Market forces such as competition from emerging disruptors often make it challenging for companies to consistently make a profit without depreciating the value for customers. That’s why it is important for organizations to continuously innovate & improve productivity to make the most of new business opportunities. Through open innovation, businesses can better identify these opportunities and create value for their customers.
However, despite massive investments of time and money, innovation is still elusive for many companies. Innovation initiatives might not always succeed and what works for you now may quickly become obsolete. If both of these happen simultaneously, a company can lose its market share quite rapidly. Many former market leaders have witnessed this. If you aren’t alert, stakeholder value and value to customers can erode within a time span of a couple of months to a few years.
But why is it so hard to build and maintain the capacity to innovate? Often, the major challenge is a lack of a well-thought-out innovation strategy suited to an organization’s position. Most businesses focus too much on things like bringing the prices of their products and services at parity or below that of their competitors. Such strategies look similar across all companies and only offer incremental improvements. For long-term survival, this isn’t a good approach. Generally, businesses that invest in innovations that challenge the status quo are the ones that survive. Others get caught in the wake of the disruptive changes ushered in by these innovative companies.
Value Creation through Open Innovation
Instead of just looking for innovations internally or copying what their competition does, successful companies leverage open innovation to find unoccupied territory and deliver real value innovation. What is open innovation, you ask? It is a business management model that encourages companies to seek collaborations with external agents to speed up innovation.
How does it speed up innovation? Unlike internal teams burdened with corporate bureaucracy, external innovation is often led by startups since they tend to be leaner and faster. So, how can you find these innovative emerging companies? You guessed it – Open Innovation! More precisely, data-driven Open Innovation. Powered by Big Data and Artificial Intelligence, this type of open innovation cuts through the noise and turns data from disparate sources into actionable insights. Thereby, the process enables businesses to pursue Value Innovation – a process defined as delivering exceptional value to the most important customer in the value chain all the time, every time. Moreover, value innovation gives companies the chance to simultaneously differentiate their product lineup from those of their competitors as well as lower costs.
What Value Creation Looks Like
Some of the ways open innovation creates value include:
- Creating innovative products that grow or maintain market shares and improve profitability.
- Implementing market-defining improvements in designs, product or service quality, or business models.
- Employing process improvements that lead to a significant reduction in cost and/or time, thereby improving the competitiveness of a business.
- Identifying emerging technologies that will create the most value for both customers and the company.
- Triggering improvements that enhance customer experience and increase retention.
Who Can Leverage Open Innovation?
Short answer: organizations of all types and sizes. From for-profit businesses, nonprofits and smart cities, government institutions to universities, any entity stands to benefit from open innovation. While much of the focus is on external parties, such as collaborators or customers, open innovation also creates value for your own corporate strategy. Understanding what kind of value you want to create for your customers is important in defining a long-term innovation strategy.
Depending on your innovation goals, we at StartUs Insights offer a range of services enabled by our Big Data and AI-powered Discovery Platform, covering over 2,5 million startups & scaleups globally. Some of our services that help you achieve your open innovation goals include:
- Startup Programs: Boost startup deal flow through data-driven promotion, direct outreach & storytelling that reaches hundreds of thousands of startups & scaleups, making sure you attract the most relevant ones
- Trend Scouting: Identify emerging and latent trends and developments that will impact your competitiveness
- Technology Scouting: Reveal emerging technologies that match your innovation goals
- Startup Scouting: Discover over 2,5 million startups & scaleups globally, scouting the right partners & saving you weeks of desk research
To discover how you can leverage open innovation to create value for your customers, get in touch today!