5 Reasons You Should be Making Use of Open Innovation
Discover the importance of open innovation in today’s highly dynamic marketplace, in this guest post from leading business and services review website G2.
Think for a moment about this question and answer honestly – are the smartest people in your industry working at your company?
Be honest! Your company might have some really smart people and maybe one or two industry leaders among your ranks, but are there smarter people working elsewhere? Unless you work at Google, the answer is probably yes, there are smarter people out there.
You probably knew that already. We all follow newsletter and LinkedIn influencers at other companies who we aspire to be like. Why? Because we want to emulate them, their success, and their ideas.
It’s not taboo to admit that sometimes there’s someone out there with a better idea than ours. And that’s where the conversation around open innovation really gets interesting.
What is open innovation?
Open innovation is about accepting that sometimes the best idea isn’t your idea. And even then, sometimes the best idea won’t come from someone inside your company. If you and your team are able to say “maybe we don’t know everything” then you’ve already done half the work right there.
Instead of thinking of your original research and ideas as assets that should be hoarded, your team should focus on how shared knowledge can make everyone better at their job. You can’t be the master of everything, so sharing knowledge is a great way to learn more, faster. By inviting ideas from people outside your company into your business, you reap the benefits of stronger collaborations and better solutions.
A great example of an open innovation platform is Github. Github is an open-source platform where computer programmers can share their codes with each other and collaborate. Instead of working against each other to create coding shortcuts on their own, programmers will work as a collective to improve upon each other’s work.
How can open innovation benefit your business?
Besides the fact that open innovation is a modern process and changes up the way things work, there are a variety of reasons that your organization should be making use out of the process. Open innovation can do more than simply make your ideas better. It can drive ROI, build better customer experiences, and more. Here’s how open innovation can transform your business:
1. Engages a larger and more relevant audience
By making use of open innovation, your organization can better tailor your products and services to your audience. You’ll take ideas from different sources and better deliver them to a more targeted audience. You’ll be hearing innovative ideas from a variety of sources and will be open to ideas that may have not been on the plate before.
Additionally, open innovation can allow you to engage your customer base in order to better deliver a product or service they’re looking for. After all, without consulting your customers that use your product regularly, you may be missing areas for improvement that would have never crossed your mind. By taking the research and development phase from behind closed doors to the hands of your customers can increase customer retention and loyalty to your brand.
2. Improves PR and brand image
Open innovation can have an effect on your brand marketing that was not initially intended. By using the open innovation process, you’ll be able to engage customers that weren’t already engaged to create a better product or service.
When you take an active focus in delighting your customers, you’ll see an improvement in the conversation around your brand. The higher the value that you can provide your customers, the more likely you’ll be able to retain your customer base and easily acquire new customers from word-of-mouth marketing.
3. Increases profitability
Open innovation can help your bottom line. It reduces costs on the production side of things and helps you focus on delivering a better product to the market, faster. When new ideas are added to the mix you’re likely to find answers quicker. This helps speed your timeline up and launch products on an accelerated timeline. The less time your product spends in the ideation stage the sooner you can start selling to people.
It also promotes differentiation in the market which improves your chances of hitting a niche customer or audience. All of this gives you a more diversified revenue stream for your company, which translates to more opportunities to make money.
4. Focuses on outcomes
One of the biggest pitfalls many companies face is the illusion of experience. Some people mistakenly assume that the only way to have the right experience is by putting in decades of work in the field. While that certainly helps, sometimes a unique or unusual experience can be just as valuable as twenty years in the field.
What makes open innovation great is that it’s focused purely on the outcomes. It doesn’t matter where a good idea came from or who brought it up, it’s all about making sure the best ideas rise to the top. This makes it easy for your team to keep your eyes on the prize. You can let the unimportant fall away and focus on what’s working.
5. Improves employee engagement
When the best ideas are encouraged, your employees become more engaged. Your employees are more willing to share new ideas in an environment where they know they’re being heard. Instead of worrying about whether or not they’re stepping on toes, they can focus on what will work.
This expanded employee engagement increases the pool of ideas and fosters a sense of equal ownership amongst your team. When everyone is involved it gives everyone a stake in the success of a project. When you collaborate as a team, you work as a team to get a project finished the right way, from start to finish.
Working smarter, not harder
Nothing beats hard work, but be sure you’re not working hard just for the sake of it. Use the tools and technology you have around you to make better business choices. Learn from your competition and invite new ideas to the table. When you open your mind to the possibilities, everyone wins.
Lauren Pope, Senior Content Specialist at G2
Lauren is a Senior Content Specialist at G2 with five years of content marketing experience. You can find her work featured on CNBC, Hubspot, Yahoo Finance, and on the G2 Learning Hub. In her free time, Lauren enjoys listening to podcasts, watching true crime shows, and spending time in the Chicago karaoke scene.