Innovation in the 21st century is increasingly open, collaborative, multi-disciplinary and global. There are erosion factors which are providing increasing challenges for traditional R&D functions to retain knowledge. Of these mobility of people, loss of technological hegemony, increasing sophistication of university research schemes, knowledge leak, pervasive communities of users practicing their own innovation and availability of venture capital are key factors.

Closed Innovation is being challenged; Joy’s law states:

No matter who you are, most of the smartest people work for someone else.

Tapping into the knowledge that sits outside of the enterprise and having a process to cross-fertilise internal innovation strategy is therefore important and increasingly prevalent.

Carburetting the Innovation Funnel

I frequently amuse people when doing my Open Innovation elevator pitch, ‘air drawing’ an Open Innovation funnel and demonstrating (think air steward giving safety demonstration) drilling holes into the funnel to allow ideas to flow in and out from any external or internal source (my ‘Ecosystem of Everything’). When waving hands with excitement I use exotic metaphors such as ‘fuel injecting’ and ‘carburetting’ the innovation funnel.

Initially formalized by Professor Henry Chesbrough at UC Berkeley in his book ”Open Innovation”, it states that in the new knowledge economy where Open Source Software like Linux, Apache and Firefox are seen as equivalent to proprietary systems in terms of quality and reach, where Wikipedia is used more and has similar or better accuracy than Encyclopaedia Britannica, the time has come to use external sources to drive innovation while contributing in return.

The motivation for Open Innovation is very similar to that of Closed Innovation, namely pursuit of greater corporate success, greater profit and reduced risk. Closed Innovation however requires ‘widening’ of the innovation funnel (to ensure the richest set of ideas is being selected initially). These are then filtered through the funnel using ‘selective reduction’. If we metaphorically drill holes in the Closed Innovation funnel and provide for controlled ingress and egress of ideas there is much greater potential in the innovation cycle.

Vertical Integration is Weakening

Open Innovation clearly recognises that vertical integration as a sole strategy is weakening (‘we know best’ thinking as an exclusive approach is ageing). It is equally important to note the presence of egress flows from an Open Innovation funnel. This recognises that not all internally sourced ideas will make it through the ‘selective reduction’ processes that filter the wide base of initial ideas into actual products or services. Open Innovation is as much about appropriate sharing of your unused ideas with others as it is tapping into external knowledge sources. The barrier of the enterprise is therefore no longer rigid. Ideas can filter into and out of the innovation funnel via controlled routes.

Open Innovation has advantages over Closed Innovation in terms of:

1. The ability to leverage significant diversity

2. The ability to share risk (joint venture, spin-out, spin-in, divestment, boomerang models etc.)

3. The ability to monetise knowledge flows into and out of the innovation funnel

4. The ability to leverage additional business models and ‘aim the funnel’ at new markets.

Open Innovation is typified by the presence of external collaboration, knowledge communities and innovation ecosystems often comprising, universities, research institutes, suppliers, partners, competitors, government, non-governmental organizations and third sector organisations. In the truest sense it is ‘the Ecosystem of Everything’, as von Hippel rightly highlights the importance is the idea and the business model, not the source of the idea.

An Ecosystem of Everything

Open Innovation also comes in a many forms, from massively distributed approaches which focus on creativity above commerce (Open Source software for example) to small and highly selective initiatives such as closed competitions. I primarily focus on Open Innovation as collaborative commercial innovation ventures (i.e. commerce not commune).

Open Innovation throws up some interesting challenges, particularly around intellectual property rights and associated legal issues. There is also what I describe as “Open Innovation Culture Shock” and a need for strong business change and communications to make Open Innovation appealing. Overcoming ‘not invented here’ syndrome is not trivial and there are challenging questions about who you should Open Innovate with, to what degree and whether this openness is graduated throughout the innovation process. The castle walls of Closed Innovation are comforting to traditionalists and we need to guide sensible innovation decisions, whilst respecting the need (for all parties) to protect their commercial interests.

The potential of an ‘Ecosystem of Everything’ is really interesting, and patterns such as knowledge broker, facilitator and community builder are a few areas of personal interest. Ecosystem modularity, extensibility and interoperability will no doubt surface new standards, products and processes.

