You may wish to pop on over to IdeaFlow to check out a couple of HBS-inspired pieces about innovation. In particular, Renee Hopkins has posted a three-part interview with Henry Chesbrough, author of the just-published “Open Innovation: The New Imperative For Creating And Profiting From Technology” – a book primarily about (or so it seems) “operating in a world of abundant knowledge, where “not all the smart people work for you”, so you better go find them, connect to them, and build upon what they can do.”
IdeaFlow: Can you talk a little about the distinction between more innovation and better innovation?
HC: I think of “more” as a quantity. I think of “better” as a quality of something. In this case, better innovation enables people to solve problems that are important to them. In business terms, these solutions are worth more to the consumer than they cost to provide, so the consumer is willing to pay what it costs for the solution, and gets more value than they pay in return. Better innovation not only enables people to do their tasks faster or easier, at its best it can enable people to do new tasks.
IdeaFlow: So the calls for “more” innovation miss the point somewhat?
HC: Well, I think that these calls are based on the notion that you can’t keep cutting, keep shrinking, and keep laying off people, and restore prosperity to the company. You DO need to staunch the bleeding, but then you need to find new ways to grow. And the mindset for cutting and the damage it causes can get in the way of finding new ways to grow. A lot of research shows that most innovative ideas come bottom up from within the organization, rather than top-down. An organization that has been cutting expenses and reducing innovation spending is simultaneously damaging the information networks that will generate the next new things.
IdeaFlow: I was really intrigued by your distinctions between Open Innovation and Closed Innovation.
HC: Yes, innovation is not all the same. This distinction between open and closed innovation is at the heart of the book. Closed Innovation is fundamentally about scarcity of useful knowledge. In order to do anything, you have to do everything. It is inwardly focused, and deeply vertically integrated. It takes little or no notice of external knowledge and resources. Open Innovation is fundamentally about operating in a world of abundant knowledge, where “not all the smart people work for you”, so you better go find them, connect to them, and build upon what they can do. It seeks ways to build upon and leverage external knowledge, and focuses internal activities upon filling in the gaps, and integrating internal and external knowledge into useful systems.