makes it possible for African medical professionals and aspiring practitioners to use this open data to create new innovations.

The idea for the UGP spur from the fact that the founder, Geoffrey Siwo himself, made a breakthrough medical finding with the help of internet databases while he was an undergraduate in Kenya.

The discovery wouldn’t have been possible without the online resources and information, as he didn’t have the means to gain that knowledge through expensive research methods. Some scientists have resources to gather costly genetic data but others don’t. However, the need for new medicine has no boundaries.

The UGP enables cost-efficient open innovation to take place anywhere, and this can kick off new breakthrough medical innovations .  It’s also noteworthy that as diversity (geographic and otherwise) is good for successful innovation , open innovation makes it possible for literally anyone with adequate skills to participate, as Siwo’s personal experience teaches us .

What does this teach us?

Most importantly, the fact that open innovation could speed up R&D and innovation drastically.

Also, this kind of initiative to work for a good cause has many benefits for the company. One is, of course, the good PR that these kind of initiatives most likely generate. However, being part of making a difference is a great motivator for your employees in itself.

5. Lego - Creating new products from community ideas

Lego is another example of how engaging your users creates more value. Lego activates its users through its Create and Share site as well as the Lego Ideas site . The Create and Share site lets Lego community members share their designs and Lego pictures, while the Ideas site actually aims for new product releases.  

As an example, the mini-Big Bang Theory Lego set is a community-based product that originated in the Lego Ideas. When the amount of supporters reaches 10k, Lego evaluates the design and the design can hit the stores under the Lego Ideas product label. The idea for mini-Big Bang Theory was submitted over 2 years ago and it took the project over 10 months to get from the Ideas site to production.

When the product ideas are approved for production, the original community members that ideated the product also get monetary compensation. The mini-Big Bang Theory is just one example. More recent products that are yet to be released in the Lego Ideas series are, for example the Adventure Time themed set and the Beatles - Yellow Submarine set .

The community provides Lego with thousands of new ideas annually, which means that Lego has a steady flow of free ideas that people are already waiting to buy. This open innovation approach in their product design phase is said to be one of the core factors for Lego’s successful brand . It has definitely been one of the things that saved their brand and made them stay at the top of the market.

If you make products directly to consumers, aim to activate your users into helping you create products that fit their desires.

When the users interact with one another and tell you what they would want to see on the store shelves, you probably have ready demand, and can save a lot of resources on market research and reduce the inherent risk in R&D.

Getting their voices heard can build a base of committed users. Just make sure you have the capability to implement at least some of the most popular ideas and communicate that well so that your customers can feel like they really made an impact.  

Could user activation and participation bring you value, or are you on a market that requires you to take a different approach?

It’s noteworthy that the same model of user activation might not work as well in other kinds of environments, such as in some B2B contexts with a smaller customer base.

6. Mozilla - Motivating the community

One thing that rarely gets connected with open innovation is open source development.

When you think about it, open source software development is very much open innovation: in open source software development, the source code of a product is open and pretty much anyone with decent skills can be a part of the software development.

Mozilla is a great example of this type of open source software development. Their product is the Firefox web browser, developed by Mozilla’s worldwide community of coders and other professionals. Mozilla has been at the forefront in advancing this kind of product development, and the development activities are carried out by Mozilla’s community where there are both volunteers and paid employees. 

People are motivated to volunteer at Mozilla because it is a great learning experience, they get to be a part of a community and are able to take part in Mozilla events.

If you want to participate in the Mozilla product development, it has been made easy. For the first step, you can start off with little things like reporting bugs to get involved. More information about the different ways for participating can be found through Mozilla’s website . Apart from volunteering, you can also apply for their internships and job openings. So from this perspective, Mozilla operates somewhere between a non-profit association and a company.

What we can learn from Mozilla is definitely the importance of fostering a community. As there are plenty of examples on the benefits of open innovation communities, it’s also worth it to learn from open source communities.

Could you benefit from opening up parts of your R&D to create this kind of a community?

Talented people join Mozilla’s communities to learn, get experience, meet people, contribute to the product and maybe even to be hired at some point. They seem to have their offerings for community members in order.

So, think about how you could motivate and foster your community . What could you offer to get people to be excited and participate?

7. Facebook - Using Hackathons to generate fresh ideas

There is an interesting internal open innovation example within Facebook. At Facebook, they organize hackathons for their employees. The idea of these hackathons is that the employees generate new ideas and innovations and make initial versions of them.  

These hackathons are not only for developers, but for anyone within the company. The point is that you work with something that you don’t work with on a daily basis. It’s argued that doing things outside your day-to-day work and enjoying making a difference within the company are what generates outside-the-box creative thinking. Of course, you can’t undermine the effect of diversity in these hackathons either.

Developers and architects might have certain ways of thinking, so it makes things interesting when you get ideas, for example, from people who work in the finance or marketing department.

