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April 6, 2004
The open innovation frontier
Posted by Leslie Martinich
We’ve had a lot of postings recently on the topic of creativity, and I’d like to jump back to the topic of Open Innovation. Henry Chesbrough in his book Open Innovation talks about the link between the length of Development Cycles and the willingness (or lack thereof) of firms to adopt a more open approach to innovation.
I think it is illuminating to consider another axis: the length of Product Life Cycles. There are products with a short development cycle and a short life cycle, such as music videos. And there are products with a short development cycle and a long life cycle, such as Hula Hoops and Barbie dolls (this is the quadrant we’d like to be in!!!) And there are products with long development and long life cycles, such as rocket engines and pharmaceuticals. The tough quadrant to be in is that with long development cycles and short life cycles.
I’ve provided a simple illustration:
Consider the characteristics of the Long-Long quadrant. These firms need to build in processes and procedures that will encourage employees to hang around long enough to support their products, both through the development and through the support of the product’s life. So this is where we find pension plans, lots of training, expectations that employees will build their entire careers within the firm.
Contrast that to creating music videos or films. The team is made up of contractors thrown together for a quick product development. Most contributors are not even considered employees. So of course there is significantly more human interaction and idea sharing among product teams.
Clearly those on the lower left quadrant of the graph are more likely to use some forms of open innovation, while those on the upper right are most resistant.
I’ve drawn a jagged red line, which I believe is advancing upwards and to the right. That’s the open innovation frontier.
I expect that we’ll see a fairly rapid advance of that frontier, and I’ll be commenting on examples from the “long-long” industries as I find them.
Comments (5)
| Category: Henry Chesbrough | Open Innovation
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1. Tom Good on April 14, 2004 2:33 PM writes...
Films are an odd case. Though the shooting time for a film might be short (a matter of weeks), the complete start-to-finish development time from initial concept to theatrical release can take years. And for at least some films, the product life cycle can be very long. People still watch "Casablanca" for example. But more and more, new films succeed or fail based on their opening weekend, so in that sense their "effective" product life cycle can be very short indeed.
Permalink to Comment2. Leslie Martinich on April 14, 2004 2:44 PM writes...
I agree with Tom that films are an odd case. And many instances of a given product type will certainly fall outside the norm.
I provided the graph simply to give a way of thinking about various industries IN GENERAL. I have found that WAY of thinking about industries to be useful for understanding a variety of phenomena, and resistance to open innovation certainly lends itself to that sort of categorization.
Permalink to Comment3. Tom Good on April 15, 2004 12:24 PM writes...
I agree that in terms of general principles the graph is a useful tool. It is the type of thing that seems "obvious" after someone else points it out, but I had not thought about it until reading this article.
Permalink to Comment4. Sachin Mulay on April 28, 2004 5:29 AM writes...
Interesting model. Would like to see a representation of the graph more for the hi-tech industry - comouter systems, MFP's, Set-TOP-Boxes, DTV, Home Gateway products.
This would be useful to explain the 'Open Innovation' model to the Hi_tech Industry.
Interestingly we had come up our positioning of Extended Engineering services to our customers and shared the model with Prof Chesbrough. He mentioned that it was similar what he has been saying in his research that companies should open their R&D closet to niche partners.
Permalink to Comment5. Robin Large on August 24, 2004 2:44 AM writes...
It may also be worth considering the effct that public accountability has on the willingness to adopt open innovation. it is very difficult to persuade shareholders of the value of something they cant, see, touch and demonstrate - let alone something that may never exist anyway? The only effective way i see of 'selling' the approach to the shareholder is to offer the idea that at least all the eggs are not in one basket and changing course mid research is liklely cheaper?
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