FEATURE ARTICLE
Improving Design with Open Innovation A Flexible Management Technology It may not be necessary, or even possible, to apply open innovation to to all projects in the same way. John K. Christiansen, Marta Gasparin, and Claus J. Varnes
OVERVIEW: Is it necessary or even possible to apply the management technology of open innovation to all projects in the same way? An analysis of the practices used in different product development projects in the same European medical company shows that commercially successful projects did apply many of the best practices for open innovation. However, projects were not equally successful. The outcome seems to be highly influenced by the type of collaborative arrangements used and their application. In particular, the analysis indicates that organizational factors seem to be indicative but not sufficient for success, and some open innovation practices were more successful than others. The most open and exploratory practices were not so successful in this company. This might be due to the nature of innovation, which develops in unpredictable and nonlinear ways. These observations suggest that those involved in open innovation need both a broad knowledge of the various potential elements of an open innovation effort and a flexible attitude toward their application. KEYWORDS: Innovation management technologies, Open innovation, Adaptation, Sensemaking
Since Henry Chesbrough introduced the paradigm of open innovation in 2003, the concept has been widely adopted and closely studied. Researchers and practitioners have
John K. Christiansen is a professor in the department of operations management, Copenhagen Business School. He is researching the design, implementation, and effects of management technologies for innovation and project management. He has published on sociological and organizational aspects of innovation management, decision making, and implementation. He is involved in the International Product Development Management Conference. Recent publications explore portfolio management in theory and practice, sensemaking of gate systems, the allocation of managers’ attention at meetings, and how framing can facilitate product qualification processes and alter product life cycles.
[email protected] Marta Gasparin is a PhD student in the department of operations management at Copenhagen Business School. She is participating in the research program on management technologies for product and process innovation management (PIM). She has a double master’s degree from Bocconi in economics and management in arts, culture, media, and entertainment and an MSc from Copenhagen Business School with a concentration in management of creative business processes. Her research focuses on innovation and design management.
[email protected] Claus J. Varnes is an associate professor in the department of operations management at Copenhagen Business School. He is doing research in the areas of marketing, new product development, and performance management. Recent publications include analysis of attention direction in decisionmaking meetings, sensemaking of structured gate systems, and reinterpretation of the product life-cycle concept.
[email protected] DOI: 10.5437/08956308X5602006
36 | Research-Technology Management • March—April 2013
explored the challenges involved in the realization of open innovation (Slowinski and Sagal 2010) and studied the many different ways companies engage in open innovation (Igartua, Garrigós, and Hervas-Oliver 2010; Huizingh 2011). However, as Bianchi, and colleagues (2010) note, there has been limited research into the ways in which companies translate the management technology of open innovation into practice across different units and projects. This is particularly important given the malleability of the concept. Open innovation has been discussed as a management practice (Dahlander and Gann 2010), as a conceptual construct (Euchner 2010; Huizingh 2011), as a strategy (Bowonder et al. 2010; Igartua, Garrigós, and Hervas-Oliver 2010), and as a research field (Elmquist, Fredberg, and Ollila 2009). The diversity of this work suggests that open innovation may have many meanings making it a “rich concept that can be implemented in many different ways” (Huizingh 2011, 3). Even as open innovation requires deep changes in a company’s established structures, processes, and corporate culture, frontline innovation activities are supported by practices and perceptions that are passed from one employee to the next and from project managers to subordinates. Over time, different organizational units, departments, and functions develop their own procedures based on the units’ professional standards, value systems, and internal interpretations of corporate strategies and their roles in the organization. For example,
legal departments originally established to protect company intellectual property (IP) and staffed with highly educated lawyers trained to protect IP may find it difficult to integrate more open IP structures that facilitate partnerships and collaborations. In an open innovation context, a company wants not only to protect its IP but also to access IP as a resource. Those involved in implementing open innovation thinking and practices, therefore, need a broad understanding of the concept and of the many ways it can be translated into practice across organizational units and even individual projects. Our work is aimed at understanding how the concept of open innovation is applied through the lens of local translations into different practices and mobilized in different ways in innovation projects within the same company. By examining the implementation of open innovation in eight projects in the same unit, we illustrate how different translations of the concept manifest themselves in different collaborative practices. The Four Elements of Open Innovation Chesbrough describes the evolution of open innovation as beginning with establishing relationships that facilitate knowledge flows, then moving to integrating external technology into the organization while releasing unused internal ideas to other businesses that can use them, and finally, reshaping the business model (Chesbrough and Euchner 2011). In a truly open innovation system, information and technology flows are bidirectional, encompassing both “inbound open innovation, which is the practice of leveraging the discoveries of others,” and outbound open innovation, in which firms “look for external organizations with business models that are better suited to commercialize a given technology than the firm’s own business model” (Chesbrough and Crowther 2006, 229).