When your employees meet each other across all the departments and other barriers that they normally have, they actually transmit tacit knowledge, the sense of team spirit across the company and build meaningful relationships within your organization.

All this happens while the employees are creating and innovating something new for your company. When this kind of collaboration is typical for your organization, you also create a product-innovation centered culture for your workplace.

The Pride Flag Feature

These hackathons are quite productive for Facebook. There are plenty of feature examples that can be traced back to these hackathons. For example, the like-button, live chat, and the Facebook timeline are ideas that have sprouted from Facebook hackathons.

The pride flag feature , that allowed you to modify your profile picture to support the LGBTQ community in 2015 was created at a Facebook hackathon. The idea was coined by two Facebook interns. Through the hackathon, it fastly spread throughout the company and ended up being released for public use. This example shows that your job title doesn’t necessarily matter when having a great idea.

Include the whole of your employee body.

If your employees are knowledge workers and you pay them for their creative thinking, it makes sense that you include all of them in the process of innovating new products and features. Anyone can have a groundbreaking idea and it pays off to listen to them.  

Opening up innovation internally has both short term and long term benefits.  In the short term, you can get new ideas to develop your business, and in the long run open internal innovation can be a great tool to motivate your employees and boost the development of both their thinking and skills.

You should be able to teach this mindset of creatively and proactively solving problems to all your employees.

And remember, not all internal open innovation occasions need to be full-on weekend long hackathons, you could also have many of the benefits from practices like shorter idea challenges.

8. GE - Connecting with young talents

The prizes for these challenges are very appealing for young professionals and students and  include:

• Scholarships
• Monetary awards
• Shances to work with GE on the project in question
• Paid internships 

The benefit of this is that GE gets connections to talented young people on top of the innovation work in open innovation challenges. GE’s innovation challenges and the possibilities they offer also affect the employer image of GE in a positive way.

For example the Unimpossible Missions: The University Edition challenge is clearly targeted for students that are creative, have a certain level of technical skills and a clear recruitment motivation. Through the challenge, GE aims to get three smart and creative students to have their internship at GE.

Open innovation can be used as a way to connect with talented young professionals and recruit new talent for the company. The innovation challenges for individuals and universities can be a good way to do this. They enable you to see the potential of young talents in a much wider angle than in a regular job interview, case interview or even take-home exercises.

9. Moodle - Benefit from a large sharing community  

Moodle is a learning platform that many universities and other educators use worldwide. The company itself originates from Australia, and is completely open source. This means that there is an open community behind Moodle and it's free for anyone to use, which is why schools, universities and other educators prefer it.

Moodle originally came about at the start of this millennium, when schools started to use more technology. Hence, there was a great blue ocean market space for this kind of a solution.

What makes Moodle tick, is the fact that its users create new value for the company at all times. There are over 70,000 registered sites that have over 10,000,000 courses on the platform with almost 90,000,000 users on the whole. That’s more than the entire population of Germany!

The distribution of Moodle is quite good, so it doesn’t need to market its product as much as emerging companies in the same field. It also has an open development roadmap, so everyone can see the future direction of the product, which gives further confidence to make the choice of starting to use the product.

Even though the timing of Moodle was on point and that played a great role in Moodle’s success, the key success factor from the open innovation perspective is that Moodle has a large sharing community that generates new users, as well as the openness of their development roadmap.

T hus, we can learn about creating value for users through expert users, such as universities. Moodle offers the platform that quality educators use worldwide to contact their students and to communicate with them. This makes it easy to spread.  

Moodle has been rated as the best learning management system is because it’s:

• Always up to date due to being open source
• Translated into almost 100 languages
• Plethora of features, which makes it very flexible

Moreover, the fact that Moodle works very openly and has an open development roadmap means that it’s trustworthy: everybody knows what’s going on and what new features the company is about to implement.

It’s worth to take a minute and think how you could gain trusting and committed users that spread the word, in turn generating new customers for you.

10. P&G - Being open about the innovation needs  

P&G’s open innovation with external partners culminates in their Connect+Develop website .

Through this platform, P&G communicates their needs to innovators that can access detailed information related to specific needs and submit their ideas to the site.  Connect+Develop has generated multiple partnerships and produced relevant products.

P&G recruits solutions for various problems all the time.

As an example, P&G’s COVERGIRL bypassed a lengthy R&D process by partnering up with OraLabs to publish a new lip balm, a market that was suddenly trending. As time is money, especially with trendy products, the collaboration with OraLabs really benefitted COVERGIRL.

On the other hand, as P&G communicates its needs openly, it creates competition for the solution providers as well, which is of course great news for P&G.

Let others know what your needs and problems are. This makes it possible for others to propose customized solutions for you, which enhances competition.

In the best scenario, you can pick the best innovator for your solution. Opening up about problems and needs can also bring great connections that you wouldn’t otherwise have found at all.

