Tools for Open Innovation

Shift research and development efforts to an open innovation framework to capture and capitalize on valuable ideas from customers and other stakeholders.

Have you ever used an app to visualize a different color of paint on your living room walls or new fixtures in your master bathroom? Or, perhaps, you have cleaned your floors using a Swiffer mop or controlled the temperature of your home using a Nest thermostat. If so, you have used and benefited from products that are the result of open innovation.

The term open innovation (OI) was coined by Henry Chesbrough in 2003 (1) and stands in contrast to closed innovation. In a closed innovation system, corporations maintain large and sophisticated research and development (R&D) departments that deliver improved products in a vertically integrated business. Open innovation, on the other hand, acknowledges that good ideas come from both internal and external sources, and successful business models horizontally integrate suppliers, vendors, distributors, and even competitors.

In an OI framework, sources of innovation include universities, startups, nonprofits, government agencies, and customers, all of which are key resources for identifying new concepts. Customers may not be able to succinctly describe their problems and posit solutions, but observing customer behavior can help businesses identify their unarticulated needs. Understanding the customer is at the heart of design thinking (DT) — an OI technique used to capture and develop ideas from customers.

In the first step of the DT process (Figure 1), R&D teams discover customer problems and define customer needs. In the next step, an innovation team, including internal and external stakeholders, solves the problem by creating and evaluating solutions for the identified problem. It is especially important during the create stage to maintain empathy with the customer. Consider the pain points and challenges associated with their current situation, their level of frustration with the problem, and how valuable an alternative approach would be to them.

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▲Figure 1. Design thinking (DT) is an iterative process that helps companies to identify and solve customer problems.

During the solve phase of DT, the innovation team solicits customer feedback to evaluate the proposed solutions. A key tool at this stage is rapid prototyping, which produces a minimally viable product — a bare-bones, tangible product presented to potential customers for their feedback. R&D teams use this critical information to further refine the definition of the problem and inform concept development. Thus, customer inputs are a key aspect of DT and OI in general...