An analysis of recent work on open innovation in key journals offers some insight into the approaches required for a successful approach to open innovation. Fully implementing open innovation requires attention to four key elements: developing networks to facilitate the flow of knowledge, strengthening knowledge exchange, creating intellectual property (IP) protection structures that accommodate open exchanges, and creating a business model to support openness (Chesbrough 2003a, xxiv) (Table 1). These key elements describe characteristics that are often ascribed to the company as a whole but that also are found and applied in individual projects. Each of these dimensions must be supported by relevant systems and structures and backed by company incentive systems to ensure the processes are implemented. This may require changes that challenge established practices. Network Development. Networks can be can be formal or informal, but they must be supported by systems and incentives that foster network building and encourage the maintenance of networks (Chiaroni, Chiesa, and Frattini 2010; Knudsen and Mortensen 2010; Bianchi, Chiesa, and Frattini 2011). Networks connect the company to external sources and partners, but they also need to be matched with internal networks to facilitate the internalization of knowledge acquired through the external network (Chiaroni, Chiesa, and Frattini 2011). Thus, organizations must have structures and systems that support the development and use of external networks, backed with incentives that support an external orientation and make it work in product development projects. Knowledge Exchange. Open innovation requires the exchange of knowledge across social and individual networks, both inside and outside the organization. Indeed, knowledge exchange is a central part of the definition of open innovation
TABLE 1. The four key elements of open innovation Element
Related Practices
Developing Networks Formal or informal sources and platforms for exchanging information and knowledge
Organizational structures and systems support collaboration with both outsiders and insiders. Reward and performance measurement systems support an open innovation approach. Collaboration is taking place among team members and organizational units and does actually function.
Knowledge Exchange The capability to allow diffusion exchange, and absorption of knowledge
The organization and project supports knowledge exchange and integration of knowledge and has the needed absorptive capacity. The organizational and project norms and culture support the use of external knowledge (identification, exploration, exploitation, and retention of knowledge). The organization and project uses technology scouting, watching, and mapping. The organization and project have and use a system and processes for knowledge transfer.
IP structures and exchange Processes to support companies to acquire, exchange, and sell IP and licenses
There are mechanisms and processes that support selling, buying, or acquiring IP.
Creating a new business model or modifying the existing one
Modifying a closed business model into an open business model, e.g., by engaging in partnerships, sharing IP rights, or through other open mechanisms, based on or related to the specific project.
Improving Design with Open Innovation
Established IP transfer methods are used in the project.
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Open innovation requires the exchange of knowledge across social and individual networks, both inside and outside the organization.