Being open about the problems that you have might be a scary idea, after all, not only possible collaborators but your competitors will be able to see what you are working on.

Despite this, there are great benefits about opening up about your needs to companies that could solve your problems. The collaborative relationships can also last for decades, ending up being helpful on more than one occasion.

P&G often refers to collaboration with long-lasting partnerships as being efficient because you already know each other's working practices inside and out.

On top of the fact that being completely open gives you the best chance to get outside-the-box solutions that you wouldn’t have thought yourself, it’s also possible to create your own trusted community that you can share your problems with.

11. Nivea - Involving users in product development

Nivea’s B&W deodorant is a strong example of activating users throughout new product development from ideation to implementation.

The intimately open collaboration with possible partnering companies happens via Beiensdorf’s pearlfinder , which might be interesting to take a look at. However, the real case that we can learn from here is Nivea’s B&W deodorant’s development.

The idea for Nivea’s B&W deodorant was coined together with Nivea’s users through social media. The way Nivea collaborated with its users throughout the R&D process is very interesting.

They basically shared what kind of product was needed, what seemed to be the reason behind these stains in the first place, and how they could be prevented. The resulting B&W deodorant then became the first deodorant on the market that prevents white and yellow stains from appearing.

Beiersdorf then partnered up with a company they found via pearlfinder and developed, together with the users, the B&W deodorant. This admittance of issues in their product could have been seen as a sign of weakness, however, users were very active in collaborating with Nivea and the end-product ended up being a great success.

Your users might have surprising problems that you could solve . User involvement and activation might be a good idea in engaging them to collaborate with you.

Even if open innovation collaboration may seem frightening to you, listening to your customers needs is common sense. So keep your eyes and ears open (also online!) for all ideas that come from your potential and existing users.

Of course, Nivea could have invented the invisible B&W deodorant by traditional means, but it would probably have cost more time and money. Nivea also gained visibility and committed customers by including them in the innovation process, which thus doubled as marketing.  

Open innovation is not just a cool way of doing things. It can have major cost benefits too.

Do you know what your users are thinking of your product?

Maybe there is a way of involving your users in the process, thus giving you helpful insight into their needs, wants and ways of bettering your product.

12. Philips - The High Technology Campus  

Philips has a wide range of open innovation activities. It has the platform , the challenges and it activates its own employees to think openly .

Philips also established its own open innovation campus at Eindhoven in 2003. The High Tech Campus is open for a variety of companies to work in. It offers them tools to help accelerate their business and research projects.

Currently, the campus works on its own, but Philips’ presence is still there and it continues to gain from the physical open innovation space.

The possibility to actually work physically together has created an innovation ecosystem in Eindhoven with over 140 companies with varying sizes working in the same small area.

Creating and being present in spaces where there is a possibility to collaborate together is great for open innovation.

Nothing builds collaborative and trusting relationships between companies and research groups like the possibility to visit one another casually on your coffee breaks to talk about what you’ve just been working on.

Even though technology gives you the possibility to open up your innovation to the masses, physical proximity is still a key factor in one-on-one close collaboration.

However, physical proximity is not always necessary. Companies can have active platform collaboration online and hold open innovation challenges worldwide.

Still, if you work closely with others and want to establish close personal connections, you could benefit from these physical spaces that enable concrete encounters.

Could proximity with collaborators be beneficial to your company?

13. Apple - Value creation through open platforms

Apple is a typical example of a company that is very closed and secretive of its R&D, so what is it doing on this list?

Despite the general closedness of Apple, they still use open innovation on their own terms when they think open innovation is suitable.

Take the apps on iOS-products as an example. Even if Apple’s product quality is top notch, it is first and foremost the quality and wide range of applications available for Apple products that makes them so valuable.

The logic behind the idea, that others can create applications on your platform is very smart.

Think about iPhone users (and all other smartphone users for that matter). They have all kinds of needs that phone makers or operating system makers don’t have a clue about. Some are interested in their health, others are into mobile gaming, some in news, books and music etc.

With all the possible apps, users can customize their user experience exactly like they want to, and all of this benefits both the platform and the users.

The key learning point here is that you can restrict the amount of openness in open innovation . What Apple does is that it regulates and controls its open innovation so that application developers can create their products to work in the Apple environment. This way they can be distributed through Apple’s channels with little to no visibility in the other aspects of Apple’s internal R&D.

However, achieving this kind of a position and control is not easy, nor is it always feasible. You have to think if having control actually gives you enough value.

Regulating the openness means that also the outcome possibilities of collaboration are restricted one way or the other. For example, the collaboration can fail to create breakthrough innovations.

Moreover, convincing others to engage in open innovation with you despite restraining the collaboration can be hard unless you clearly have a winning platform . So be careful on how you control the cooperation.

Due to Apple having a great brand and a winning platform, a high level of control is possible for them, but how about you?

