How ‘open innovation’ is helping big business think like a startup

Recently, I have seen examples emerging of what is being described as ‘open innovation’.

One of my favorite thought leaders, Harvard Business School legend Clayton Christensen, has written on the topic in the past and multinational food company Mondelez recently used an open innovation model to work with startups to develop solutions to some of its mobile marketing initiatives.

Open innovation is generally defined as a way to enable innovation through challenging third party companies/innovators to provide new solutions to large corporations. It is effectively crowdsourcing new innovation from outside an organisation as opposed to innovation being controlled within an organisation.

Open innovation is a direct outcome of how social media is maturing and settling as a central play in organisational R&D. It also provides a brilliant opportunity to bring small and big business together.

The Mobile Futures program run by Mondelez is a great example in which five brands – Philadelphia, Marvellous Creations, Cadbury Dairy Milk, Favourites and Belvita – invited pitches from Australian mobile startups to collaborate on new innovations with brand teams. Issue, Proximiti, Snaploader, Skyfii and MyShout were chosen and the results have been encouraging. You can read more here.

Christensen advises to be careful over defining and operating an open innovation model as there can be some blurring of definitions in relation to how the concept is applied in private enterprise environments as opposed to government enterprise scenarios.

There is precise innovation, which is clearly defined in the sense of a technical response. Then there is imprecise innovation that potentially becomes less effective when it involves changing business models. As with any new concept emerging in this disruptive world, terms and words get thrown around without specific definitions, which only serve to confuse matters.

But those companies seeking to utilize open innovation should keep their definitions clear. Organisations calling for open innovation contributions should do so with a clear brief of the challenges and the platform in which they will call out and manage third party talent to respond to it. Having a clear brief will serve to sharpen and focus the potential solutions to the problems being put forward.

Innovation itself is such an overused word now; I can see exactly why there would be some confusion when the term ‘open’ is affixed to it.

Putting that caution aside, open innovation presents a fabulous opportunity for startups and young tech talent to bring to life their input and ideas in the context of large organisations.

It has all the makings of a win-win situation; the large corporates are struggling to innovate and change in the face of disruption and the open innovation model potentially offers a solution to both sides. Just make sure that both sides of the open innovation equation are clear about what’s involved.

Fi Bendall is the managing director of Bendalls Group, a team of highly trained digital specialists, i-media subject matter experts and developers.