offered by Chesbrough: “Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively” (Chesbrough, Vanhaverbeke, and West 2006, 1). The exchange of knowledge requires changes in behavior in collaboration and in the use of external markets. Knowledge exchange thus should move from scanning for new knowledge to engaging in the collaborative development of new knowledge with those outside the organization through an open approach. This progression is accompanied by a change in the approach to IP, as partners in knowledge creation are given access to information that might before have been considered protected. Ultimately, knowledge exchange can take the form of partnerships that allow all involved partners to increase their knowledge, for instance through joint business models. Knowledge exchange can also occur through external markets, which often are used to facilitate the exchange of “packaged” forms of knowledge, such as specific IP. Utilizing knowledge gathered from outside also requires that companies have the absorptive capacity to recognize the value of new external information and assimilate it (Cohen and Levinthal 1990). To develop this capacity, managers can explicate the need for external knowledge and stimulate involvement in the assimilation effort across the organization (Chesbrough and Crowther 2006, 234). This can be accomplished through efforts to influence organizational norms and values to be more open to new ideas from outside or by the introduction of performance systems that reward such behavior. In many companies, the corporate culture can limit the collaborative use and generation of knowledge as internal norms and values contribute to the rise of a “not invented here” syndrome. Thus, companies must develop the capabilities to exchange, integrate, recognize, and benefit from external knowledge sources, and this must be backed by systems, norms, and corporate values that recognize the value of external knowledge. IP Protection and Exchange. In his earliest explications of the open innovation paradigm, Chesbrough (2003a) suggests that companies should capitalize on unused intellectual property, licensing out what they do not use and acquiring needed technology from outside. This requires that firms commercialize external (as well as internal) ideas by deploying outside (as well as in-house) pathways to the market. Specifically, companies can commercialize internal ideas through channels outside of their current businesses in order to generate value for the organiza38 | Research-Technology Management
tion. Some vehicles for accomplishing this include startup companies (which might be financed and staffed with some of the company’s own personnel) and licensing agreements. In addition, ideas can also originate outside the firm’s own labs and be brought inside for commercialization. In other words, the boundary between a firm and its surrounding environment is more porous, enabling innovation to move easily between the two. (Chesbrough 2003b, 36)
Until recently, most companies have considered IP protection structures mechanisms to protect company property rather than tools to enable the commercialization and exchange of knowledge. Within open innovation, IP is considered a tool to sustain innovation, by generating rents that are reinvested in the company, creating a positive loop of innovation. Although technology in-licensing is well accepted as a way to supplement internal competencies, the outward transfer of proprietary technology has “only recently become an important dimension of corporate strategy” (Lichtenthaler 2010, 429). In some instances, the exchange of IP and out-licensing might be the only way to get access to external technologies (Lichtenthaler 2010). This view of IP challenges established practices in most companies, where IP has hitherto been something to control and keep in-house. Many corporate IP policies are driven by a diffuse fear that competitors could benefit from unused ideas. This mindset can be difficult to change. Adopting the open innovation view of IP as a commodity to be deployed in support of knowledge exchange requires facilitating mechanisms and processes that allow project teams to both acquire external IP and offer internal IP as part of the innovation process. Business Model Creation. The business model defines the value proposition (the utility and value created for customers), determines the market segment and the structure of the value chain, and defines the economic return on the innovation (Chesbrough 2003a, 2003b). In other words, the business model specifies how companies capture value from their innovations. Business models play a major role in linking technical potential to economic outcomes (Chesbrough 2003a). In this context, the modification of existing business models and the creation of new business models are important elements in the open innovation paradigm. Modification of an existing business model to foster a more open innovation approach is the outcome of changes in how companies deal with external networks, knowledge exchange, and IP protection. Thus, the move to open innovation involves changes around multiple, interrelated organizational attitudes that are interrelated with the business model; the treatment of IP as a commodity, the regard of knowledge as benefitting from exchange rather than protection, and the capture of value from interactions in open networks can only be fully achieved if companies are willing to modify their closed business models (Chesbrough 2003a). The closed business model assumes that the company has all the relevant knowledge and can consistently develop new, successful products and that IP management should be focused on protection. On the other hand, the
Improving Design with Open Innovation
open business model assumes that companies do not have all of the most relevant knowledge and cannot create it independently; rather, networked collaboration will increase the total value of the knowledge developed and the combination of internal and external ideas creates more profitable products. Ideas, knowledge, and intellectual property are thus treated differently in the open paradigm in a way that challenges the dominant concepts driving closed business models. The introduction of any new management technology or concept will face resistance from established approaches, but the open innovation approach in many ways represents a special challenge since it requires modifications that challenge the notion of the company as a unit having more or less fixed borders. As a company moves toward an open
Summary of Projects Eight new product development projects were included in the study. TwoFold. An alliance was formed with another global company in the medical device industry to develop a new family of devices. The scope of the alliance’s mandate was to design and launch a treatment monitoring system, including a new medical device along with educational material and therapeutic guidelines. A device was developed with an accompanying service package. Although the product was eventually removed from the market due to insufficient revenues, the project manager considered the alliance a success. The companies developed a high level of mutual trust and a cooperative environment that allowed for easy agreement on IP ownership. RightOne. This project was formed to develop a customizable device inspired by input from a lead user. The process was further informed by interviews and close interaction with selected users. The result was a radically new product that was well received by the market; the company considers the product a huge technical and commercial success. SecondOne. SecondOne was formed with the aim of making the benefits achieved for selected users in the RightOne project available to a much broader user segment. To expand the competencies of the project team, external partners and an external designer were involved, and the project was organized as a joint venture, with IP rights eventually transferred to the company. The project became both a technical and commercial success. EasyOne. The aim of EasyOne was to create a product to serve customers who had special challenges in using medical equipment due to poor eyesight. At first, the company attempted to develop the product internally, but the team eventually opted to involve an external supplier with design and manufacturing expertise. The project objectives were ambitious, and the supplier was asked to create a solution based on their interpretation of the project mandate rather than from detailed specifications. The solution was interesting and cost effective; the device is considered both a technical and commercial success. MemoryDevice. The objective of this project was to develop a significantly cheaper version of an existing medical
Improving Design with Open Innovation
The modification of existing business models and the creation of new business models are important elements in the open innovation paradigm.