14. General Assembly - Re-thinking education

General Assembly is a school, that provides online and on-campus courses, that help people gain work life relevant know-how.

Typically the course contents are related to the modern needs and technologies in today’s work life .

There are courses for example on:

• User interface design 
• Digital marketing
• Entrepreneurial skills

The offering is both for students that simply want to learn and make connections in the community, and for companies that want to provide their employees with courses.

Valuable Community

General Assembly incorporates open innovation through their community , developing their offering based on the needs of the changing work life. They are also actively seeking new partnerships. The community is used for connecting talented young professionals (current and former students) with companies looking for such.

General Assembly teaches people skills, that lead them to paying jobs and offers tools to help in building their own companies. So in a way, General Assembly is a personal accelerator for its students!  

As an example, there is General Assembly’s Web Development Immersive (WDI) course . Through this course, students learn how to develop web software professionally.

The students also complete several projects that provide them with the skills applicable for real work life situations. For example, Nathan Maas created his own service based on what he learned on the WDI course and now has a company called pennypost .

The open community of General Assembly made it possible for Maas to start his own company with people that liked his idea. Several fellow students and instructors actually joined Maas to create pennypost after the WDI course. The fact that these kind of innovative companies and individuals have their roots in the General Assembly means that they get visibility. Thus more and more companies want to hire from their alumni, in turn attracting more students.

General Assembly listens to and reacts to what its customers want to learn and teach.

The skills that they teach are very much related to the new needs of working life , skills that companies want to hire and teach their employees. Being nimble and developing its offering to match the needs of the society is what makes General Assembly more attractive to students.

The problem with traditional schools is that the curriculum tends to change slowly in them.

While the demands of businesses are changing rapidly, what you learned in school doesn’t often prepare you for real work-life situations with adequate skills.

General Assembly is a very good example of being open to the needs of its users and meeting constantly changing requirements.It's also open to new skills and instructors who have something to add to their offering.

15. Telegram - Enabling users to create content

Telegram is a messenger application that works on computers and smartphones very much like WhatsApp. What makes it different is how much users can contribute to its content openly. What makes Telegram interesting and popular is the fact that you can customize it to your liking.

Users with any developing skills can create their own stickers and bots (i.e. their own content) on the platform.  While Telegram can be used like a regular messenger, it’s also possible for users to customize their user experience by themselves.  

Even though instant messaging is a very competitive market, Telegram has gained a lot of users because of its ease, openness and the fact that you can create your own content. The Telegram company sometimes even grant prizes for new content.

Custom stickers makes it possible for you and your friends to make stickers of the funniest moments you’ve shared. Telegram also promotes the best stickers updating an in-app list of the trending ones.

The main giveaway of this case is that openness can:

• Allow users to create versatile new features for themselves
• Customize their user experience

When users can create almost any kind of feature they want, you can benefit from the best innovations .

Telegram can even bring the most popular features forward to all users.

So it might be a good idea to let your users create what they want to on your platform as it  might just be enough to differentiate your product from all the others!

Also, having the users configure a product to exactly match their needs creates a positive lock-in effect. Why would you want to change the product to a substitute, when others can’t be made to match your preferences?

16. Lilly - Gathering information  

Lilly is a pharmaceutical company, that has applied open innovation via its Open Innovation Drug Discovery program (OIDD) . In OIDD scientists (at universities as well as companies) can safely share biological data that aims for new drug discovery . Lilly then offers modern tools and help in screening and researching the data. So basically OIDD is a platform that enables companies to find new drug compounds faster.

OIDD is also a platform for generating R&D partnerships with Lilly. With the OIDD Lilly has generated a wide, Open Innovation 2.0 like open innovation network. In the network, all parties can benefit from the new value created within the network, in this case, from the new drug discoveries. Hence, new discoveries lead to new medicines faster.

This open way of working enables Lilly and other scientists to find new possible drugs and cures for severe diseases faster than before. Researchers apart from Lilly get the tools to test their compounds, while Lilly gets a great database of compounds. On the other hand, Lilly obtains connections that it can use when possible drug solutions are found.

The Lilly example demonstrates an open innovation network, and how that positively affects Lilly’s own R&D. The OIDD platform speeds up new drug discoveries, and when new drug compounds are found, Lilly can collaborate with the finding company.

In the end, Lilly might be able to manufacture the end product and be the one to sell it. This kind of open innovation network can be issued in many ways, like via this case’s open innovation platform. You might not even need to create the network yourself as there are many existing open innovation networks that you might be able to join.

If you are still apprehensive about open innovation because of problems with potential intellectual property rights, you might want to reconsider. You can start simple, with a pilot.

To help you out, we created in Viima an open innovation board template which allows you to manage your open innovation  initiatives in a user-friendly, intuitive and efficient manner. You can sign up for free and start collecting and developing the most promising ideas right away !

