If It Doesn't Scare You, It's Not Innovation
The contrast between old and new companies is striking. Newer companies have the flexibility to try new things, fail quickly, learn from their experiences and mistakes, and succeed. Older, larger companies tend to be stuck in their ways; they find it difficult to change their culture, come up with new ideas, and change the way that they work. They talk about how they need to be more open and to leverage Open Innovation to continue to grow, but they face a constant battle with fear and the conservative nature of their organizations that hold them back. Some are even unable to share their needs with their preferred suppliers, fearing the exposure of trade secrets or the possibility of giving their competitors an edge.
In reality, however, the risk is minimal compared to the potentially dramatic benefits and returns that can come from leveraging Open Innovation. The companies that have had the most successful Open Innovation initiatives have legal teams that are easy to work with and understand that risk leads to greater growth in the long run. They have support from the executive team and/or their boards of directors. They have connected their Open Innovation efforts to strategy, spreading the risk out so that it doesn’t hurt them too much and they can learn from it if it doesn’t work the first time.
Take Under Armour as an example. At the American Leaders’ Open Innovation Forum in Baltimore last week, they shared some of their innovation case studies, highlighting the ways that Open Innovation have taken them from a $17,000 company in 1996 to a $2.6 Billion company in 2013. Because they have a constant stream of innovative ideas, products, and services coming to them from outside of their organization, they have a steep growth trajectory and have had a huge part in redefining the sportswear industry.
There is an infinite amount of knowledge in the world outside the four walls of any one organization. Of course there is always risk involved with leveraging Open Innovation through partnerships, challenges, acquisitions, incubation, competitions, or even hack-a-thons, but if you’re looking for a big idea or solution, these are great ways to find it. True breakthroughs lead to terrific successes, but they can’t be achieved without trying something a little “crazy.”