MIT Sloan Management Review

This article examines an experiment in open innovation applied to scientific research at Harvard Medical School. Harvard Catalyst, a pan-Harvard agency, modified the traditional grant proposal process to bring greater openness into every stage of research. In the end, 150 new hypotheses were proposed. The Harvard Catalyst experience suggests that open-innovation principles can be applied to a well-established research organization.

3-D printing is the printing of solid, physical 3-D objects. “Just as the Web democratized innovation in bits, a new class of ‘rapid prototyping’ technologies…is democratizing innovation in atoms,” Wired magazine’s longtime editor-in-chief, Chris Anderson, stated in Makers: The New Industrial Revolution. Indeed, open-source 3-D printing fits in with the general trend of open-source innovation by collaborative online communities. The big question: How should existing companies respond?

Customer-oriented companies pride themselves on understanding the marketplace and integrating the best ideas into future products. But what would it be like if you found that you had hundreds, if not thousands, of knowledgeable users ready and eager to spend nights and weekends acting as extensions of your research and development department? For the Lego Group, the Danish maker of children’s creative construction toys, this close bond with the user community is not a pipe dream but a reality.

Innovation doesn’t just come from the geniuses who come up with completely original ideas. Instead, it’s tweakers like the engineers in the British Industrial Revolution and Apple’s Steve Jobs who take existing ideas and turn them into something better.

A new approach to modern scholarship, called crowd science or citizen science and utilizing volunteers from around the world, turns science into games. Already it is making contributions to the science of ecology, medicine and astronomy.

“Not-sold-here” tendencies, the instinct to not want to give away a company’s “crown jewels” through strategic licensing, are an impediment for companies looking to pursue open innovation practices. Monetary and non-monetary incentive mechanisms in support of technology transfer, such as an open innovation award, can help break this instinct.

Five tips for how companies can work with consumer innovators, or “casual entrepreneurs,” by understanding that “lead users” are key, IDing those lead users and figuring out how to work with them (and not against them).

The right open innovation strategy can yield performance benefits — but first your company needs to overcome “not-invented-here” and “not-sold-here” attitudes.

Companies such as Procter & Gamble, Cisco Systems, Genzyme, General Electric and Intel are often credited with having attained market leadership through open innovation strategies. By tapping into and exploiting the technological knowledge residing beyond their own R&D structures, these companies outmaneuvered rivals. But while other organizations try to follow their example, many are failing because they neglect to ensure that the outside ideas reach the people best equipped to exploit them.

“As examples like Wikipedia and Linux show, it’s now possible to harness the collective intelligence of thousands of people around the world to work closely together at a scale that was never possible before in human history.�

In a recent interview with the website InnovationManagement, open innovation expert Henry Chesbrough discussed his new book, Open Services Innovation, and the importance of service innovation in general:

“We know a lot about how to innovate new products, new processes, and new technologies, but know far less about how to innovate

Services comprise more than 70% of aggregate gross domestic product and employment in the Organization for Economic Cooperation and Development countries. As a result, both individual companies and entire economies face the challenge of how to innovate in services. One suggestion: Companies should both organize their innovation processes to be more open to external knowledge and ideas and also let more of their ideas and knowledge flow to the outside when not being used internally.

Massachusetts Governor Deval Patrick (left) and Massachusetts Energy and Environmental Affairs Secretary Ian Bowles (right) at advanced battery maker A123 Systems.
Image courtesy of Flickr user Office of Governor Patrick.

Traditionally, we have tended to think of businesses (or individuals who then start businesses) as the principal source of innovative new products or services in a market economy.  But, in a thought-provoking new working paper, Carliss Y.

Eric von Hippel of the MIT Sloan School has long argued that users play a larger role in product development than is commonly believed. Now, in a new working paper, Pedro Oliveira and von Hippel take a look at customers' role in innovation in a service industry: banking.

When working with external innovators, should companies seek to organize the innovators into communities — or into competitive markets?

Image courtesy of Lawrence Lessig.

For the past decade, Lawrence Lessig, a professor of law at Stanford Law School, has been best known as an iconoclastic, inventive voice for copyright reform.

Companies typically have antagonistic relationships with hackers, “modders” and others who alter their products, but is there a way to work with — instead of against — such underground innovators?

The use of external sources for help with innovation is becoming increasingly prevalent. Rather than take an ad hoc approach, companies should develop a sourcing blueprint to obtain the consistent results they need.

Open-source software development projects — Internet-based communities of software developers who voluntarily collaborate in order to develop software that they or their organizations need — have become an important economic and cultural phenomenon. Sourceforge.n