This post is a part of our Open Innovation blog-series. In this series, we dive deep into the different areas of open innovation and cover the aspects we think are the most important to understand about open innovation.

You can read the rest of the articles in our series covering open innovation by clicking on the button below. Don’t forget to subscribe to our blog to receive updates for more of our upcoming content!

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MassChallenge

Innovation Blog

Open innovation: what it is and models to inspire your business.

• Published on: December 1, 2021
• Author: masschallenge

The COVID-19 pandemic has brought open innovation to the foreground, with experts from different industries putting their heads together for the greater good.

For instance, Ford, United Auto Workers, 3M, and GE Healthcare have combined forces to build ventilators using F-150 seat fans, 3D printed parts, and portable battery packs.

While it may sound like the latest buzzword, open innovation has been around for almost 20 years. But now, as digital transformation and the startup age kick into high gear, C-suite members are finally taking note of the theory first coined by a University professor.

Read on as we find out what open innovation is, and why it matters more now. We’ll explore key benefits, types, and examples of the concept in action, and will study several open innovation models you can experiment with to drive progress and transformation in your business.

What is Open Innovation?

Open innovation is the practice of a company opening its R&D department to input from people outside the company, or, to employees from other departments within the organization. By breaking down traditional silos between departments, and welcoming external experts and researchers, companies remove the limitations that a classic, secretive model may place on innovative efforts.

The concept of open innovation was created in 2003, by Henry Chesbrough , a research professor at the University of Berkeley. Today, useful knowledge is widely distributed, and there is no company, no matter how big, that can maximize the potential of innovation entirely on its own. Chesborough explains that this model offers companies a decentralized approach to innovation that empowers growth.

Open vs Closed Innovation

Before we dive into open innovation, let’s first see how it compares to the opposite approach of closed innovation.

Closed innovation is the traditional model of ideation, research, and development that relies entirely on internal resources and expertise to generate, manage and sustain new business ideas. All information is contained within the company, often within the R&D department, with no sharing with external parties.

Open innovation , by comparison, refutes the classic approach by welcoming creative talent, research professionals, and subject matter experts from outside the company. The open innovation strategy is rooted in the belief that increased information sharing and collaboration will invariably deliver better results.

Types of Open Innovation

Companies can use open innovation in myriad forms, putting the philosophy to practical use in a way that best suits its business objectives. As we consider the different types of open innovation , we can develop a clear understanding of how best to use it.

We can classify open innovation according to four levels of inclusion:

• Intracompany – Open innovation efforts inside the organization. While this type may sound contrary to the overarching philosophy of open innovation, intracompany innovation brings together resources from multiple departments.
• Intercompany – Open innovation between two (or more) companies. The perfect example of this type is a corporate accelerator.
• For experts – Open innovation that brings in people from outside the organization who possess the required experience and knowledge to provide relevant input.
• Publicly open – Open innovation that invites all people from outside the organization regardless of their previous knowledge or reputation.

After we determine the level of inclusion, we can define the purpose of use as one of the following:

• Marketing to promote brand messaging and convey key information to the target audience.
• Gathering insight to identify and evaluate valuable information about current market trends and customer preferences.
• Finding talent to enhance the overall skill set and productivity of the company’s workforce.
• R&D to develop new products or services.

When we cross-reference the level of inclusion with the use case, we have 16 types of open innovation.

For example, let’s say your business wanted to fill new positions quickly. With an intracompany approach to finding talent, you can identify people within your ranks who possess valuable skill sets.

If you want to develop products that reach the broadest possible audience, you can use a publicly open model to get insight from experts and potential customers during development.

The level of inclusion you wish to work with, and the primary goal are vital aspects that will determine which type of open innovation your business should choose. With these parameters in mind to guide your open innovation strategy, you can reap great rewards.

Benefits of Open Innovation

So, why should your business consider this method of innovation? Here are five benefits of open innovation for corporations that wish to use outside talent for R&D:

Access latest industry talent

Despite a push to train more developers and IT professionals in emerging fields like fintech , cybersecurity, healthtech , blockchain, and mixed reality technologies, there simply isn’t enough talent available to satisfy the market demand. If your business puts its stock in closed innovation, it limits the chances of innovating even more.

Open innovation enables companies to collaborate with as many bright minds as possible so that you can keep your company at the bleeding edge.

Access essential infrastructure and technology

While some startups can bootstrap their way to the big time, many are crushed by a lack of resources. Without the capital or technology to properly develop a concept, it often proves impossible to get an idea off the ground.

Open innovation presents new partnership opportunities, enabling startups to build relationships with university research facilities or larger enterprises that have the resources to bring products to market.

Develop additional revenue streams

Sometimes, certain projects don’t fit with the core business model. Rather than letting them go completely, a company can use open innovation to develop unrelated ideas externally. In doing this, they can establish new revenue streams and start new partner businesses that are separate from the primary business model.

