Open innovation: progress through collaboration

Open innovation: progress through collaboration

 

Open innovation: progress through collaboration

Open innovation ecosystems of innovation are becoming more complex and diverse. Technology connects people and companies from different sectors of the economy, and the conditions in which innovators operate are more favorable than ever before, everywhere and for everyone. Against the background of the desire of organizations to maintain a competitive advantage + the need for a constant increase in the intensity of innovation seems to become more and more urgent. In the current conditions, organizations need to use external factors in innovation processes.

Changing approaches to innovation

Long gone are the days when innovative activities in organizations were carried out exclusively by their full-time and often isolated research units. While more traditional partners may still be the source of relevant knowledge and technology, the latter is increasingly emerging in a new capacity. Increasingly, innovation partners include start-ups and high-growth companies, consumers, and non-profit organizations. Such partners can work in related industries or in different unrelated sectors, which is increasingly happening in the field of innovation based on new technologies, which requires highly specialized knowledge. In addition, ideas, innovations, and technologies can be jointly created by different participants in the value chain, as well as developed in group forums or innovation competitions. In theory, all this is good if the goal is to expand the boundaries of the possible. However, not all “open” approaches to innovation are successful. Effective innovation requires clear design and proper implementation of appropriate strategies, as well as discipline, effective leadership, and a truly innovative atmosphere; this requires skilled people, tools, experience, and time. It is therefore not surprising that while many companies recognize the importance of innovation to their businesses, only a few claim to be satisfied with the results of their innovation. Although organizations put different meanings into the concept of "open innovation", it is almost always based on the same main idea and the realization that knowledge should not just gather dust on the shelves of individual organizations, but spread in all directions within companies, economy, and society.

Open innovation: progress through collaboration

The concept of "open innovation": can it be interpreted in different ways?

According to some experts, the process of "open innovation" has been going on for decades, and the fact that companies work with third-party partners is nothing new. On the other hand, it is clear that while companies in different sectors seek to innovate through collaboration with a wider and more diverse range of partners, they are also trying to make such collaboration more open and flexible to provide quick access to new ideas and technologies. The set of models of innovation can be viewed as a spectrum, on one pole of which there are “closed innovations” (companies develop new products on their own), and on the other - a kind of “free innovation” (there is a free exchange of ideas and information without any restrictions on their use). Between these two poles lies a wide range of approaches to innovation that involve varying levels of collaboration, structural flexibility, and openness to third parties. Over time, the term "open innovation" has embraced several different ways to improve efficiency, leverage new technologies, and empower organizations to get their hands on a variety of ideas from a variety of sources.

Analysis of different approaches to innovation

Herbert Smith Freehills Attorneys at Law examines the measures companies, and in particular, their in-house lawyers, are taking to realize the opportunities and challenges of collaborative innovation. Our conclusions were a real discovery. In particular, we found out that: Many companies seek to tap the creativity of the general public through initiatives such as online tournaments, contests, and hackathons that provide them with fresh ideas by identifying potential innovation partners with diverse skills. Almost all of our interlocutors reported on the expansion of the circle of their external partners. In some cases, the goal of cooperation was an intensive exchange of non-core assets with competitors, as well as going beyond the traditional areas of the company's activities and creating a more diverse portfolio of proprietary technologies in various fields. In some cases, external startups become participants in such cooperation projects, which are first created by the parent company and then integrated into it after they succeed. Another option is to provide such startups with autonomous status. In some cases, the creation of intra-organizational "start-ups" is encouraged, and their best achievements are adopted by the company. Several companies strive to ensure that absolutely any of their divisions can become part of the innovation cycle. In this case, the use of technological platforms, such as an intranet, makes it possible to involve any employee of the company in the relevant processes. There is also evidence that many companies are interested in moving towards common platforms. At the same time, companies operating in certain sectors of the economy felt more limited in opportunities for development due to the regulation of these sectors and often created start-ups and independent structures to innovate with fewer restrictions, and then used successful innovations within the parent company in such a way. in a way that suits regulators. It is no less obvious that although organizations put different meanings into the concept of "open innovation", it is almost always based on the same main idea and the realization that knowledge should not only gather dust on the shelves of individual organizations, but spread throughout all directions within companies, economies, and society. By using a variety of ways to gain access to internal and external knowledge, organizations gain the ability to draw on large amounts of information, forming a broader set of ideas and solutions.

"Building material" for cooperation

Many companies are becoming more receptive to new forms of collaboration to maintain a competitive edge or at least keep up with the competition. In this regard, they strive to base their respective processes and structures on the following fundamental principles: responsiveness, flexibility, trust, professionalism, and diversity.

Promptness

Companies emphasized the importance of leadership in go-to-market issues: if collaboration is slow, it loses its value. In the race to innovate, being first or one of the first is a huge advantage. This commercial factor directs organizations not to impeccability, but efficiency, even if this increases the risks associated with the implementation of an initiative.

