On my LinkedIn ‘News Feed’ I recently saw a post which highlighted that Uber was now the leading taxi firm in the world and AirBnB the leading hotelier. What links these two companies is that, despite their dominance in their respective industries, neither have any ‘real-estate’.
AirBnB doesn’t own any apartments and Uber doesn’t own any cars, yet if I were arranging a holiday tomorrow, they’d be two platforms that I’d be relying on.
The fact that Uber and AirBnB have been able to conquer their respective markets in such a short period of time, shows that new approaches to business are starting to be more efficient than those normally used by more traditional players.
In order to abate the rise of these new companies, some traditional organisations have started to take an ‘if you can’t beat them, join them’ approach.
Open Innovation, a process where companies, many of whom might be rivals, share information with one another to improve their fortunes, has been used by companies like Microsoft, Telefonica and Shell.
It’s a concept which still doesn’t sit well with many senior executives. By definition, a company that shares its ‘secrets’ is running the risk of that information getting into the wrong hands. This is shortsighted however, in the ‘We Economy’ companies aren’t single entities, they’re part of a wider ecosystem which fluctuates quickly, and on a regular basis.
One of the critical aspects of Open Innovation is finding a partner that can actually benefit your company. It’s also not confined to other companies - Open Innovation initiatives put companies in touch with research institutes, universities, and even the public.
A good example of this was when the coffeeshop chain, Starbucks, invited its customers to contribute directly to their wellbeing with its ‘My Starbucks Idea’. The programme attracted 150,000 ideas, with 277 actually being put into action.
When finding an Open Innovation partner it’s important that a company has a long-term vision, but that its short to mid-term goals are malleable. This allows the organization to work towards a goal, but at the same time, adapt the way they’re going to get there so that any new ideas inspired by your partners have the room to flourish.
The next step for organizations is to think about developing and piloting ideas to see if there’s a correlation between the initiative and the company's business goals. Once the foundation of this has settled, the final phase, deployment, can take place.
At the deployment phase, companies must take stock of the partnership and see whether collaboration is having a positive effect on them. Technology integration, change management, and any other training initiatives should be implemented here as the company attempts to take advantage of all it’s learnt.
The biggest advantage of Open Innovation is its capacity to speed up idea creation - and the extent to which companies can execute their ideas. Due to this, it’s important that companies look past the ‘we’re going to lose our competitive advantages if we divulge to our competitors’ stance, and understand that everybody’s future looks better within an ecosystem.