Leverage co-creation

User-generated content is a powerful channel where companies leverage the feedback and ideas of their customer base to build brand awareness and social proof. But co-creation doesn’t need to stop at marketing—you can use it to innovate, too.

By involving customers in early stages of product development, you connect with the community you are trying to serve and implement their ideas in a way that helps ensure the final products and services are aligned with what matters most to your customers.

Reduce costs and development timescales

Larger enterprises can get stuck in their ways, held back by red tape and stringent processes. Meanwhile, smaller startups may have talent but often struggle because of a lack of resources and financial muscle.

By coming together, a partnership reduces costs for small startups and accelerates product life cycles for bigger companies. The union also spreads the risk for both companies.

Electrolux’s Head of Open Innovation, Lucia Chierchia , reiterates that such partnerships are not a one-way street, as the bigger company providing the financial and infrastructure support also gains a lot.

“There is big value when it comes to innovations from outside our company, and we needed to find a way to capture this value and build something new together with smart, external people.”

Examples of Open Innovation

Rapid developments in technology have encouraged more companies to experiment with new methods in the last decade.

Here are some open innovation examples from some of the most well-known companies in the world:

Facebook (Intracompany)

The dominant force in social media nurtures innovation on the inside with company hackathons , which help Facebook surface some of its best ideas from within its own ranks. These events give employees the opportunity to discuss and develop initial versions of product ideas they might have before product teams take on the

By opening the floor to everyone—not just developers—Facebook offers all employees the chance to think creatively, and it can even prove to be a springboard for some budding entrepreneurs to launch new ideas or segway into new career paths.

Philips (Intercompany)

Dutch technology corporation, Philips, is an early adopter of open innovation, as the company made a shift in that direction back in 1998 when it opened the R & D ecosystem now known as the High Tech Campus Eindhoven .

The campus is home to over 200 companies, with entrepreneurs, researchers, and product developers from all over the world coming together to create new ventures .

Many of the projects created on campus focus on solving real-world problems, such as the challenges posed by overpopulation, climate change, and failing healthcare systems.

Samsung (Intercompany)

Another intercompany example is the Samsung Accelerator program , which brings together entrepreneurs, designers, innovators, and experts, and offers them office spaces, capital, and product support to yield exciting new solutions.

The initiative provides a platform for four potential avenues of open innovation:

• Commercial partnerships between Samsung and other companies.
• Venture capital funding to offer R&D investments to new startups and external businesses.
• Mergers and acquisitions where Samsung can acquire new talent and integrate small teams into the corporation to build new products for Samsung.
• Corporate accelerators , like those that already run in Palo Alto, San Francisco, and New York.

UNDP (For Experts)

The United Nations Development Programme (UNDP) promotes investment and collaboration for social good on an international scale. As mentioned earlier, the global pandemic has been a catalyst for innovation, with experts from all fields working overtime to figure out solutions that can help the world in the new normal.

As Rwanda struggled to cope with rising cases, the UNDP Accelerator Lab brought health professionals together with the Ministry of ICT and Innovation to design and deploy anti-epidemic robots.

These advanced robots help screen people and detect COVID-19 cases at Kigali International airport, and provide additional services in the local hospitals and treatment centers, including food and medication delivery.

Coca-Cola (Publicly Open)

When it comes to innovation, Coca-Cola is no stranger. The soft drinks company famously launched “ New Coke ” in the mid-80s. The rebranded product and new taste formula was a disaster. Sales plummeted, and the company was inundated with complaint calls. Eventually, the product was discontinued in the face of public backlash.

Today, “New Coke” is recognized as one of the worst marketing mistakes in history, offering companies a cautionary tale on why they shouldn’t mess with a working formula.

Nowadays, the company involves customers by allowing them to suggest and mix their own flavors in a freestyle dispenser machine . With the mobile app, customers can record their favorite new tastes, and get it from other machines in different locations.

Coca-Cola learned its lesson, but it didn’t put the company off innovation completely. By putting customers at the heart of product development, Coca-Cola gets valuable insight from public opinion, before they dare to launch any new products.

Different Open Innovation Models

Now that you understand the key benefits of open innovation let’s look at some of the most effective models. Here are three ways you can apply open innovation at your business:

Open innovation challenge

An open innovation challenge is an event where entrepreneurs, researchers, and specialist teams compete against each other to try and solve a defined problem in the industry. One example is Unilever’s innovation portal , which seeks solutions to problems companies face with packaging, transportation, and storage of food products.

Innovation challenges help companies gather ideas and find solutions. Usually, the problems are well-defined, like the Unilever program. However, it can sometimes require a broader approach to encourage thinking around a more diverse range of ideas. For example, the AT&T Accelerator Challenge strives to find new ways of enhancing the engineering capabilities of students.

