Open Innovation: Shift Happens

I'm finding some fairly substantial differences in how consumer packaged goods companies currently practice open innovation (OI) versus even a few short years ago. First, allow me to assert what hasn't changed: as before, OI today is about cultivating external resources that have the necessary credentials and capabilities to merit serious consideration by large corporations. External providers lacking these prerequisites will continue to remain on the outside looking in. Qualifications still matter a great deal.

So, what has changed? Most significantly, more, deliberate, external focused activity is occurring. The observed changes reflect increasing corporate familiarity with OI (including its strengths and limitations), experience with it (including some early wins) and importantly, comfort with it as a tool that they can employ to address their product development challenges. Management's view of OI is shifting such that it is being considered more of an everyday type of activity. This versus something companies reserve for special occasions when their internal resources hit a figurative developmental wall and need to identify a technical solution in order to continue to make progress.

So, what are some of the key differences between corporate OI practices now and a few years ago?

Many mid sized and larger companies now have staffed external innovation/scouting operations to facilitate their OI initiatives. Some are directly linked to SBUs, while others are centralized. Whatever the setup, companies are committing resources to OI, which means that they now have a more defined stake in its success.

External is now regularly being employed as a program support option, particularly in situations where internal capabilities are not aligned with the mission (e.g. the product need requires skills outside of internal core competencies). Companies are now committing to projects requiring external sourcing and development. It is no longer just a half-hearted effort, a box-checking exercise intended to satisfy management questions of whether "we have considered external options."

Companies that practice OI now have a stronger bias for action. They actively seek a limited number of solid and viable external solution options from which they can decide and move forward. While choices of external resources are understandably serious and not without risk, there isn't the same type of figurative "hand wringing" that used to be associated with making decisons involving use of external options. Net, as expected, OI is being elevated to a level where it is another option in the corporate product development playbook and is being managed by corporations as such.

I invite you to share your perceptions with me. How do your experiences compare?

"Connecting You With The Right Solutions" BFS Innovations, Inc.

Since 2005, BFS Innovations has helped its Fortune 500 clients with technology scouting, new business creation and development services. Contact Michael today at This email address is being protected from spambots. You need JavaScript enabled to view it. or at 614 937-2408 to discuss your company's needs.