How to Manage Outside Innovation Harvard Case Solution & Analysis

Companies are aware of the potential benefits of "open innovation", relying on outsiders and as a source of ideas and as a means to commercialize them, but they were struggling with exactly how to open up their product development to the outside world. First, many managers do not have a clue how to motivate and drive out innovation. In particular, if external innovators be organized as a cooperative society or as a competitive market? Joint community perhaps best known for Linux and other open-source efforts that are managed free of social norms and the "soft" rules to encourage open access to information, transparency, joint development and sharing of intellectual property. Competitive markets are fundamentally different. Rather than cooperate, external innovators in the market will develop several competing varieties of related products, parts or services. Customers then choose from the various proposals, and this often leads to fierce competition and little collaboration among innovators. Since the dynamics of communities and markets so different, companies need to carefully consider which approach makes the best sense for your goals. From their research, the authors identified three important issues that managers should take into account when making this decision: 1) the type of innovation that will be transferred to external innovators, 2) the reasons for them, and 3) the nature of the business model of the platform. In-depth analysis of these issues shows that the choice between the communities and the markets are not as obvious as it may clear as it might seem at first glance. "Hide
by Kevin Boudreau, Karim R. Lakhani Source: MIT Sloan Management Review 8 pages. Publication Date: July 1, 2009. Prod. #: SMR323-PDF-ENG

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