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From Open Innovation to Networked Innovation

Since Henry Chesbrough published his groundbreaking book on Open Innovation in 2003, the idea of porous innovation funnels has risen to the agenda of innovations managers from all leading companies. Some pick the idea up more consequently than others do, some have more concerns about the critical issues that surround the Open Innovation concept but nevertheless it is generally accepted (please have a look here for Best Practice examples).

What I see happening in some of the most respected companies puts another twist into the Open Innovation concept. These companies are building internal “Facebooks of Innovation” that will help them identify the best experts for a particular innovation challenge. True, this has been tried already in the past – think about the debates on Artificial Intelligence and Knowledge Management. But I strongly believe that this time it will work, due to the power of Web 2.0 applications used and the broadly accepted use of Social Media (keep in mind that the average Facebook user is 38 years old – which practically means that a big chunk of its 500 million users worldwide are older than 38).

Then take one step more and imagine that these internal networks are cinched together with external networks, assembled e.g. in a proprietary and managed innovation community that companies are building up  voilà, there is Networked Innovation: Flexible innovation networks that extend across internal and often even external borders. The recession underscored the value of such flexibility in managing volatility. We believe that the more porous, networked organizations of the future will need to organize work around critical tasks rather than molding it to constraints imposed by corporate structures.

One global services company found for instance that geographic and business unit boundaries prevented managers from accessing the best talent across the organization to solve clients’ technical problems. Using social-network analysis, the company mapped information flows and knowledge resources among its worldwide staff and found several bottlenecks. Using Web 2.0 applications the company set up new innovation communities across formerly siloed business units.

A chemical giant set up its own internal social network to help managers identify the experts needed for running projects across different business units and functions. To broaden the pool of experts, the company has extended the network to include former employees, such as retirees.

A last example from one of Germany’s largest corporations: It is currently building up such a “Facebook of Innovation”. Now this corporation runs Innovation Jams (as pioneered by IBM), uses tools for Collaborative Idea Management and also Open Innovation intermediaries such as Innocentive, NineSigma and yet2.com. You can very well imagine how all these puzzle pieces will neatly fall together and create a the fabric of Networked Innovation.