Open innovation encourages the creation of constructive partnerships to share knowledge between partner organizations. This collaborative approach cannot be implemented constructively without a thorough understanding of the fundamental elements that make up a successful OI strategy. We take a look at the building blocks of open innovation as outlined in this study from the Big Innovation Center.

Leadership

Open innovation strategies require financial foresight, a shift in company-wide strategy, and internal cultural change. Based on the extreme nature of these internal changes, employees may respond to IO frameworks with some degree of initial resistance. Open innovation can only be successfully incorporated as a top-down incentive that can overcome potential employee skepticism. It is the responsibility of an organization’s management team to not only facilitate employees’ understanding of IO tactics, but also to personally ensure the development of mutually beneficial collaborative partnerships. instilling these interactions with trust, credibility, and reliability.

Strategy

Many innovation-focused organizations have already recognized the importance of external collaboration. However, some companies are still struggling to incorporate the OI strategy into their structural framework. OI cannot be used effectively if the organization does not inherently prioritize innovation within its corporate operations. The only method that ensures holistic integration is to incorporate OI directly into the framework of an organization’s existing strategy.

organization

Innovation-focused companies must tailor their OI strategies to business goals and operational capabilities. A central team should be responsible for open innovation training, legal and IP policies, and best practices across the company to ensure the best results. This is a fundamental requirement for organizations that intend to successfully integrate this collaborative practice into corporate strategy.

Culture

Certain employees may be more inherently inclined toward efficient adoption of IO strategies. Employees who rely on social media will find it easier to understand and use the basics of open innovation, including sharing knowledge for mutual benefit. Management teams should be aware that socially open employees may be reluctant to allow their interactions to be governed by corporate regulation to prevent the disclosure and circulation of specific internal concepts to external partners.

Certain organizations have corporate strategies that are strongly tied to security operations, credibility, and risk aversion. This reputation is maintained to the benefit of internal workers as well as clients who rely on these attributes to make sound investment decisions. Such organizations must weigh the potential benefits of IO against the perceived damage to their reputation through external information exchanges.

Tools/Process

Forward-looking organizations can use open innovation tools to ensure responsible adoption of external partnership strategies. First, companies must identify the resource requirements for a specific IO model. The organization must distinguish between resources that can be developed internally and resources that must be obtained from trusted sources outside the organization. This step allows progressive companies to design a framework for mutually beneficial information exchanges that avoids allocating vital resources to acquiring external knowledge that is not essential to the organization’s needs.

Next, companies must establish criteria by which potentially beneficial associations can be located and evaluated. This step avoids allocating resources towards establishing insufficient or extraneous associations. An IO-focused company must map out and initiate processes that can be used to gain strategic partnerships that serve the goals of the organization. The final element is the identification of tools and resources that will enable the successful management of long-term collaborative partnerships to ensure continual renewal of benefits and insights on both sides.

Metrics

Organizations must identify the appropriate metrics to judge the success of their IO strategies. A successful open innovation metrics framework will enable the organization to identify return on investment so that strategies and partnerships can be appropriately managed or modified. Metrics for judging ROI can include revenue contribution from new products, time-to-market savings, increase in customer base, and partner network size and connectivity. Open innovation strategies and metrics need to be circulated and understood internally to ensure implementation and long-term success. Similarly, metrics should be shared with OI partners to ensure trust, credibility, and reliability are maintained.

Before an organization embarks on an IO journey, it must clearly understand these building blocks and assess its readiness. If leadership is enthusiastically committed to embedding an IO strategy, they will find ways to influence the rest of the organization to adopt it as well.