After a stimulating conversation with Jay Bal over at WMG (Warwick Uni) around open innovation, I have been thinking some more about the potential for small to medium sized enterprises (SMEs) to harness an open approach to product development and what this could mean for innovation.
There is evidence to suggest that significant benefit can be derived through opening up the product development process to external collaborators (Chesbrough, 2003). Open-source hardware development at MIT in conjunction with Nokia highlights some benefits of such an approach:
Nokia decided to work with MIT on open-source video decoders (among other open-source projects) because it realized that if all chip makers–even those that compete with Nokia’s suppliers–had access to decoder designs, Nokia could reduce development time overall and reap the benefits of potential innovation. (Greene , 2008)
Within the web services space adopting an open philosophy is a powerful option for new products entering a highly competitive, innovative and fast moving market. Twitter is a great example; it would be reasonable to argue that their decision to open up a – developer friendly – external API early on in the product lifecycle was in part responsible for the product’s huge growth. An eco-system emerged with external developers building all manner of additional products and services on top of Twitter, many which might well have been out-with the original scope and vision of Twitter’s design brief. This contributed to Twitter’s early innovation and quality.
A concept I have been mulling over and am calling ‘fuzzy interpretation’ might provide positive outcomes if an open and collaborative approach to product development is encouraged; it is the notion that new product ideas, enhancements and spin-offs could arise from others viewing, without the original teams constraints, the product design through a different lens, thus driving innovation (and potentially opening up new markets).
By posting designs online, hardware engineers have found a huge community of consumers and fellow professionals who are willing and able to provide feedback, and even to extend the designs in ways their creators hadn’t thought of. (Geene, 2008)
Another good example came with the release of Microsoft Kinect where a computer scientist was not interested in using the device to play games but instead to capture live 3-D images.
Mr. Kreylos is part of a crowd of programmers, roboticists and tinkerers who are getting the Kinect to do things it was not really meant to do. The attraction of the device is that it is outfitted with cameras, sensors and software that let it detect movement, depth, and the shape and position of the human body. http://www.nytimes.com/2010/11/22/technology/22hack.html?_r=1
Such is the power of ‘hacker’ innovation that Microsoft softened its approach to these developments and instead decided to harness the enthusiasm.
You can push this further with the assertion of Joy’s Law ‘No matter who you are, most of the smartest people work for someone else‘ and ‘… in any given sphere of activity most of the pertinent knowledge will reside outside the boundaries of any one organisation’ (Lakhani, Panetta 2007) and assuming these views warrants merit, the challenge for organisations, especially SMEs, is how to tap into the potential wealth of talent that will benefit their products yet which is not part of their immediate organisation.
This is of course a simplistic view and there are many caveats not least a required change in attitude towards ownership, patents and collaboration when intellectual property is involved. Also, it is much easier for a large corporation like Microsoft to ‘allow/encourage’ people to innovate on an existing product. However, I would like to explore in more detail what the potential is for smaller organisations who are in the process of building out their product/products.
Could opening up the product development phase early on, to those outside the organisation, provide real benefit in the form of enhanced innovation and opportunity and is it feasible to do this while still maintaining a commercial focus for the business?
There are many exciting initiatives happening now such as the Open Design City in Berlin combined with what feels like a changing economic and social climate – it is a good time to explore what can be gained from increased openness and enhanced collaboration, perhaps working towards a new, sustainable, model which allows businesses to still grow as businesses while sharing in, and promoting, the potentially rich innovation which external collaboration could offer.
Chesbrough, H.W. (2003). Open Innovation: The new imperative for creating and profiting from technology. Boston: Harvard Business School Press
Greene, Kate (2008). Open Up and Say Eureka. Technology Review, MIT November/December 2008 http://www.technologyreview.com/article/21495/
Lakhani, Karim R. and Panetta, Jill A., The Principles of Distributed Innovation. Innovations: Technology, Governance, Globalization Summer, Vol. 2, No. 3, 2007; The Berkman Center for Internet and Society Research Paper No. 2007-7. Available at SSRN: http://ssrn.com/abstract=1021034