The Scientific Community

Open Innovation: Love between the Balance Sheets?

People don’t need a lot of process when forming relationships. It’s quite instinctive knowing who you like, who you don’t like and who you trust or distrust. That’s why we like ‘snog, marry, avoid’. Facebook and other social media show how instinctive all this is, and often how open people can be when trust is developed.

Companies though don’t do relationships instinctively. Viewed from an accountant’s perspective they are after all entirely separate balance sheets. They sometimes enter formal relationships but the courtship can be long and the breakup rate is high. They are only starting to learn how to form networks of friends and relations*.

The problem is that companies are having to have more friends and relations and be more open because their survival requires it, now that the pressures of competition and technology change are so great. And they need to learn from people rather than bankers.

In a way they are already a bit like people. Small companies like babies need nurturing –they often start life in ‘incubators’. Then as toddlers, companies are very trusting and will play with anyone. But as they grow into spotty adolescents they are moody, inconsistent and uncomfortable with themselves as they battle internally between being a rebellious child with creative ideas and an efficient conforming adult with global processes. They can’t work out what they want to be.

A few years later, a company in its late emotional teens has lost its acne, worked out what it wants to do and is shaking up the world as it does so. It perhaps makes a few errors of judgement, like accidentally capturing the data from open wifi networks throughout Europe, but by the time it has reached its emotional thirties, it has finally learned how to manage the inherent contradictions of products, markets and geography which challenge all major global corporations. It’s married with two kids and has learned how to cope with life, the M25 and Christmas with the partner’s family.

But when it gets to this age, it is nostalgic about its youth. It can’t quite fit into those old slim fit trousers and wants to be again be young and alluring to potential partners and venture capitalists.

Open Innovation holds the promise of the mature company learning from the ‘next generation’ – rather like a parent succeeding at the almost impossible task of appearing cool to the childrens’ friends. You have the wisdom of age and the enthusiasm and creativity of youth – plus the bank balance of a thirty five year old with the ability of a teenager to enjoy it.

It also offers the prospect of a company having as complex set of relationships as the average human, and being as comfortable as people in managing them. You will as a company have like a person evolving range of relationships with other companies.

Some you will have a deep legal bond with, some you will sometimes go on holiday with and share towels, some you will just share jokes with over a drink and some you will only send annual Christmas cards or even worse ‘uncard’ them on the company equivalent of Facebook.

Some you will advertise for to do your business process outsourcing in the local corner shop and some you will crowdsource over the internet on ‘ecstaticrelationship.com’ as potential intimate partners. And you will doubtless ask your friends and relations for the venture capital to set up home with them.

The thing is, this is becoming reality. Open innovation (a concept first formalised by Henry Chesbrough in 2003) is not a panacea, but is becoming increasingly mainstream as companies learn how to do it and the ecosystem of companies to make it happen matures. And the IP issues which stopped companies having the relationships they needed because of the fear of openness have largely been solved, in the same way that taking the ‘right precautions’ can prevent unwanted pregnancy.

Atos is very commited to Open Innovation so that it can bring value to clients by working flexibly with innovative partners, proposing new business models and leveraging the complete Atos innovative ecosystem. You can read more about our vision in the white paper ‘Open Innovation’ (link).

(*) It was Rabbit in Winnie the Pooh who first had an extensive network of friends and relations. But it was Winnie the Pooh himself who best expressed the cultural reluctance of companies to open innovation. ‘When you are a Bear of Very Little Brain, and you Think of Things’ he once said to Christopher Robin ’ you find sometimes that a Thing which seemed very Thingish inside you is quite different when it gets out into the open and has other people looking at it’. He needs to talk to our head of IP about sensible precautions.