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Table 7.4
Characteristics of open innovation
Characteristics
Results
Firm capitalizes on its strengths by
utilizing external developers with
complementary assets and resources.
•
Shared risks, costs, and rewards.
•
More timely and more customer focused
innovation brought to the market. Enhanced
knowledge creation and internal capabilities and
development.
Collaboration with others for enhanced
idea generation, sources of new
technology, design, development,
commercialization, and servicing.
•
New knowledge acquisition, processing, sharing,
integration, and application to innovation.
•
Suppliers, lead users, universities, research
consortia, producers, and outside organizations
may partake in and become a vital part of the
innovation process.
Shared goals and objectives, world views,
knowledge creation, and architecture of
participation.
•
Expanded innovation team with coevolving
capabilities, roles, and responsibilities engaging in
more timely and customer-centered innovation.
Offensively uses IP with emphasis on
licensing to outside parties.
•
New and extended IP applications.
•
Additional revenue streams.
However, it seems the project mix is now changing as new avenues for knowledge
creation propel firms to venture into areas previously perceived as risky. Ettlie and
Subramaniam (2004) find support for internal and external sources of knowledge
creation and application during innovation. In their study of manufacturing firms,
they found firms developing new-to-the-firm, new-to-the-industry, and new-to-the-
world innovations. This means these firms were venturing outside of their existing
expertise, venturing into more risky innovations, and finding success in doing so as
they collaborate with external partners.
According to Navi Radjou, principal analyst and vice president at Forrester
Research, “75% of CEOs across industries now view external collaboration as indis-
pensable to innovation (Rowell, 2006).” Nick Donofrio, EVP of innovation and
technology at IBMCorporation, believes that “one of the most profound shifts trans-
forming business and society in the early twenty-first century is the rapid emergence
of open, collaborative innovation models” (Tapscott & Williams, 2006).
7.3.2 Team Structure
In both closed and open innovation models, teams continue to be representative
of their organizational structure. Closed models of innovation utilize collocated
teams with members situated within close proximity to each other, often within the
same building, office complex, or city. At times members may be scattered through-
out a state or a country. While organizational and team structure are often viewed
along a continuum from purely functional to project based, we have seen a shift
toward the use of projects and project management approaches throughout the
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