10. Open innovation & online communities Flashcards
What is the concept of open innovation?
“Open innovation is a simple concept: instead of doing everything in-house, companies can tap intothe ideas cloud of external expertise to develop new products and services –But, as with many concepts, the devil is in the details (King & Lakhani, 2013: 48)
What is innovation?
Innovation depends on employees recombiningexisting and new knowledge components in novel ways to create breakthrough products & services
Innovation is:
* idea generation»_space; managers have more experience with this
* idea selection»_space; lead users and customer insights
* implementing & value capture (not part of this text)
What are the 3 basic mechanisms underlying success with open innovation?
1)Large numbers of participants
* innovation process is highly uncertain > engage in parallel search
2) Large diversityof participants > ‘wicked problems’
* methods from other fields, “inventions made by outsiders”
3) Participants’ self-selection
* “Tasks tend to be self-designed by participants rather than by an external authority (…) Thus self-selectionby participants with diverse motivation and ability to select role and task, and effort is a key enabler.” (Farajet al., 2016: 672)
What are the 3 open innovation strategies?
Innovation is:
* idea generation»_space; managers have more experience with this
* idea selection»_space; lead users and customer insights
* implementing & value capture (not part of this text)
What is the challenge of opening idea generation?
Opening idea-generation: contests // innovation tournaments
-how to contract with idea generators? (IPR)
*buy idea after it is developed, but what is
the value? (information paradox)
*innoCentive
-generator bears all the cost and risk
*‘tool kits’ (ARM)
*break complex problems into smaller parts
What is the challenge of opening idea selction?
Opening idea-selection: approval contests
-using customer feedback
-user driven vs. user-oriented –value alignment
What is the challenge of opening both strategies?
Opening both: communities & markets: business model?
-online communities/ platforms: consumers can modify and recombine, open-source coding projects, external developer platforms such as TopCoder
How do you define the right strategy?
1) Open idea generation: (need for external knowledge)
*Do outside innovators have access to knowledge that can generate a solution?
*Is it possible to attract these outside innovators?
*how to handle outsiders’ ideas to overcome reluctance –to handle contests effectively and honestly (InnoCentive)
2) Open idea-selection process (needforexternalknowledge)
*do outsider “selectors” have unique knowledge about customer needs?
*Is it possible to align outsiders’ perspectives with company’s goals? (control/autonomy)
3) How to make money from an open innovation (Siemens) –a new business model? If innovations are not protected by patents/ secrets > new business model
What is online commnunities?
“An online community (OC) brings together large numbers of geographically dispersed individuals in support of an activity, interest or identity” (Faraj et al., 2016: 668)
*unconventional knowledge collaboration & innovation
*break the borders of conventional organizations
*contributingknowledgetostrangers
What are the sources of value creation in online communities?
*economic value from new products and services, & use value for participants
OCS EMERGE WITH FOCUS ON SUSTAINING KNOWLEDGE FLOWS –WHY IS CONTENT EMERGING?
Attention to both social aspects and tech shaping
innovation and participation –“vibrant communities”
- technology is not generative of value in itself
- Sociality is social interactions in an OC sustaining collaborative action with a shared goal (innovation)
– Value is found in sociality of OCs: “how useful participants find the OC as a source of knowing”
1)Open structure: Fluidityin membership, self-selection (roles and tasks) and tasks are self-designed
2)Swift trust (like-minded)
3)Epistemic orientation (knowledge production through social practice)
ONLINE COMMUNITIES AS SPACE FOR KNOWLEDGE FLOWS
Value creation in online communities
–as compared to physical communities
* Online communities can facilitate tacitknowledge flows between participants
“OCs are collective spaces of knowledge flows characterized by a continuous morphing and constituted by digital technologies and participants ” (Faraj et. al, 2016:669)
Value of OC’s = Shaping spaces for knowledge flows –used and created in the sociality of OCs > knowledge collaboration between human actors for the entire knowledge continuum»_space; new knowledge
KNOWLEDGE FLOWS IN OC
Moving from innovation by
1) E> E: combination of knowledge and ideas (obvious and well known) towards innovation by
2) more expanded flows of tacit knowledge among participants
* extend beyond personal contributions and learning and interactions
* reliant on good will, social capital, norms of both giving and taking
* facilitated by technological tools for information presentation and collaboration
How is knowledge created in OC’s?
Tacit > explicit: (externalization)
Overcome knowledge of differences
in groups creating knowledge
- learn the language game
- learn to express experiences in
OC and specialized language
- externalize own expertise
- help the newbies
Explicit > tacit: (internalization)
Learning by doing, incorporate
-evolving understandings and what is relevant knowledge?
-search behavior = flows in OC
-peer interaction (Q&A) shape understanding of OC dynamics
-what to learn, when to internalize
Tacit > tacit (socialization: what is going on in OC)
-intense engagement in the social process
-dialogue, repeated interactions
» creates sociality
-online advice = story-telling and related comments
-archivedcontextfor interpreting concepts and knowledge
-individual work (task) is shaped by the underlying OC sociality (background knowledge)
-standards of excellence
EXAMPLES OF KNOWLEDGE IN INNOVATION PROCESSES
Tacit to explicit (externalization): MVP, design thinking, design metaphors, getting a common language
Explicit to explicit: (combination) business model canvas
Tacit to tacit: (socialization) how to behave in a community: for ex: not steal ideas, always do your best etc. –very clear in games for instance
Explicit to tacit: (internalization) learning from a collaboration, using this way of working in my own practice, becoming situated
BUILDING AN EXTERNALDEVELOPER PLATFORM
Power an entireecosystem–In essence, an externaldeveloper platform (ExDP) extendsto externalparties accessto the APIsfor a selectedset of components on a company’sdigital platform(Ross et al. 2019;104)
Apple had luck–GE with theirExDP‘Predix’ not so muchluck: fewcustomersand thereforfewdevelopers
Ross: GE anticipated that external developers would create components to expand the functionality of the Predixplatform.
