At a recent major convention on innovation, I got into a discussion with Henry Chesbrough, author of "Open Innovation" (http://www.amazon.com/Open-Innovation-Imperative-Profiting-Technology/dp/1578518377) and general innovation rock star (http://www.haas.berkeley.edu/faculty/chesbrough.html). We discussed management fads and recognizing how the idea of Open Innovation echoes an older fad on Benchmarking...both involve getting ideas from other companies. Open Innovation is hot now; Benchmarking is a mature technique with well understood strengths and limitations. While requests for Henry to speak are clearly rising rapidly now, where is Open Innovation as a management fad?
We borrowed Gartner's Hype Cycle model to make some comparisons (http://gsb.haifa.ac.il/~sheizaf/ecommerce/GartnerHypeCycle.html). This model is used to describe IT approaches, like business intelligence and customer relationship management. It says that each technology goes through several distinct phases, here in abbreviated form:
1. Early Adoption, who try out the technology and prove that it can really do something. These early adopters them become the poster children and get lots of publicity. This leads to...
2. Maximum Hype, in which the fad seems to be everywhere and can solve virtually all problems. Press coverage is intense, consultants pop out of nowhere, and everyone is talking about it. This leads to...
3. Unmet Expectations, in which people trying out the technology find it fails to meet all the claims during the period of maximum hype. Disillusionment and bad press crush the technology into the background. This leads to...
4. Maturation, in which people quietly find the strengths and limitations of the technology and use it to solve real business problems. It works its way into the way things are done.
Henry and I both agreed that Open Innovation was in the earlier phases. He leaned more towards early adoption, "Open Innovation is just at its beginning phase." I thought it was approaching the period of maximum hype, "It is hard to imagine more press coverage and accolades." P&G is definitely an early adopter, and has been on the speaking circuit for a while now. It seems to me that their success is going to limit the success of later consumer products companies that try the techique. P&G is already prospecting the world for great consumer products ideas using Open Innovation, and has undoubtedly found many of the good ideas. Perhaps the vein has been mined.
Henry was less sure. But he pointed out that P&G's version of Open Innovation is only one of three parts: they focus on getting ideas from other companies. Nobody has really mastered taking one's own ideas and putting them out to others, nor have true markets really emerged for the exchange of ideas. Both of these aspects of Open Innovation remain in the Early Adoption phase.
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