Simply put, innovation is the creation of a viable offering. Its value construct requires identifying the problems that matter and moving through them systematically to deliver elegant solutions. Innovation is seen and felt not only at the product or services level but in the firm’s supply chain, processes, and its ability to promote learning and transfer of knowledge. The increasingly global nature of business forces, ultimately facilitates innovation providing that firms can sense, adapt, reconfigure and transform in a timely manner.
At its core, innovation occurs within three broad areas:
- At the “Configuration” level which are focused on business delivery, structures, profit model network and internal processes
- At the “Offering” level, focused primarily on its product system and product performance
- At the “Experience” level, focused on customer engagements, channels, brand and personalisation.
For instance, when innovation takes place at a process level, it usually contains tacitness and complexity (in other words, a fair amount of causal ambiguity) then, the simple attempt to imitate it externally is usually futile.
Innovation is the backbone of the modern world. Beyond a new product, service, or idea, innovation, as we know it today, is a lifestyle. From a business perspective, innovation helps a firm stand out from its competitors. This enables them to thrive in the business world.
Open innovation takes this a step further. It combines internal and external ideas as well as internal and external paths to market, to advance the development of new technologies. Research from the Stockholm school of Economics found that the largest firms implement organizational modes of open innovation on average 1.5 times more than the medium-sized and the smallest ones.
Certain vehicles such as corporate venture capital, talent on-demand, incubators and accelerators are more conducive to open innovation than others. This living concept solves problems by developing solutions following a deep analysis of the state of a company.
Open innovation involves knowledge ecosystems, business ecosystems and bilateral collaboration. To succeed innovatively, there are elements that merit the consideration of major decision-makers: