A firm looking to innovate and create the next disruptive product might rely on their internal staff and R&D for iterations. Open Innovation supports the incorporation of external sources of knowledge to develop innovative ideas.
But is it the right strategy for your firm to adopt?
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Discover the benefits and drawbacks of open innovation.
External sources consulted in open innovation could be hiring agencies, gathering feedback from customers, looking at competitors’ products, and more.
Benefits of the Open Innovation Methodology
There are many benefits that arise if a firm decides to adopt the open innovation methodology.
Receiving External Expertise
Internal knowledge is not always sufficient for innovation. This is not due to lack of expertise or experience, but it could be a case of tunnel vision.
Innovative ideas from employees could be limited by the position and department they are in.
With open innovation, firms can acquire knowledge of outsiders whether they are experts or the general public.
This specialized knowledge can bring new perspectives which can foster a culture of innovation internally.
More Creative Ideas
There are wide range of “business partners” with an open innovation methodology. These partners can bring a fresh set of ideas and creative outlook to the field.
Speedier Market Launch
With outside resources being utilized for innovation, the product or service being worked upon can be launched at a speedier pace.
This is because product development is streamlined and resources are used optimally.
Direct Insights from Consumers
One of the biggest advantages is receiving input directly from the public. After all, there are the end consumers. With their insights, significant ideas can be brought out to make changes to the product.
Additionally, the opinion of the public generally sways with the current trend. So, input from them ensures the product fits the market and delivers proper service.
Drawbacks of the Open Innovation Methodology
The benefits make it seem lucrative, however, there are some drawbacks.
Risk of Revealing the Product
External sources might bring fresh perspectives, but they might take out internal knowledge as well. The information that is shared with them could easily be distributed after their consultation which can lead to IP theft.
Too Many Collaborators
Incorporating too many people into the mix can create added collaborative issues. From goal development to workflow, everything is affected by the total number of collaborators. If there are more, then it will create more management complexity.
Over-Reliance on Outsiders
Consulting with too many external sources can create an over-dependency situation on them. This can limit the innovation potential of the internal staff which leads to added costs on both ends.