Open innovation partnerships

Crowdsourcing takes a similar approach to an open innovation challenge, where a corporation partners with an accelerator to source innovation. The company comes up with an initial problem, question, or theme, and encourages people from outside to put forward ideas or potential solutions.

This model reduces R&D costs, and cuts down on production time, as your company can maintain open communication channels with your audience, getting input at every stage of production. As this process fosters connections between internal stakeholders and external innovators, crowdsourcing is an excellent method of building partnerships that offer mutual value.

Open innovation labs

An open innovation lab is a dedicated workspace that operates outside the normal routines and practices of the business.

Quite often, the teams that work in these labs comprise new hires and external experts, who will collaborate to provide solutions to targeted problems or else come up with ways to improve the existing products, services, or systems at the company.

Liberty Mutual opened an innovation hub called Solaris Labs, located in a Boston branch of WeWork . The lab has the goal of building and testing new products based on emerging trends and customer research.

The team in the lab operate like a startup in several ways, as they:

• Partner with universities for relevant research
• Sponsor corporate accelerators that incubate startups
• Engage with startups in the Boston area

By setting up the lab in a WeWork, the company breaks away from the corporate mold and gets access to the fast-paced energy of the startup space. In doing so, it enables the team to think and work differently.

How to Become an Open Innovation Company with MassChallenge

When success has come easy at an established enterprise for many years—or even decades—shifting the proven paradigm can seem folly. The prospect of transforming well-ingrained practices and processes in a massive company not only seems risky, but it is also a daunting project.

And yet, ignoring the changing tides in your industry is a mistake no company can afford. Even if your business is secure now, there is no guarantee traditional methods of innovation will keep you at the top.

Becoming an open innovation company allows you to spread risks, reduce costs, and tap into the raw power of new talent and technology. Instead of limiting your company’s progress with a traditional, in-house focus, you open the door to valuable partnerships, ideas, and expertise in your industry.

Ultimately, this approach can drive transformation and sustainable growth for your company. What an accelerator, like MassChallenge provides, is the hub for bold problem solving, innovation, and acceptional entrepreneurs who all team with a variety of essential stake holders. Becoming involved with accelerators facilitates access, supports emerging talents and technology, and bolsters any organizations goals by maximizing open innovation.

Learn more about  MassChallenge and what it means to be a partner or an expert for  the global network for innovators who are working to solve massive challenges.

About the Author

Robbie Richards is an expert contributor to the MassChallenge blog for over two years. He writes on innovation approach, entrepreneur resources, and business and marketing research. He has been published in Forbes, Ahrefs, WordStream, and more.

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Open Innovation and Business Model: Embrapa Forestry Case Study

RAM. Revista de Administração Mackenzie

Purpose: To understand how Embrapa Forestry Unit structure its business model to manage better the issues inherent to open innovation, oriented to the management of technology, science delimiting the elements of business models, and inbound and outbound open innovation and their aspects related to impact model. Originality/value: Embrapa Forestry is a research unit focused on technological research in the commercial and non-commercial forestry sector. The central objective of this work was to evaluate how a public company manages its business model in the practical exercise of open innovation. Design/methodology/approach: In order to understand the company’s business model, we adopted the perspective of triangulated single case study between semi-structured interviews and secondary data review based on reports and memos. This is all due to the technological relevance that used open innovation to design a model that today we understand as business models and impact business model, wi...

Related Papers

Sustainability

Rosa Rio-Belver

The change in business management towards a vision based on open innovation has opened the doors to knowledge transfer between organizations, promoting scientific–technological collaborations resulting in new research that opens the way to new technological innovations. Therefore, the objective of this study is to see how the company Iberdrola has oriented its management strategy towards an open innovation approach, analyzing both its scientific and technological development through a bibliometric and network analysis. The results highlight that Iberdrola has always considered scientific and technological development to be part of its strategic approach as a means of disseminating and transferring knowledge. Furthermore, it can be concluded that the implementation of strategic axes related to sustainable development in an open innovation environment has improved the results of its scientific and technical production, and also the company’s financial results.

