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Henry Chesbrough: “Good ideas do not grow between the four walls of a company”

The “father” of the concept of open innovation explains that more and more companies understand that they must take the path of co-creation

The open innovation concept at Google in April 2003 yielded a result of only about 200 pages. The same search in April 2013 showed an exponential growth: more than 480 million pages appeared related to the concept.

The explosion of terminology in those ten years came from the hand of Henry Chesbrough, professor and director of the Garwood Center for Corporate Innovation of the University of Berkeley, who rose to fame in 2003 after writing Open Innovation: new imperatives for the creation and the use of technology, an essential book for the world of innovation that is currently more relevant than ever in the midst of the vertiginous path of digital transformation.

The great contribution of Chesbrough – considered the “father” of open innovation – was, in reality, to make companies understand that the best talent is not always the one who works inside the organization. “Good ideas no longer grow or mature between the four walls of companies,” says the academic.

Although he himself recognizes that his only contribution was to “put a label” on a series of concepts circulating a long time ago, his proposal -that the innovation of the companies should be nourished by ideas from abroad and, at the same time, let the own ideas transcend outwards – is very relevant in a world in which the biggest business disruptions are leveraged by emerging technologies.

The heart of its proposal offers an agile dynamic to adapt to changes, even for the most “traditional” companies, who look with equal interest and strangeness at the digital maelstrom, although Chesbrough points out that a change of culture is essential.

To illustrate this point explains that for years NASA relies on crowdsourcing for certain specific technological dilemmas. What they discovered over time are the effects of “identity crisis” that this produced in their engineers after seeing that people outside the aerospace world solved problems that they had worked on for a long time. “They had no choice but to transform culture towards openness, otherwise everything would get worse,” says the academic.

At the beginning of the decade of 2000, when the digital revolution was incipient, he coined the concept “open innovation”.

How has this changed since then?

In the past, innovation and R & D (research and development) processes were conceived as internal processes, which the company or the institution in question treasured and kept, the more secrets, the better. This model worked very well for a long time for many industries. With the amount of information that began to circulate with the technological revolution, this model was transformed. With all that information available, companies do not need to carry out these processes on their own. There are many paths by which ideas can arrive; The assumption behind open innovation is that there are many advantages in incorporating external ideas and technologies within the company, much more at a time when the major players are digital transformation, big data, blockchain and machine learning. In a scenario like this, companies have the imperative to constantly innovate, they must transform, and the available information becomes an important ally.

You also raise the benefit of the reverse process, how can it be profitable?

Some ideas can bear fruit within the organization, while it is necessary to allow internal technologies or ideas that do not do so to function outside, through licensing, sale of intellectual property or schemes as accelerators that can turn them into startups or new ones. business models. There is another possibility to innovate with own resources that can be monetized in a different way. What began as a marginal profit is today a huge business.

How do companies apply the concepts of open innovation in practice?

Companies such as Intel, Fujitsu, Enel, among others, are nourished by a huge amount of information that comes from outside the organization, have special programs and platforms through which they detect and collect ideas from different sources (startups, individuals, universities ). They build real ecosystems from where they leverage new product ideas and services. It is worth mentioning that startups are usually a source of innovation, unlike universities, which tend to focus on the invention. Universities are inventors rather than innovators because, although they discover many things, they do not usually market them and innovation implies bringing an idea to the market.

This vision raises a different view of the talent and place of the consumer, what relationship does this have with the digital?

Co-creation is particularly necessary in a digital market in which the place of the consumer is different, its role is another. On the other hand, there is a lot of value in putting technology at the service of the problems and needs of people. This model surrounds external talent companies because it does not mean that the best talent is always the one who works in the company. While closed innovation means having “the best” in the company and retaining them, open innovation proposes to have key people within the organization who can detect those valuable people outside who can bring knowledge to the business.

Taking into account the particularities of Latin American economies, how can an open innovation model contribute?

This model is especially useful for products that quickly become commodities, it gives companies air. By having external partners, they can share costs and benefits, exempting them from the pressure of costs to reach economies of scale and allowing them to be one step ahead of competitors. For all this, it is also very effective in times of crisis. On the other hand, Latin America is more connected to a raw material economy, and although it would seem that in these industries there is no innovation, if there is, with drones, for example, or the needs of more or less water in certain areas. ; also mining, sensors or developments that give information of the soils; There is a lot to develop there in collaboration with others. Also in the financial, payments, access to money, banking, there is much around this, taking into account the particularities of the region.

 

Photo by Diego PH on Unsplash


Also published on Medium.

Published inStartups

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