innovation approach, employees and managers must rethink their own roles and the role of the company as an entity embedded in networks and relations, rather than one with fixed, impermeable borders.
device. Initially, the project focused on utilizing internal resources along with a search for external knowledge, but as the scope and ambition of the project widened—to developing a more radically new product—the unit involved external knowledge brokers that facilitated interactions with several global networks of innovators. Useful suggestions, designs, and manufacturing solutions were produced and the product is considered a technical and commercial success. Predictor. This project was intended to develop a diagnostic device that could improve diagnosis, control, and treatment by providing improved analysis of medical data. The project was part of a large-scale international consortium including universities, healthcare institutions, and pharmaceutical and medical device companies working together on the task. Although no product resulted directly from this project, the project did produce knowledge that was later used in other projects. DesignDevice. This project was intended to make it possible for customers to apply their own design ideas to company products. The conceptual idea was developed into a webbased solution that communicated customer preferences directly to the manufacturing unit and a machine that translated user input directly onto the medical devices they ordered. Unfortunately, after an intensive and successful development process, market tests showed limited demand for this add-on product, so it was never sent to market. PDA Device. This project team was charged to develop a device to monitor medical data, communicate that information directly to databases via the Internet, and provide feedback to users on their current health status. The project involved external software developers and healthcare providers, as well as a variety of outside partners, as it required a diverse array of knowledge in database management, Internet communication, and equipment design. For the first time, the company agreed to share IP developed in connection with the project. The collaboration worked well. However, although a business model was developed to deliver the device and capture the value of the data monitoring, the interactions between the different elements in the product-service package proved to be very complex to manage technically. The project did not produce a working device and no product was sent to market.
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TABLE 2. Summary of the eight product development projects analyzed Project
Objective
Success Level
TwoFold
First-of-its-kind device integrating both monitoring and treatment First device of its kind to have an LCD screen
Alliance deemed successful; mutual trust and cooperation allowed IP agreements. Technical but not commercial success; product removed from market due to low sales.
RightOne
Device to eliminate discomfort of traditional treatment methods and provide a simple means of giving precisely the right dose of medicine, facilitating multiple daily uses by patients/users
Product initiated by input from lead user. Radical new product well received on market.
First fully disposable treatment device in its class Combines a high degree of simplicity with convenience and high level of accuracy
Extended advances of the RightOne project.
EasyOne
Treatment device designed for users with poor eyesight or reduced manual dexterity
After attempts to develop device internally, company turned to supplier for additional support. Resulting product was fast, interesting, and cost-effective.
MemoryDevice
Treatment device with integrated memory to record use of treatment for monitoring and analysis
Predictor
Prediction-based medicine management tool that uses past information to optimize therapy
DesignDevice
Web-based interface that allows users to design and order medical devices with custom exteriors
Technical but not commercial success; product never sent to market due to market tests showing limited demand.
PDA device
Medical PDA used for treatment, monitoring of blood for various substances, and recording and uploading data to the Internet Included development of web-based services for user training, user reading of uploaded data, and registration of other user data
Complex project involving several components. External software developers and healthcare providers participated. Product-service package proved technically difficult to manage.
