Monday, 1 December 2008

Open Innovation

It used to be that companies always kept their R&D secret.  It used to be that research was largely an internal function of a company.  And it used to be that it was only the research department that was charged with responsibility for innovation within a company.  Invention is only innovation when it means something for the customer.  Research and generating inventions expressed through intellectual property is relatively easy.  Turning that invention into innovation is much more challenging.  

Nowadays some companies are breaking these rules from the past.  And its not just the innovative companies that might first spring to mind ... such as Apple.  Even former monopoly telecommunications company BT has changed enormously.  It is now recognised as an innovation leader.  It has transformed from that old monopoly into this innovation leader by taking an open approach to innovation.  It runs scouting teams globally to find the best technology out there.  It has formed strategic partnerships both with academia including the best universities in both the UK and US, and also with suppliers and customers.  The latter is quite novel, through a specific programme of engagement with key large customers to apply research to their problems.  It has the largest foresight team in the UK and its ideas scheme within the company is a leading example of how to harness the innovation of people throughout the organisation.  And it works with New Venture Partners to identify potential spin outs and start-ups for technology it develops in-house.  This sharing of early innovation is perhaps a slightly counter-intuitive way to turn an internal research project into a solution, but has many advantages, including widening early adoption.  

In the future, it is clear that the old models won't be so successful any more.  Supply chains will be more fluid and much more collaboration will be evident all along it.  Rather than just selling to customers, joint development between organisations will shorten timescales and sharpen focus on the solutions to real problems.  In future we won't just be talking about mesh networks of computers, but mesh networks of organisations too.

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