Key Barriers and Challenges to Open Innovation

Overcoming Key Barriers to Open InnovationOvercoming Key Barriers and Challenges to Open Innovation

Any organization looking to engage in Open Innovation is likely to meet with initial resistance. As humans, we tend to oppose change. Realizing true value from open innovation is possible only when the organization understands the underlying factors behind this resistance and appropriately addresses them.

Across organizations that have successfully adopted  open innovation, there are some specific patterns to the barriers and challenges faced. We explore some of the most common barriers, and how organizations can overcome them.

Adopting a More Open Culture

The ‘absorptive capacity’ of the individuals in the organization comes up as a strong barrier towards open innovation. It is not just about the ‘Not Invented Here’ syndrome but also reflective of the openness of the individuals to different ways of thinking, or doing, than they have been traditionally used to. It is about individuals being open to change, and developing a level of comfort with fluid ownership and a certain level of uncertainty.

Organizations that realize this can help foster a more open and accepting work culture. Instituting organizational activities that require collaboration across internal groups (but ‘external’ to the individual), go a long way towards this.Though such internal initiatives may not be called open innovation, they still give an advantage to the organization in unlocking internal potential, creating a cadre of people who are not only innovative themselves, but also develop a keen sense of spotting and engaging with innovative opportunities. It is only when the individuals in an organization realize the potential of collaborative innovation, will they be able to embrace true open innovation and realize its value.

Managing Performance of Open Innovation

The performance of an open innovation initiative can be measured at different stages – the number of ideas generated, the number of ideas selected, the number of new products developed or the cost benefit of new processes. As in any other collaborative process, its the coming together of many minds that helps polish the idea and take it to fruition. It is often difficult to provide a measure of ownership, or the level of contribution. There are many such intangible aspects involved. This poses a key challenge to many organizations especially when they need to evaluate the ROI on their open innovation efforts.

In addition, there is often a tipping point at which the costs of managing several external partnerships may outweigh the benefits. It helps if along with measuring the end value or organizational metrics, the organization also tracks intermediate milestones to make sure they are on the right trajectory with their open innovation journey.

Realizing Value from the Ecosystem

When organizations of different sizes come together in an open innovation effort, it can often lead to an imbalance due to the differences in perspectives and perceived value. In such cases, the leading organization has to take up a more ‘orchestrating’ role to bring the diverse partners together to form a productive ecosystem. This can involve coordinating with individuals, universities, suppliers and vendors – potentially overloading the organization.

To realize its full potential the organization has to see itself as part of a larger ecosystem rather than an isolated island. This is perhaps becoming an integral part in today’s connected world where organizations are deeply involved with the social and market structures around them. In the long term, a better relationship with their ecosystem is the only sustainable way forward.

Being adequately prepared to handle these challenges and barriers will enable the organization to better realize the full potential of their open innovation efforts. But any such effort needs to be driven by the organizational leadership. Through their communication, actions and flagship initiatives, they must create a culture where open innovation is always actively considered as strategic option towards acquiring new knowledge and innovating. The onus to prove their case should rest with those who wish to remain closed.

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