SecondOne
Huge technical and commercial success.
Technical and commercial success.
Technical and commercial success. Expansion of internal project to include external knowledge brokers produced useful suggestions, designs, and new manufacturing solutions. Technical and commercial success. Part of large-scale consortium of organizations. Knowledge originating in this project reused in other projects. Technical but not commercial success.
Neither technical nor commercial success.
Open Innovation Outcomes in a Medical Company What are the challenges when a company wants to facilitate an open innovation approach and how do individual project teams translate the concept into practice? To address this question, we collected data on 18 innovation projects in the device development department of a European medical company. Ten projects not focused on product development or not managed by the device development unit were excluded; we analyze the remaining eight projects here (see “Summary of Projects,” p. 39). Data collected via interviews with project managers and senior managers were triangulated with observations collected during periodic visits to the device development unit. One of the researchers had a desk at the company’s location for five months. The company, which operates globally, is a leading supplier of medicine and different types of medical equipment to end users. The company has for several years worked to improve its innovation approaches in different ways and to increase both the speed and quality of new product development. A number of supporting mechanisms and systems have been implemented to facilitate internal knowledge capture and sharing, idea collection, and cross-company communication related to innovation as well as open 40 | Research-Technology Management
innovation approaches. There is a need to “stimulate involvement in the assimilation effort across the organization” (Chesbrough and Crowther 2006, 234). Management concepts such as open innovation are not just assimilated or implemented once and for all (Christiansen and Varnes 2009). Changes in strategy, technologies, markets, and perceptions are part of the fluid context in which many companies operate, and all of these may influence a company’s approach to open innovation. In the medical company as a whole, and within the device development department responsible for the projects we studied, there are ongoing discussions about how to apply and benefit from the different practices within the open innovation concept. Four of the eight projects were considered both technically and commercial successful by the company, while four were technically successful but did not achieve commercial success (Table 2). One project is both a technical and commercial failure.1
1
For the purposes of this work, technical success means that a working device was produced. A commercial success is a product or service that was brought to market, made a profit, and remained on the market for at least three years.
Improving Design with Open Innovation
Open Innovation Practices Across Projects The eight projects we studied used a variety of open innovation approaches and practices (Table 3). Taken together, the projects illustrate the struggles that projects and companies face when trying to go outside of the closed innovation paradigm but also demonstrate how project teams are able to learn and test new approaches through the process. The device development department and the company support open innovation, as does the incentive system. Open innovation measures are integrated into the balanced scorecard for the department, and projects are measured on their application. Licenses and development agreements, both outcomes of open innovation approaches, also count on the unit’s balanced scorecard. Individual project teams are rewarded for milestone performance (quality and timely deliverables). Hence, the teams are rewarded if external collaborations improve quality or time performance. These elements would seem to motivate project teams to use open approaches. The fact that these factors were present in the company may have enabled success, but did not guarantee it, as illustrated by the different results attained by the various projects we studied. This suggests that a companywide focus on open innovation is not sufficient to spur adoption; rather, individual project managers will adopt an open strategy and incorporate it into their projects only when they realize the need. One project manager’s comment illustrates this:
The open innovation strategy was decided when I realized that we do not know everything about patient management. The project recognized the necessity to get help from someone who sits in a clinic and manages the patients, and in different parts of the world to obtain a global view.
However, not everything is decided by the project managers, as company policies provide guidelines for action and organizational structures for decision making, especially regarding the management of IP, for which the department has an established process. Each project is assigned to a group responsible for patent management that has a direct line to the senior patent management unit. The project teams do not control out-licensing or in-licensing. Decisions about inlicensing are made by senior management with input from the project team involved. A corporate business unit pursues out-licensing when appropriate, in collaboration with the department. Project teams do, however, map IP and related technologies. To understand the technologies and IP required, a technology mapping exercise is carried out for each project. This mapping follows a template, and the project mapping is related to a broader technology mapping exercise done for the whole device development unit on an annual basis. Observations Our data did not indicate that any one factor was more important than any other in explaining project success or
TABLE 3. Open innovation processes, structures, and practices RightOne SecondOne
EasyOne MemoryDevice TwoFold
Predictor DesignDevice PDA device
Y
Y
Y
Y
N
N
N
N
Organization structure and systems support external collaboration.