Flexibility

The main task is to “optimize innovation”. As is the case with any other project, at the first stages of its implementation it is not clear whether it will be able to gain the necessary momentum and attract interest. Therefore, it is important to be flexible to get the maximum benefit from cooperation. In addition, companies need to exercise caution to strengthen collaboration. Not every project gets the green light in the end, and taking a more flexible approach helps companies avoid spending time on detailed initiatives that may or may not come to fruition. To solve this problem, many suggest taking a phased approach to new projects. Presence of an initially clear idea of the starting positions for the main parameters of the project,

Trust

According to companies, one of the main factors in the implementation of innovative projects is whether you see other people as competitors or as partners; depending on this, the project will be implemented in the spirit of either cooperation or competition.

You need to be more clear, open, and clear about your goals and intentions. Collaborators need to “speak the same language”. You should act quickly, but at the same time strive to maintain good relations with partners for the long term.

Professionalism and diversity

The struggle to attract the best talent is becoming ever more acute as talent is a key element in encouraging intra-organizational innovation and creativity. In addition, there are generally recognized advantages associated with the diversity of the company's workforce, which allows for the development of innovative activities based on the widest possible range of ideas, opinions, and skills.

Structural factors and problems

Obstacles to Optimal Project Structuring

While recognizing the importance of all of the above factors, one should nevertheless point out the need to make decisions on the structural features of each cooperation project; Since there are no “one size fits all” standard solutions, ultimately every project needs some kind of structural solution. Challenges in choosing the optimal project structure can include cooperation with scientific organizations, in the context of which conflicts of interests and priorities may arise; approaches and features inherent in different jurisdictions and branches; balancing profitability and philanthropy through social entrepreneurship, and the need to comply with regulations in highly regulated sectors. Given the above, startups and newly formed companies may be more positive about the idea of open innovation compared to more mature companies, which may be closer to strategic approaches focused on consistency and efficiency. Intellectual property is essential for the capitalization of many companies. However, the practice of using and evaluating IP is changing: it is increasingly being used to foster cooperation.

Ownership

The receptiveness of startups and startups to open innovation ideas may be at least in part due to their particular views on IP ownership. Companies have informed us that while traditionally the focus has been on innovation product ownership and protection, they are increasingly taking a flexible approach to provide access to technology through collaborative mechanisms. This does not mean that ownership of anything loses its meaning: on the contrary, today intellectual property is more important than ever for the capitalization of many companies. However, the practice of using and evaluating IP is changing: it is increasingly being used not to prevent other players from entering the market, but to facilitate cooperation through access mechanisms ranging from licensing agreements to open platforms. source code.

Role of in-house lawyers

The key to the success of innovation is the alignment of the legal department with the objectives of the company. To achieve this, some firms have adopted approaches that integrate the functions of lawyers into the innovation process so that in-house lawyers are involved from the outset. This allows for the mutual alignment of commercial and legal factors, as well as for early identification of legal problems and risks. Regardless of which approach is ultimately adopted, it is clear that, at least in theory, most companies realize that engaging a team of lawyers in the implementation of innovative projects early in the process allows them to maximize their constructive contribution to the relevant work and become part of the final decision.

The future of open innovation

While there are some inherent problems with open innovation, companies are realizing its important benefits, which in most cases outweigh the risks associated with restrictive self-reliant R&D approaches. The circle of external partners cooperating with companies is growing, as is the intensity of joint use of non-core assets, which, in turn, creates favorable conditions for the development of more and more diverse technologies. In many cases, collaboration with external partners is seen as one of the key factors in achieving high rates of innovation. In some cases, it may be advisable for a company to sacrifice exclusive rights and property rights to be the first to bring an innovative solution to the market, or simply to keep up with the rest of the companies operating in a particular sector. The concept of self-reliance is also becoming more and more popular, i.e. Using not only R&D staff and external R&D consultants to generate new ideas, but also employees from other departments of the company. In most cases, companies treat their employees as an as yet untapped potential reserve, realizing that they know the company's business from the inside and are capable of developing innovative solutions. Therefore, companies are investing in creating systems that will ensure that the potential of innovators within the company is paired with the appropriate knowledge, mechanisms, and capabilities that would allow them to develop ideas that arise in them. With a rapidly expanding range of innovation and collaboration opportunities for companies, as well as a range of internal and external innovators and partners, in-house lawyers must adapt to these new realities. For many legal departments, open innovation is a completely new field of activity, which affects the way they operate, as well as their composition. Risk models need to reflect the emerging collaborative landscape, challenging established norms and procedures. The process is not always smooth, and companies continually report the challenges of moving from tighter and more conceptually focused approaches to strategies that provide fast and flexible solutions to emerging problems and are built on trust, now seen as a key driver of effective innovation and collaboration.