Open Innovation
description
Transcript of Open Innovation
OPEN INNOVATION AND DYNAMIC CAPABILITIES FOR
INDUSTRY & GROWTH
Alar Kolk
www.alarkolk.com
Building New Innovation Capability to Identify Future Opportunities
- Identify New Growth Opportunities
- Define & Implement New Innovation Strategies
- Generate & Deliver Better Ideas
- Renew Organizatonal Capabilities
four levels of innovation
business model innovation
product & service innovation
process innovation
technology innovation
Revenue Growth, Life Cycle & Innovation Dynamics
Business model innovation has captured the attention of executives tasked with achieving growth in the face of increasing competitive pressure. Business model innovation suggests
that if you took an existing product and repackaged how you sold it, you can hold off competitive pressures and even capture entirely new market segments.
idea!
but there is no common language
Our current market
Our new market
Other firm´s market
Open innovation
External technology insourcing
Internal technology base
External technology base Henry Chesbrough, 2004
Internal/external venture handling
Licence, spin out, divest
interdisciplinary approach
Open Innovation means that valuable ideas can come from inside or outside the company (industry) and can go to market from inside or outside the company (industry) as well1.
This approach places external ideas and external path to market on the same level of importance as that reserved for internal ideas and paths to market during the Closed Innovation era2.
CLOSED & OPEN BUSINESS MODEL
OPEN INNOVATION!
1,2 H.Chesbrough, 2003
Dynamic capabilities as the firm's ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments1.
Some dynamic capabilities integrate resources (product development; strategic decision making), others focus on reconfiguration of recourses (knowledge brokering) within firm and other dynamic capabilities are related to the gain and release of recourses (knowledge creation routines; alliance, acquisition and exit routines)2.
EXPLORATION & TRANSFORMATION
DYNAMIC CAPABILITIES
Roald Amundsen, Robert Scott, Umberto Nobile
1Teece et al 1997 2Eisenhardt and Martin 2000
Developing Portfolio of Capabilities
Operational Capabilities
Technological Capabilities
TransformingSeizingSensing
Open Capabilities
Dynamic Capabilities
Learning
Innovation
think outside-of-the box
At any given point in time, firms must follow a certain trajectory or path of competence development. This path
not only defines what choices are open to the firm today, but it also puts bounds around what its internal
repertoire is likely to be in the future1.
Collaborative know-how is a particular type of knowledge that determines
whether companies can develop specialized knowledge via expertise
and then use it to obtain further benefits2.
STEP OUT OF THE BOX!!!
PATH DEPENDENCY
We had become stuck in our past and weren’t stretching far enough to innovate new ideas, to “step out of the box.”
David O. Swain, ex. CTO, Boeing
1Teece et al, 1997 2Simonin 1997
we re-invent the wheel
... improve it
Learning & Diversity
Boeing VP Dick Paul & CTO David O. Swain went to P&G and asked how they were getting ideas and how they were thinking about R&D. After the visit they remarked, “P&G
had some great thoughts, which affected what we did; we went home and did a couple of things differently and that was an example of us beginning to open our eyes to the world
and trying to integrate that into our planning process
user-centered
Platform leaders (companies that drive industry wide innovation for an evolving system of separately developed pieces of technology) are
navigating challenges from wannabes (companies that want to be platform leaders) and complementors (companies that make ancillary
products that expand the platform’s market. Platform leadership is the ability of a company to drive innovation around a particular platform
technology at the broad industry level.
Cusumano and Gawer (2002)
GROWTH & OPEN
BUSINESS MODELThe business model provides a coherent framework that takes
technological characteristics and potentials as inputs, and
converts them through customers and markets into
economic outputs1.
A business model has two functions: 1.Value creation
2.Value capture
1Chesbrough, Roosenbloom 2002
20 senti
2 krooni
20 krooni
30 – 70 krooni
... execute-> project portfolio
the big picture (business model)
how do you earn your money with this business model?
Traditional (product) value chain versus
Modern (business model) value chain
The business model mediates between technical and economic domains
Over the years, entrepreneurs have been mostly known for technical innovations. And there are many great companies that have been built on top of technical innovations like
Intel, Cisco, Oracle, Apple, and arguably Microsoft. If you think of Federal Express, Google, Netflix, these companies were built on business model innovations.
Business Model:
• market segment
• value proposition
• value chain
• c/profit mechanism
• value network
• competitive strategy
Business Model:
• market segment
• value proposition
• value chain
• c/profit mechanism
• value network
• competitive strategy
Economic Outputs:
e.g., value, price, profit
Technical Inputs:
e.g., feasibility,
performance
Measured in technical domain Measured in economic domain
Portfolio of Capabilities & Business Model
Open Capabilities
Dynamic Capabilities
Operational Capabilities
Technology Capabilities
Portfolio
how do you change a business model and innovate?
how do you measure the success of a business model?
strategic fit
… evaluate, learn and redesign-> manage improvement
... select the right teams and people-> make responsible
... outline key indicators to follow-> choose measures
OPEN INNOVATION AND DYNAMIC CAPABILITIES FOR
INDUSTRY & GROWTH
Alar Kolk
www.alarkolk.com
[email protected]@yahoo.com