Over the years we have seen many companies failing due to strategic drift, MySpace is a prime example, from being the pioneer in social networking on the web to its demise due to competition from Facebook. The reason MySpace failed was its failure to respond to the changes in its external environment.
What are these organizational structures and processes that facilitate open innovation in companies?
They determine the success of open innovation practices and, therefore, this theme clearly deserves more attention from managers. It is surprising that very few academic and professional articles have been written about this topic.
In this paper, the authors focus on the impact on open innovation performance within vertically and horizontally integrated companies. This structure allows the company to design and manufacture components, subsystems, and final product assembly before selling it to customers.
In horizontal integration the business focuses on one aspect of the value chain and integrates all product offerings at that stage of the supply chain. A successful example is Dell Computers; the company offers a full range of products but focuses on a thin band of the supply chain, while it continuously interacts with a dynamic supply chain.
Suppliers and small actors in the innovation network will submit ideas to the company. They can utilize their value chain position to attract the type of ideas they want and commercially leverage the best ideas by integrating them into their new products. Vertically integrated companies normally have strong product development capabilities.
For instance, Tetra Pak has 60 years of experience leading the industry in cardboard containerization and DuPont has a core expertise in commercializing chemistry breakthroughs. Traditionally, these companies have been working in a closed innovation fashion, based on strong internal capabilities, but due to market forces they are now embracing open innovation.
These firms have a different way of profiting from open innovation compared to the horizontally integrated companies. These firms have a different way of profiting from open innovation compared to the horizontally integrated companies: It is not our intention to compare the effectiveness of the use of open innovation in both types of integrated companies.
It is however obvious that successful open innovation creates different opportunities and has to be structured differently in both types of firms. In more general terms, it is tempting to examine under which organizational conditions open innovation can flourish.
Some authors suggest that some organizational structures may facilitate open innovation and others may hinder it.
Naqshbandi and Kaur for instance claim that: A formal organizational structure is negatively related to the creation of open innovation by an organization. Yet, the question is whether it is a productive to look which type of organization is better for open innovation.
We come back on this question when we provide some insights from the MOOI-forum discussion see below. Other authors have been more nuanced in their approach. Linda Beltz, came up with the following overview of organizational structures for open innovation when she discusses the benefits and drawbacks of centralized and decentralized ways of organizing open innovation.
Linda Beltz, organizational structures for open innovation Both centralized and decentralized ways of organizing open innovation have their pros and cons as presented in the table above. In most cases, companies have a central organization of open innovation at the beginning.
A lot of the companies move towards hybrid models as their organizations have matured at open innovation. Both centralized and decentralized ways of organizing open innovation have their pros and cons. The centralized organization is the easiest to manage, but it is sometimes difficult for the business units to feel enough ownership.
The author concludes that having some form of hybrid is probably the best, as it provides ownership from the businesses, yet it gives a center of expertise. If business buy-in is not an issue, it is more efficient to have a centralized function since in this way you open innovation expertise is used optimally — no need for duplication across the organization.
I focus on a few topics only. Giving an overview of all the topics would lead me too far.Pete Behrens. Leadership Agility Coach, Trail Ridge Consulting.
Keynote: Reprogramming Leadership for Agility As Agile Leadership Coach for over 15 years, Pete accompanies companies like Google, GE Healthcare or McKinsey and Company. Marlin Hawk is a leadership advisory and executive search firm that delivers the next generation of business leaders.
Nokia’s strategy drift further justifies the importance of the integration of these two approaches.
Since the company first broke new ground and launched its differentiating and innovative handset instead of the popular bulky and bricklike device. based on Nokia’s internal resources and external business environment (From the supplied.
Board of Directors Pidilite attributes its leadership status to its strong and active board of directors, who relentlessly steer the company ahead with their experience, insight and commitment to good corporate governance.
Tieto Oyj (until April TietoEnator) is an IT software and service company providing IT and product engineering services, with approximately 13, employees, active in more than 20 timberdesignmag.com is domiciled in Espoo, Finland, and the company's shares are listed on the NASDAQ OMX Helsinki and Stockholm.
The company provides services to the following industry groups: financial services. Supply Of Supply Chain Management - This video shows how Walmart, the multinational retail giant, manages its storage and supply of products and how it has gained great benefits by adopting and implementing an efficient supply chain strategy.