Open Innovation combined with horizon scanning, Pattern Based Strategy, Social Network Analysis and collaboration is a compelling and powerful technique.

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One of my favourite periods in history is that of the 18th Century Enlightenment, a great outpouring of intellectual and scientific achievement. My heroes are the vanguard philosophers, mathematicians and scientists who challenged norms, received wisdom and at times wilful ignorance. Bacon, Descartes, Spinoza and Hobbes as forerunners, Francis Hutcheson, Adam Smith and David Hume, Newton, Diderot, Leibniz, Locke, Kant and Montesquieu and other influential thinkers across Scotland, England, France, Germany, Russia and Poland.

Enlightenment thinking was characterised by deep, multi-dimensional and cross discipline consideration. It was also socially radical. Paradoxically 21st century thinking at times lacks intellectual depth and breadth and rewards and encourages superficiality. This is framed in a world of 24-hour news, ‘rush to publish’ and ‘fresh is best’. Should we revisit and re-apply the disciplines of the 18th century influencers and recapture cogitation?

The Digital Revolution has brought many benefits and profound societal changes. As we endlessly skim the web seeking ‘information rewards’ like lab rats I fear we are in danger of losing aspects of cognitive function such as the ability to read and think deeply. Our brains are being re-wired by the very machines and technological channels that we mistakenly believe we control.

The War Against Superficiality

Nick Carr (formerly the executive editor of the Harvard Business review, and blogger), the author of “The Big Switch: Rewiring the World, from Edison to Google” famously posed the question “Is Google making us stupid?” Over-reliance on “search memory”, the neurological bombardment of constant digital stimuli and exponential demands of multi-tasking appear to be making us ‘flighty’ and shallow.

Is the web’s business model built on the art of distraction? Velocity counts, the paradigm demands constant skimming, link hopping, and attention hogging. Web commercialisation and click revenues from advertising demand constant motion. A consumer ‘at rest’ decays in value. Velocity through the digital mire may reward the AdSense gods, but does little for our comprehension, except service (and indeed reinforce it) with trifling input. In the future there may be goal oriented or blinkered search that will prevent our meandering, but for now self-discipline and an ability to evaluate and consume quality content is a personal constraint.

As I ‘retreat to value’ and campaign for the reading of the printed word, I hear screams of ‘Luddite’ echoing across the digital expanse. And true, the oral tradition of Socrates wrestled with the written tradition of Plato, a concern largely unfounded. Gutenberg’s printing press led to a surge in intellectual mass-cultivation and enlightenment, and the ‘web tamed’ offers equal reward. The tools we use however become part of us, and we become part of them. Nietzsche reminds us (describing his typewriter):

The Writing ball is a thing like me: made of iron
Yet easily twisted on journeys.
Patience and tact are required in abundance,
As well as fine fingers, to use us.

Indeed the marvellous plasticity of the brain conspires in our undoing. “What fires together, wires together” is a truism of the construction and reinforcement of neural circuitry. The brain adapts, and seems to be adapting to the attention deficient world of the web, and not necessarily to our benefit. Our ability to comprehend and subsequently ruminate over weighty topics appears to be in decline. The speed at which information can be consumed is increasingly a determining factor in its perceived quality and importance.

Seneca said: “To be everywhere is to be nowhere” and a balance is to be struck in the mind of a 21st Century Enlightenment thinker. The volume of information we may consume or the disciplines we may explore is vast, yet we should be bold!

Deep Thinking, Collective Intelligence

The commercial world is no sanctuary of intellectual hedonism, nor indeed should we wish it to be. The Scientific Community is not a Socratic collective. As I approach our research subjects I do however do it with reverence for my 18th Century ‘mentors’. I am sure Open Innovation would have resonated with their egalitarian ideals, Social Networking Analysis with their sociological curiosity, Pattern Based Strategy with their drive to predict the unpredictable and make sense of trends.

Substance comes with deep thought, contemplation, originality and innovation. What we do now, and together, as a new company is immensely exciting. What a yardstick it is to aspire to the heights of the vanguard of the Age of Reason.

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