Open innovation, which involves knowledge sharing and collaboration beyond a company’s four walls, has proven to help organizations externally source ideas and forge fruitful partnerships with others. In times of disruption, open innovation can help organizations to find new ways of working that make the business more resilient and responsive to customers (commonly known as operational innovation) or to develop new products and services that are feasible within existing constraints (product/service innovation). Even in relatively unchallenging times, open innovation can be a source of both iterative improvements and large, transformative breakthroughs.
The enduring promise of open innovation is to get work done faster, cheaper, and with better ideas. Unfortunately, many organizations struggle to build a culture that is receptive to this approach. After reviewing some of the most common sources of resistance to open innovation, this article highlights three practices that will help your organization build a culture where open innovation can flourish.
Identifying internal resistance to open innovation
Internal resistance to open innovation can come from diverse sources. For example:
- Organizations operating in highly controlled environments, including those focused on Lean management and Six Sigma, may be more comfortable with rigidly standardized processes versus flexibility that is needed for open innovation.
- The performance measures on which employees, managers, or leaders are assessed might actively mitigate against open innovation. For example, employees will be less likely to collaborate if they are measured on the number of unique patents they file.
- Organizations that do not actively incentivize open innovation through rewards and recognition may struggle to engage employees.
- Many organizations suffer from “not invented here” syndrome: The belief that the only innovations worth pursuing are those developed internally.
Each of these challenges can lead to active resistance to open innovation, or at the least, dampen the kind of engagement that organizations really need to move the needle on open innovation.
It is important to note that many of the factors that derail open innovation—including the challenges above—are cultural challenges. To break down resistance, it is thus important to understand what an innovative culture looks like. In a webinar hosted by APQC, Scott Anthony, senior partner at innovation consulting firm Innosight, said that innovators share five key qualities. They are:
- Customer obsessed
- Adept in ambiguity, and
Below, we identify and discuss three drivers of culture that help to encourage these innovative qualities and break down the systems and habits that work against them.
Fostering an innovative, solutions-focused culture
If increasing open innovation is a goal that organizations wish to strive toward, leaders need to actively create the conditions that allow it to flourish. To build and sustain this type of culture, organizations should:
- Equip leaders at all levels to manage and lead the change
- Reward employees based on desired behaviors that align with open innovation, and
- Plan events to engage employees in open innovation.
Equip leaders at all levels to manage and lead change
Senior organizational leaders like executives are highly visible to employees and can make or break culture change initiatives. Leaders help to drive organizational culture not only by modeling desired behaviors and setting the tone from the top, but also by communicating the importance of cultural shifts (like a shift toward open innovation) in a visible way across the enterprise.
To enable leaders at all levels to fulfill these roles, it is important to provide them with appropriate tools and resources. For example, busy executives benefit from help with strategic, enterprise-wide communications and practical steps for how to lead by example. Middle managers are also involved in communication, but play a more active role in coaching, mentoring, and guiding staff through the change. For that reason, they need tools and resources that allow them to explain what the change to adopting open innovation means to their teams, listen to employee feedback about pain points related to change, and track progress to make sure that change sticks.
Reward employees based on desired behaviors
An organization’s reward practices communicate important messages about what the organization truly values. When they are aligned with an organization’s strategy and goals, rewards are an effective way to drive the kinds of behaviors that an organization wants to promote, including those that foster a culture of open innovation.
Organizations tend to use a variety of formal and informal methods to recognize contributors for their idea submissions. For example, rewards can take the form of gift cards, employee awards, monetary bonuses, a flattering email to an employee’s boss, mentoring and professional development opportunities, and time to work on innovative projects of interest.
Whatever rewards look like, APQC recommends designing a transparent rewards structure with consistent standards that reflect the organization’s goals for open innovation. These rewards should focus not only on the quantity but also on the quality of deliverables. Although it may be easier to reward innovation outputs rather than collaboration, discovery, and developmental work, measures of active engagement in knowledge sharing may help reveal the biggest contributors and heavy lifters that feed the innovation pipeline.
Plan events to engage employees in open innovation
Organizations can also foster a culture of open innovation by designing events that create a sense of community, provide networking and skills development opportunities, and reward participation. These events commonly take the form of pitch competitions, problem-solving contests, deep-dive events, and even multiorganization hackathons where credible ideas have a plausible chance of being adopted/incorporated. These events help to create a sense of urgency and community that generates excitement about open innovation.
No one can predict what the future will bring, but one thing we know for sure is that organizations benefit when they collaborate with external partners. Open innovation not only generates fresh ideas and new approaches, but also helps to forge partnerships and networks that come in very handy when disruption happens. With support from leaders, meaningful rewards, and opportunities for employees to engage, any organization can begin building a culture that supports an open innovation approach.