x
x
x
x
x
x
x
x
Reward and performance systems support open innovation.
x
x
x
x
x
x
x
Collaboration worked among units and actors.
x
x
x
x
x
x
x
Organization and project supported exchange and integration of knowledge and had needed absorptive capacity.
x
x
x
x
x
x
x
The project norms and culture supported the use of external knowledge.
x
x
x
x
x
x
x
The project applied technology scouting, watching, and mapping.
x
x
x
The project used a system or process for knowledge transfer.
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Commercial success? NETWORK
KNOWLEDGE FLOW
x
IP ISSUES Mechanisms and processes for transferring IP exist and are known to the project.
x
x
BUSINESS MODEL CREATION The existing business model of the company was modified to support open innovation approaches.
Improving Design with Open Innovation
x
x
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failure. Some of the factors are managed or settled on a company level, especially policies regarding IP, organizational support for open innovation, and reward and performance systems, while other factors are related to interpretation and action at the project level. The pattern is unclear, as both successful and unsuccessful projects share at least some interpretations and approaches for the identified factors. However, the projects might also be analyzed with respect to the type of collaboration engaged, the approaches used in collaborative efforts, and the structures and processes governing collaboration. A survey of the projects from this perspective shows that different types of collaboration can be pursued and executed differently, even within the same company and for related projects (Table 4). Most interestingly, the four successful projects applied different types of collaboration from the collaboration strategies used by the less successful ones. The successful projects used different forms of user involvement, external consultants, or vendors or engaged in searches for knowledge and solutions via intermediaries, but did not use partnerships or joint consortiums or collaborations with universities. The exception
is the DesignDevice project, which involved potential customers in the selection of features that customers could manage. Although that project was a technical success, limited market demand kept it from being completed. Three less successful projects did use some type of partnership or consortium as the organizing principle for collaboration. The TwoFold and Predictor projects were both technical successes that did not yield market successes; the Predictor project did produce results that have been reused in other projects. The PDA device failed due to technical issues that could not be resolved. The less successful projects also seem to have been the most exploratory ones. These were projects with high ambitions; the PDA device, for instance, sought not only to develop new solutions but also to integrate several different technologies into one device that was supposed to communicate with yet another new technology. The Predictor and TwoFold projects both tried to integrate a new measurement approach into a device that performed calculation, prediction, or optimization based on data collected by the device or gathered from other sources.
TABLE 4. Collaborative practices in the projects studied Type of collaboration
Project
Approach
Collaboration structure
User involvement
RightOne
Lead user involvement
Idea from lead user spotted in magazine by company manager; user was involved in design and test processes
DesignDevice
User involvement
Users involved in selection of features offered
SecondOne
External designer and partners
Partner used throughout project to supplement competencies related to measurement of bodily fluids; external designer used to develop container for the two technologies
EasyOne
Partnership with external supplier
External supplier used to overcome technical problem in device design
MemoryDevice
External consultant and online intermediary
Consultant used to identify collaborators and facilitate collaboration process with online intermediary
Engage external search via intermediaries
MemoryDevice
Online intermediary
Scientists and engineers associated with online intermediary produced solution to overcome a technical problem
Partner with complementary firm
TwoFold
Partnership with one company
Project manager organized the alliance to develop an idea from his team; partner was involved in all phases of the process
PDA device
Partnership with companies
Partners were used in preliminary phases to collect information about patient and user needs and in development and implementation of PDA and related features
Predictor
Participation in EU consortium–driven research project
Partners used as sources of knowledge and involved in development of shared technologies, e.g., prototypes
Predictor
Partnership with universities and hospitals
Partners used as source of knowledge and expertise to evaluate ideas and test prototypes in development phase
PDA device
Partnerships with hospitals
Partners used to test device and provide feedback to improve product design and related service system
Hire external consultant or vendor
Joint consortium and work with universities
Commercially successful projects indicated in italics. MemoryDevice and Predictor appear twice because these projects involved two different types of collaboration.
