Open Innovation was not included in the discussion of types of innovation because it is not a type of innovation but rather a method for managing all types of innovations.

From The Author

“Most innovations fail. And companies that don’t innovate die. . . In today’s world, where the only constant is change, the task of managing innovation is vital for companies of every size in every industry. Innovation is vital to sustain and advance companies’ current businesses; it is critical to growing new businesses. It is also a very difficult process to manage” (Chesbrough, 1).

Discovery

The authors propose that firms should pursue ideas that are created both internally and externally. To transition from a closed innovation model (a model where all ideas are developed internally) to an open innovation model the authors propose that a company:

• Create an Innovation Roadmap: Develop a roadmap that details your future R&D projects.
• Fill the Gaps: Identify the gaps in your roadmap where a product is needed to maintain sales and momentum in the market.
• Identify Blind Spots: Where does your business model focus your innovation efforts on? Identify those areas that you are not focused on due to the dominant logic of your business.
• Set up an SAB: Set up a Scientific Advisory Board (SAB). The SAB should be involved in the discussions surrounding the company’s technology roadmap and business model.
• Look to External Technologies: Look for external technologies that can be licensed into the company. Do not treat licensing as solely a legal matter, “there are vital business issues that licensing can influence and [the company] can not delegate these issues to [its] legal staff” (Chesbrough, 1). Look for external research that can be funded by the company. Offer a reward to anyone who identifies an external technology that the company decides to use.
• Fund New Ventures: Consider funding new start up ventures that are in markets that you may not choose to participate in.
• Invest in R&D: Invest in internal R&D but have a closer link between “research” and “development”.

Evaluation & Elaboration

The authors propose that firms should pursue both internal and external paths to market. They propose that internal ideas can be brought to market through external channels and external ideas can be brought to market through internal channels.

“While companies have well-developed processes for testing new technologies in a variety of ways in their current business, they usually lack processes for trying out early technologies in a variety of different markets that might become a new business” (Chesbrough, 1). The author’s recommend that when dealing with new technologies in new markets those companies should:

• Explore Possibilities: Explore a variety of possibilities and seek rapid feedback at the lowest cost possible.
• Test the Market: Search for tests that are highly faithful to the eventual market.
• Probe and React: Do not go through a thorough and detailed plan. Instead, instigate some initial probes into the marketplace and then react quickly to the new information revealed by these probes.

You must develop a business model for the new technology. This business model will indicate whether or not you should develop this technology in-house; spin it out or license it to another company.

A company also needs to mange its IP using the Open Innovation model. It must be willing to license some IP to other companies, while keeping some IP in-house. Pay special attention to the rights associated with IP and to how the IP relates to the Business Model of your new technology.

Acceleration

The authors discuss how an innovation needs a home whether it is within the company or outside the company. The hardest problems companies face in dealing with this issue, is dealing with the NSH virus (Not Sold Here). This deals with the belief that if the company is not selling it within their own sales channel, then no one else is going to sell it. You have three paths you can take; either the business unit funds the technology (makes use of it), you spin it out or you license it to another company. You do not shelve promising technology to satisfy the NSH virus. Ultimately, shelving does not eliminate the competition, it just means that your company can not profit from it.
Another issue is whether or not

Human Resource Management

No discussion by the authors on HR and Innovation.

Innovation Infrastructure

The only structure that was identified had to do with the creation of an SAB which is described under the Discovery section.

Technology Development

The authors do not discuss in any detail any software or technological tools available to assist in the management of RI projects.

1 Henry Chesbrough, Open Innovation, HBS Press, 2003

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