On the basis that two heads are better than one, having even more people help solve a problem can only be a benefit. The truth of this is becoming apparent to businesses with limited means that are grappling with innovation. The more resources you have available, the greater your chance of success.
However small your operation, Open Innovation (OI) lets you draw on knowledge, ideas, experience, technology and funding through the internet. Also known as crowd sourcing or co-creation, OI involves collaborating with external partners to accelerate innovation. It’s a particularly shrewd way to be innovative and drive business growth and profit.
As The McKinsey Quarterly puts it: “The internet and related technologies give companies radical new ways to harvest the talents of innovators working outside corporate boundaries.”
The UK does not lack new ideas. Stephen Pegge, Lloyds TSB director of SME markets, says that “small and medium-sized businesses account for the vast majority of the 23,235 patents registered in the UK last year. But small businesses are constrained by their size and cash flow. And they may lack the knowledge and experience that can produce new or unusual ideas.”
“Collaborating with another small business, a larger enterprise, or a university, lets you share your know-how, so you can bring a new idea to market faster and more cheaply”, says Professor Pooran Wynarczyk, of Newcastle University Business School.
“Partners can provide knowledge from different markets and industries that you might not be aware of.”
He adds: “And they might offer access to expertise, technology or funding you currently lack – for example, help with intellectual property to register and protect your creation.” By combining forces with a larger company, for example, you can tap into trusted brands that already have routes to market or manufacturing capabilities. You can also spark ideas off other people and build relationships for future collaborations.
Take Cardiff-based Green Light Products. It makes biodegradable packaging, And using OI, it’s opened doors to a consortium of industrial and academic partners that developed a packaging foam from renewable natural materials, tough enough to keep their contents either hot or cold. As a small business with limited resources, Karl Yeo, CEO says, “the collaboration enabled us to do R&D that otherwise we could never have done.”
Amnesty International used OpenIDEO, an OI platform, to sponsor a challenge to help support political activists at risk of unlawful detention. The winning idea was ‘Panic Button’ – an app which encrypts a message on people’s mobile phones and sends it to select individuals in their support network to alert them of the detention. Trialled with human rights workers in Nairobi, it will be launched on Google Play, later this year.
Of course, collaboration is not risk-free. There are no guarantees of success and information could get into competitors’ hands if it is not well managed. But a number of platforms can help with secure OI, in addition to OpenIDEO, which is for social change, they include Innocentive, InnovateUK, Innovation Exchange and Wazoku (Swahili for great idea). These platforms make it easy for you to post problems and find solutions around security and other issues. Their websites offer useful information on topics and trends, and a place to network with like-minded people worldwide.
Universities are bringing together industry and business, research centres and government to create a form of collective entrepreneurship. One such venture is the Big Innovation Centre, part of The Work Foundation, owned by Lancaster University. Professor Birgitte Andersen, the Centre’s director, says: “By bringing the key different parties together we can collectively create growth. Industry can’t do it by itself, research organisations can’t and nor can the government.”
The Centre wants to involve small and medium-sized companies in this process. They can tap into new insights, trends or niche markets which may be overlooked or unprofitable for bigger companies.
“Big companies recognise how much more nimble SMEs are around innovation, frequently using and buying up innovations they have developed,” says Prof Andersen. “This makes SMEs an essential part of the supply chain, and we are exploring ways of integrating them into our plans.” SMEs, meanwhile, however small, can use OI to pose challenges or tasks and access talent on a short-term basis rather than having to hire extra staff.
But there’s nothing new about collaboration – its benefits were expounded by Aristotle in the fifth century BC. Although in today’s fast moving and fiercely competitive market, it is increasingly important. Failure to join forces and pool resources may not just mean reduced profits, it could mean lost opportunities that damage, or even destroy, your business. The power of many is definitely better than the power of one.