Forest Policy and Economics

Dragan Nonic

Dr. Juan Mejía-Trejo

Abstract Introduction: Since, Henry Chesbrough (2003) coined the term ―open innovation‖ (OIN), several implications were revealed, being one of them: ―the open business models‖ (OBM). This new implication, requires to the firms the recognition that all of the external resources and capabilities, are not more constrains for the internal innovation, but a complement. Even more, due the rapid changes in trends and consumer habits, for example in the information technologies sector of metropolitan zone of Guadalajara (ITSMZG), the open innovation can enable or require innovation in the targeted customers, the value proposition, the value chain, the value network position, and the economic model. Several authors, have made conceptual business models considered, most of them for ―closed innovation” so our research question is: Which is the conceptual open business model (OBM), considered as a key factor of open innovation (OIN)? Method: This is a documentary study to select the main variables among specialist in ITSMZG practicing the OIN process using analytic hierarchy process (AHP); after this, we designed a final questionnaire in Likert scale, applied during Jan. 2015-May 2016 to the total population asked: 600 specialist of ITSMZG. It‘s used a first-order confirmatory factor ana-lytic (CFA) model, with structural equation modelling (EQS) software to analyse the OIN underlying variables, to determine a final conceptual OBM. Results: The result is a conceptual OBM based on 5 main factors: strategy (STR, (3 varia-bles/14 indicators), technology (TEC, 3 variables/24 indicators), business management BMG (10 variables/76 indicators), new entrepeneurships (NWE , 3 variables /7indicators) and open innovation orientation (OIO ,3 variables/18 indicators), empirically proved for the ITSMZG. Conclusion Although the final conceptual OBM has a significant positive effect among its variables, also showed different levels of factor loadings, meaning opportunities to improve the model as a key factor for OIN at the ITSMZG. Resumen Introducción: Desde que, Henry Chesbrough (2003) acuñó el término "innovación abierta" (OIN), varias implicaciones se han revelado, siendo uno de ellos: "los modelos de negocios abiertos" (OBM). Esta nueva implicación, exige a las empresas el reconocimiento de que todos los recursos y capacidades externas, no son más una restricción para la innovación in-terna, sino un complemento. Aún más, debido a los rápidos cambios en las tendencias y hábi-tos de los consumidores, por ejemplo en el sector de tecnologías de la información de la zona metropolitana de Guadalajara (ITSMZG), la innovación abierta puede incluso requerir que la innovación provenga de los clientes objetivo, la propuesta de valor, la cadena de valor, la po-sición de la red de valor, y el modelo económico. Varios autores, han hecho modelos de ne-gocio conceptuales considerados, la mayoría de ellos para "innovación cerrada" por lo que nuestra pregunta de investigación, es: ¿Cuál es el modelo de negocio abierto conceptual (OBM), considerado como un factor clave de la innovación abierta (OIN)? Método Se trata de un estudio documental para seleccionar las principales variables entre especialistas de la ITSMZG que practican el proceso de OIN, usando el proceso de análisis jerárquico (AHP); después de esto, se diseñó un cuestionario final en escala de Likert, apli-cado de Ene 2015 a May 2016 a la población de 600 especialistas de la ITSMZG. Se utilizó un modelo de primer orden de análisis factorial confirmatorio (CFA), con software de mode-lado de ecuaciones estructurales (EQS) para analizar las variables subyacentes OIN,y deter-minar finalmente un OBM conceptual. Resultados: El resultado es un modelo conceptual de OBM, que consiste en 5 pricipales factores: estrategia (STR, 3 variables/14 indicators), tecnología (TEC, 3 variables/24 indica-tors) administración del negocio (BMG, 10 variables/76 indicators), nuevos emprendimientos (NWE, 3 variables /7indicators) and orientación de la innovació abierta (OIO, 3 variables/18 indicators) Discusión o Conclusión: El modelo final OBM conceptual tiene un efecto positivo entre sus variables, con cargas que mejoran al modelo para ser factor clave en la OIN de la ITSMZG.

Journal of Open Innovation: Technology, Market, and Complexity

Adam R . Szromek

The paper aims to analyze the environmental aspects of innovation activity undertaken by companies and, in particular, to assess sustainable business leaders’ propensity to generate eco-innovation. The research described in the paper was descriptive and, to some extent, diagnostic. It was based on a non-random sample and was conducted—using the Computer Assisted Telephone Interview (CATI) method—in 2019 among 54 of the most eco-innovative Polish companies. The results of the research indicate that they are more likely to generate radical rather than incremental changes. Moreover, the most eco-innovative companies are those developing technologies for biodiversity protection. The results further indicate that companies with more than 50 employees have a higher propensity to develop incremental and radical eco-innovation than smaller firms with relatively fewer resources. Finally, this study shows that adopting an open innovation strategy strengthens the propensity to generate eco-inn...

Adam Ryszko

In recent years increasing attention has been paid to theory building and empirical research that explore the links between the business model and open innovation (BM&OI). Nevertheless, studies presenting the results of bibliometric analyses merging these two terms are still scarce. Therefore, the main aim of this paper was to present the results of a comprehensive bibliometric analysis focused on the determination and mapping of the evolving cognitive and social structures in the BM&OI literature to set proposals for directions of future research. Our research was based on the dataset obtained from the Scopus database and made use of the Biblioshiny and the VOSviewer software. Descriptive and network analyses were conducted to demonstrate an overview of the scientific field under consideration. We identified the leading authors, sources, countries and institutions in the BM&OI literature. The most influential publications on the BM&OI and the most cited references by documents cove...

Ardiwansyah N

Wim Vanhaverbeke

Shaun Gamboa

Valerie Chanal

New Frontiers in Open Innovation

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