Two Faces of Open Innovation
By Charlie Leadbeater
March 14: Listening this morning at Nesta to Matt Locke, outgoing head of open new media innovation at the BBC, helped to clarify a distinction about open innovation which I had not previously got clear enough. There are two faces of open innovation.
The first, and most familiar, is open innovation into a company or organisation. This is open innovation of the kind analysed and advocated by Henry Chesbrough, to widen the pool of ideas a company can draw upon. This is open innovation of the kind practised by Goldcorp and P & G. It is the model that Wired magazine calls crowdsourcing. It is Pop Idol. Or as the head of digital music at Sony put it at the Nokia world conference in Amsterdam in the Autumn, this is the world in which all of humanity becomes part of a hit generating network for the music business. Open Innovation IN provides organisations with a wider network of talent and ideas to draw upon but often feeding an unchanged business model for how the IP is exploited and commercialised.
The second approach is Open Innovation OUT. This is where a group of people, a movement, sometimes a company, created a kernel or a platform, with some tools, onto which people can add their ideas and contributions. Open Innovation IN narrows down a wider set of contributions into a funnel of corporate development. Open Innovation OUT is designed to allow a process of evolutionary innovation that accretes and grows as each new person adds their piece of infomation, code or module. Open Innovation OUT is Wikipedia and Linux, open source and social movements like Avaaz and Move On.
Of course these two models are not necessarily incompatible. Some innovative companies are good at drawing in ideas and letting them out: Google perhaps is an example. And open innovation in all its guises has some common features: collaboration, networks, shared ownership.
But the two kinds of Open Innovation are really quite different. Open Innovation IN, crowdsourcing, is a process innovation to give established organisations access to a wider network of talent, extending the range of ideas and often cutting the costs of innovation. A wider funnel feeds an essentially unchanged business and corporate process of exploitation and commercialisation. Open Innovation OUT however is more like crowdcreating, people building something together. That may well require a different approach to ownership which is mutual and open source.
Find out more at http://www.charlesleadbeater.net where Charles has posted the draft of his next book We-Think: The power of mass creativity.