Concept, Structures, and Decision Factors of Open Innovation
5.5 The Role of Internal Open Innovation Attitude .1 Internal Open Innovation Attitude
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decreasing speed of the product life cycle triggers an increase in trade, and increased trade actualizes open innovation through the trade process itself.
Nowadays, the requirements for reinvention of capitalism are growing. Creating shared value (CSV) is integral to a company’s profitability and competitive position (Porter and Kramer 2011). The main way to acquire CSV or dynamic energy of sustainable development in or out of firms is open innovation (Christensen 2012).
5.5 The Role of Internal Open Innovation Attitude
5.5.2 Deep Relation Between Internal Open Innovation Attitude and External Open Innovation
Apple Corporation built a creative culture under the leadership of Steve Jobs. He organized management retreats as an annual ceremony. Anyone who attends a retreat can take three or four full days to develop creative ideas. In addition, he gave any team that was involved in new innovative projects such as the Macintosh, iPhone, and iPad big compensation (Young and Simon 2005, p. 58). This policy gave his company an “open attitude” to new ideas. And this internal open attitude has a relation with its external open innovation.
At Apple in the early days, Steve Jobs would go outside the company for search- ing creative product design and advertising. Steve surely denied the “NIH” philoso- phy—“not invented here.” The technology had to be created within Apple; if his technical wizards did not know how to do something, they would just hire someone who did. Going outside the company simply was not acceptable. Someone who can’t change their ideas is a prisoner of his past. Steve broke out of that prison (Young and Simon 2005, p. 279). Several of Apple’s products such as the Macintosh, iMac, and iPad were developed through internal creative and open research, but the initial ideas were from outside Apple. Some of the technologies took root through the arrival of key employees at Apple. The Macintosh computer embodied many of the user-interface design concepts created at Palo Alto Research Center (Chesbrough 2003, p. 5).
Google has a 20% rule, which means that any employee can participate in any interesting research or technology job on his or her own volition (Luoyaozong 2005, p. 111). This rule allowed employees to develop several creative new prod- ucts such as the Google Deskbar, Google Books, Google News, and Google Alerts.
It also led Google to have an “internal open attitude” to new products. In addition, Google recruits creative people from all over the world. As a result, it can be argued that the “internal open innovation attitude” has a deep relation with external open innovation. 3M also has its 15% rule, which is similar to Google’s. This rule was behind the creation of the Post-it. It also spawned 3M’s adhesive tape business, which currently produces more than 700 specialized products for medical, electri- cal, home, and industrial applications (Luecke 2003, p. 5).
In addition to the cases discussed thus far, managing open innovation in a world of intermediate markets for ideas also requires the construction and support of a rich internal innovation network (Chesbrough 2006a, p. 20). Indeed, an internal innova- tion network is essential for the open innovation model and markets such as Intellectual Ventures, InnoCentive, and Ocean Tomo. In conclusion, internal open innovation attitude and external open innovation are deeply related. This leads to the conclusion that there is a deep relation between internal open innovation and external open innovation.
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5.5.3 The Function of Internal Open Innovation Attitude to External Open Innovation
The inventors of a new technology are often not the first to profit from that technol- ogy, and one of the reasons for this is the difficulty of transferring new research discoveries into production (Chesbrough 2003, p. 115). Intel put together an R&D group and a production group in such a way that every new researcher has to work on production from the beginning of their career. In addition, Intel invested in stan- dardizing its equipment between “lab” (laboratory) and “fab” (fabrication). These policies allowed the company to develop an internal open attitude. Intel’s research philosophy fostered an external orientation to the generation of knowledge (Chesbrough 2003, p. 130). Indeed, Intel’s internal open innovation attitude trig- gered several mechanisms to access external innovation such as the Intel Technical Journal, the funding of about three hundred external research projects and lablets.1
Knowledge creation capability rather than organizational knowledge is a critical resource in an organization (Nonaka and Konno 1995, p. 71). Not merely core com- petences but also capability, which is used as the know-how at the organization level, is considered better for open innovation. Nonaka’s knowledge creation theory asserts that the interaction between tacit knowledge and coded knowledge creates knowledge in both quantity and quality (Nonaka and Konno 1995, p. 93). The knowledge creation capability means internal open innovation, and it is one of the main resources for knowledge development in the interaction between tacit and coded knowledge. Knowledge firms, which are similar to active external open inno- vation firms, have several organizational cultures such as an open culture and the not-quantity-but-quality culture, and they stress the importance of communication (Nonaka and Konno 1995, p. 204). According to Nonaka, an internal open attitude also increases external open innovation. That is, an internal open innovation attitude will have a modulating effect on the relation between external open innovation and innovative performance. Here “modulate” means “extend,” “increase,” and
“expand”. If we analyze the relation between internal attitude and open innovation, we can understand more comprehensively the open innovation process and create open innovation strategies.
1 “Lablets” are small research facilities located adjacent to three leading university research cen- ters—Carnegie Mellon University, the University of California, Berkeley, and the University of Washington —instead of next to Intel fab facilities. As with other parts of its R&D system, Intel manages these new entities in a decidedly untraditional manner (Chesbrough 2003, p. 123).
5 Concept, Structures, and Decision Factors of Open Innovation
5.6 The Difference in Open Innovation Depending