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Open innovation: prepare for changes


Writing for Bloomberg Businessweek, Stefan Lindegaard discusses 'open innovation' and the good and bad effects it can have on a company.

Explaining the concept, Lindegaard says: "Successfully adopted by companies such as Procter & Gamble, General Mills, and Intuit, open innovation is about bridging internal and external resources and executing on the innovation opportunities that arise from this combination."

He adds: "Open innovation will not only lead to new ways of making innovation happen; there will also be side effects. As an open innovation advocate, I think most of these effects will be positive. But it's also reasonable to expect that some will be mixed or perhaps even negative."

With that in mind, Lindegaard provides a guide to the potential byproducts of implementing open innovation.


The first point the author makes is that open innovation is about managing change. But many executives are resistant to change and prefer for things to stay as they are, so Lindegaard warns that the open innovation process carries a risk of upsetting the status quo. "The winners will be the companies and executives that are best at handling this."

However, a positive side effect of innovating with partners is that it can serve to remind corporate leaders to "keep their eye on funnelling resources toward serving real commercial needs", a mindset which Lindegaard says can be helpful way beyond the innovation process.
What's more, working with partners allows those leaders to see new ways of getting things done and evaluate their own practices and adjust them accordingly.

However, increased complexity in the organisation is among the less desirable side effects, and so a key challenge of open innovation is to work out a way of relinquishing top-down control while maintaining efficiency. Lindegaard says executives must develop an "overarching strategy" that can be clearly explained to employees and partners.

Highlighting a more positive byproduct, the author explains that "increased focus on customers can be harnessed through open innovation and can lead to better relationships with them".

Lindegaard insists that the key to open innovation success is to be flexible enough to deal with issues as they arise.

The Side Effects of Open Innovation
Stefan Lindegaard
Bloomberg Businessweek