Just like Open Innovation, there is another new trend in accessing innovation outside the captive R&D organization – Borderless Innovation. The article proposes four different models:
- The Orchestra Model, which is highly structured and centralized. It is typically focused on upgrading an existing product or service that dominates a market, with tightly controlled ownership of intellectual property. Examples include the iPhone, whose developers have been releasing roughly 10,000 applications a month for use with it, or India’s ultra-low-cost Tata Nano car, which uses a localized network to manufacture units from a fixed design.
- The Creative Bazaar Model, which is based on leading players in a particular market that want to acquire new ideas from small companies or individual inventors in order to broaden their range of products and market position. A case in point is Dial. The soap manufacturer aims to find 30% of its new ideas from outside the company through a program called “Partners in Innovation” that it launched with the New York-based United Inventors’ Association, an organization founded in 1990 to foster education and support for inventors.
- The MOD (“MODification”) Station Model, in which ideas come from a broad, global community, with the goal of coming up with new uses for existing products. One example is Mappr, a photo service developed by Stamen, a company in San Francisco. As users of Facebook and other social networking sites tag open-source photos, they help to build a database that Mappr uses to create photographic guides to different geographic locations.
- The Jam Central Model has the loosest organizational structure and mission, often involving experts asked to solve problems that might not fit well into a large corporate profit strategy. For example, for the Tropical Disease Initiative, volunteer scientists are using open-source collaborative software to address Third World health problems, such as malaria and dengue fever. The medicine needed to cure these diseases does not have the recurring revenues that pills for chronic conditions have, so it attracts little attention from the big pharmaceutical companies.
These are interesting models and each one if implemented effectively can bring significant benefits. However, much is left unsaid about implementation. Accessing innovation outside is not sufficient, organizations need processes, tools and cultures to mature the idea once brought inside. This is easier said than done. R&D teams frequently have Not-Invented-Here foreign body rejection of outside innovation (sometimes necessarily so because of the sense of pride in their team). Also, developing maturation plans and resource requirements for outside ideas gets more difficult the more out-of-the-box the idea is. Finally, these innovation seeds need special attention from the R&D managers to make sure they develop into successful products.
In summary, Borderless Innovation is a very good idea – if the organizations have processes, tools and metrics to manage it effectively. A strong intellectual property management skill is also needed to protect all this innovation.