Why Open Innovation Matters

by Stefan Lindegaard

A few weeks back someone told me an interesting story about Procter & Gamble and their competitors. It is well-known that P&G is the open innovation champion and their long focus on open innovation has given them an important advantage.

They get to see interesting proposals within their business areas before their competitors. In the story I heard, one of P&G competitors complained they only saw ideas and proposals that P&G already had rejected. Ouch, talk about being a second-tier choice...

This leads to a very important point on open innovation for market leading companies and those aspiring to be. The key game is to become the preferred partner of choice.

A preferred partner of choice simply gets to see the best ideas first and such a position can help a company out-innovate their competitors and develop substantial long term overall business advantages.

As each industry only has one - or perhaps two - winners in this game, companies should begin to focus harder on their open innovation strategy and efforts. It becomes even more important as this positioning game already plays out in many industries. Let me give you a couple of examples.

Mobile phones: Apple and Nokia seem to have taken the lead here. I do not see much open innovation activity from Motorola, Samsung, HTC and the other players.

Software: IBM, SAP and Intuit are doing great things here. I acknowledge that software is a very broad business category that can be divided into smaller segments. Nevertheless, these are the companies I hear about on open innovation. What about the many other companies?

Technology: Cisco seems to build momentum over their direct competitors HP, Alcatel-Lucent and Juniper Networks.

Companies should have in mind that this game is very much about perception. A company starts an open innovation-like initiative and if they get some success they are encouraged to continue down this path. This is picked up by bloggers and others in the open innovation community and the word quickly spreads that a certain company is doing interesting things.

This spreads just as fast in the industry of the given company resulting in two things; internally the company gains even more momentum on their open innovation efforts and externally the company is perceived as an open innovation leader within the given industry.

Voila, the company is on its way to claim a preferred partner status and if they do not mess up they can soon reap the benefits of this.

I think this provides another example of why companies need to wake up with regards to open innovation. Your thoughts?

---

Stefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation.

Battle for Mobile Dominance Escalates

Lest anyone thought that Apple and Google's latest assaults on Nokia's dominance in the mobile space would go unchallenged, news came out today that Nokia is acquiring the rest of Symbian that it did not already own.

This would be interesting news by itself, but Nokia, recognizing that its future as a handset manufacturer is at risk ratcheted up the competition at the same time.

How are they doing this?

By making the bold and correct move of making Symbian instantly the largest open source mobile platform through its transfer to an entity called the Symbian Foundation. Nokia really has no other choice but to make this move. RIM is evolving to become a more capable competitor, PALM and Motorola are both making their last ditch efforts to save themselves, Samsung and HTC continue to gather strength, Apple is opening up and poised to gain significant share, and Google has already launched an open source platform.

So who stands to lose the most as a result of Nokia's move?

Probably Google...

Google launched the android platform to try and ensure their search advertising dominance moves from the desktop/laptop world into the mobile world. Developers looking for an open source solution for their applications (corporate or otherwise) are more likely to choose a more robust and widely adopted OS like Symbian now that they have the choice.

And also Microsoft...

Windows Mobile has the advantage of trying to pair with Windows Live and Windows Vista, but with open source Symbian on one side and Apple on the other, Microsoft may end up stuck in the middle. Not quite as a elegant as the Apple offering, and more expensive and closed than the Symbian offering. Now of course Linux hasn't overtaken Windows in the PC market, but the mobile market is more of a green field and people are still defining their expectations of a mobile OS. Unfortunately this environment favors Symbian and Apple.

Which of those two will win the race, remains to be seen...

What do you think?