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Improving Design with Open Innovation
One might argue that the most exploratory project also needed the most open and exploratory approaches, searching for new knowledge and solutions in more complex collaborative interactions. Unfortunately, this approach also seems to be the most risky one, as it did not produce immediate technical or market results. However, these less successful projects have provided the company and the device department with intermediate technical knowledge that has provided valuable insight and been more successfully reused in other projects. Slowinski and Sagal’s (2010) Want/Find/Get/Manage model suggests steps to implement open innovation methods in a process that seems to be based on the assumption that it is possible to identify the needs, as well as all the steps required, to reach goals in a linear manner. But linear approaches are often a poor fit with the realities of innovation (Christiansen and Varnes 2008; Latour 1987). Chesbrough (2004) has noted this, pointing to the need for what he calls a “poker” approach—a flexible application of open innovation methods to accommodate the uncertainties around markets and technologies. Thus, rather than the typical linear unfreeze, change, and refreeze process of organizational change (Lewin 2009) that some have observed in studies on open-innovation implementation—as for example reported by Chiaroni, Chiesa, and Frattini (2010)—we found in the company’s device development unit a process that invoked creative combinations of available resources, approaches, and solutions adapted to the current need, applied as the innovation process unfolded, new questions arose, and the search for solutions reached a dead end. The challenge in this context is to build recognition and acceptance of the concept of open innovation across units; as Chesbrough has said, a company “can’t just create a center for open innovation and expect it to have a major impact” (Chesbrough and Euchner 2011, 15). Conclusion Complex management technologies like open innovation can connect and become connected to local practices in many ways. The goal of this analysis is not to evaluate whether or not the subject company followed a specific method; rather, we set out to investigate the various ways of applying the concept of open innovation as project managers and employees attempt to make sense of the concept and how this process of adaptation relates to project outcomes. The analysis offers two important findings. First, organizational factors seem to be indicative but not sufficient for success. Second, some open innovation practices seem to be more successful than others. For the eight projects we studied, all based in the same department, we can identify common processes for handling IP, organizational structures and incentive systems to support open innovation, and knowledge-sharing systems. Nevertheless, half the projects did not become commercially successful. Project characteristics, intrinsic challenges, management issues and bad luck seem to explain some of the problems. The open innovation practices, and especially the type of Improving Design with Open Innovation
We found a process that invoked creative combinations of available resources, approaches, and solutions adapted to the current need, applied as the innovation process unfolded.
collaboration structures used to facilitate the collection and integration of external ideas, seem to be somewhat related to how projects perform. Very open and exploratory collaborative arrangements in the form of joint consortiums and partnerships with other companies did not produce successes in our study. Collaborative arrangements that included some type of limited openness, such as user involvement or the use of external consultants and intermediaries produced the best outcomes in the projects we studied. Possibly, this relationship developed because these successful projects were more structured and easier to manage than the more ambitious and exploratory projects. Another explanation could be that the collaborative arrangements in the successful projects were better managed and guided, while the less successful projects were less focused in their approaches to collaboration. Third, partnerships and joint consortiums were implemented when there was a need for new radical solutions, and thus these projects represented high-risk challenges. A final possibility is that there could simply have been a lack of fortunate serendipities in the less successful projects, a possibility that cannot be discounted, as the sample is so small. Two lessons for managers can be derived from these observations. First, managers need to be concerned with open innovation on both the company and the project level. The application of open innovation in individual projects emerges from a mix of company structures, processes, and guidelines and project-specific choices. It’s not enough to have company guidelines or policies for open innovation when the application of individual practices happens on a project level. Second, managers might want to consider the selection of collaborative arrangements and the type of collaboration not on a company level, but for each project, as there might be some benefit from choosing an approach tailored to the desired results. Some approaches might be best for long-term exploration while others seem to facilitate the achievement of short-term objectives. The last might be especially true if the project can be considered or managed as well structured. We would like to thank the anonymous reviewers and the editors of Research-Technology Management for helpful comments and suggestions. References Bianchi, M., Cavaliere, A., Chiaroni, D., Frattini, F., and Chiesa, V. 2010. Organisational modes for open innovation in the bio-pharmaceutical industry: An exploratory analysis. Technovation 31(1): 22–33. March—April 2013
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Improving Design with Open Innovation
