Exploring the Culture of Open Innovation

Piero Formica, Martin Curley, Piero Formica, Martin Curley

• Publisher: Emerald Publishing Limited
• Year: 2018
• ISBN:
  9781787439795
• Topic: Business
• Subtopic: Entrepreneurship
• Index: Business

Acclaimed entrepreneurship and innovation scholar Piero Formica, along with a strong and diverse cast of international contributors, explore the world of Open Innovation in this volume. Tackling new developments in the field, the authors examine altruism and the role of openness to unorthodox and unconventional experimentation as the newest arena to create modern knowledge resources and entrepreneurial ventures.

Chapter 1

In Search of the Origin of an ‘Open Innovation’ Culture

Piero Formica and Martin Curley

Abstract

In the knowledge economy, greater togetherness is the prerequisite for innovating and having more: selflessness extends scope while selfishness increases limitations. But human beings are not automatically attracted to innovation: between the two lies culture and cultural values vary widely, with the egoistic accent or the altruistic intonation setting the scene. In the representations of open innovation we submit to the reader’s attention, selfishness and selflessness are active in the cultural space.

Popularized in the early 2000s, open innovation is a systematic process by which ideas pass among organizations and travel along different exploitation vectors. With the arrival of multiple digital transformative technologies and the rapid evolution of the discipline of innovation, there was a need for a new approach to change, incorporating technological, societal and policy dimensions. Open Innovation 2.0 (OI2) – the result of advances in digital technologies and the cognitive sciences – marks a shift from incremental gains to disruptions that effect a great step forward in economic and social development. OI2 seeks the unexpected and provides support for the rapid scale-up of successes.

‘Nothing is more powerful than an idea whose time has come’ – this thought, attributed to Victor Hugo, tells us how a great deal is at stake with open innovation. Amidon and other scholars have argued that the twenty-first century is not about ‘having more’ but about ‘being more’. The promise of digital technologies and artificial intelligence is that they enable us to extend and amplify human intellect and experience. In the so-called experience economy, users buy ‘experiences’ rather than ‘services’. OI2 is a paradigm about ‘being more’ and seeking innovations that bring us all collectively on a trajectory towards sustainable intelligent living.

Keywords: Open innovation; knowledge economy; disruptive innovation; entrepreneurial culture; organizational culture; innovation culture

Prelude: The Cultural Openness of Open Innovation

Culture – and open innovation culture is no exception – is a karst river flowing down to a very deep level beneath the superficial layer of transient cultural trends. Delving deeper, it seems that the Manichean vision of innovation – its clear division into the two opposite principles of closure and openness to the outside world on the part of the innovator (whether an individual or a team) – does not reflect the reality. As early as the 1980s, technology programmes in Sweden and Finland, for example, were developed through collaboration between businesses, universities and public authorities. European programmes also referred to openness and co-creation. More generally, in the absence of cultural openness, open innovation looks like an old wine in new bottles, to adopt Trott and Hartmann’s (2009) characterization.

Even before ‘innovation’ entered into common usage, as Rita Gunther McGrath (2012) notes, in corporate vocabulary the word ‘diversification’, which meant entering new business territories, was associated with knowledge and information beyond the company walls, obtained by interweaving external links. It is therefore on a continuum, ranging from weakness to strength, from randomness to a systematic approach, from low- to high-quality ties, that open innovation unfolds.

Divested of the habit of Manichean dualism, open-mindedness enables us to view open innovation as a work in progress, far from perfect, non-linear and cyclical, with widely varying points of origin, emitting warning signals and equipped with feedback mechanisms. Open-mindedness, then, acts like a magnet in attracting talent and implementing rapid cycles of creative iteration. The result is a highly generative behaviour based on mutual responsibility and reaping mutual benefits.

The starting point for this path is to escape from the fenced-in area of economic theory, fixed once and for all in the figure of homo oeconomicus, a meticulous calculator who pursues his or her pleasure to the point of maximizing it. Those who leave that enclosure enter the field of economic life. Here, business people with their short-term profit-oriented commercial interests aim, together with the managers who support them, to acquire power and social prestige as well as increasingly high monetary rewards. As a dominant class, their ideas and approaches expand the bureaucracy that guarantees the status quo. But cultural openness works against this reductive tendency, seeking and finding a means of redistributing power by giving voice to scientists, engineers, technicians and ‘multilinguists’ (those committed to bringing together research, innovation and entrepreneurship by combining physical and natural sciences with human and social sciences). With its reliance on freedom of expression and collaboration, open innovation undermines the status quo and, therefore, sets in motion the evolutionary process of economic life.

Setting the Scene

O knowledge ill-inhabited, worse than Jove in a thatched house!

William Shakespeare (As You Like It, III, iii)

‘The totality of the space outside the borders of the world is infinite’, wrote Lucretius (50 BCE) in Book Two of On the Nature of Things. Similarly, outside the boundaries of our culture, the open innovation space is infinite. The above quip by Shakespeare’s jester Touchstone in As You Like It may prompt us to reflect that culture – of which knowledge is a component along with language, beliefs, customs, practices, codes of conduct and institutions – is the enabler of innovation processes, especially in the open innovation mode. If the cultural norm is unhealthy, knowledge is affected. In turn, a knowledge malaise has negative repercussions on culture. Such repercussions are ‘sandbanks’ in the shallow waters of the convergent thinking that are not navigable by entrepreneurship (unconventional thinking). Instead, they are navigated by managerial thinking with its focus on codified and mandatory practices – such as business plans, financial projections and the guarding of innovation in the coffer of intellectual property protection.

It is the non-linear flow of divergent thinking that gives rise to new ideas such as those featuring in the open innovation framework, where the entrepreneurial process – that is, the process of finding solutions to existing problems or of recognizing opportunities to be exploited on an entrepreneurial scale through the sharing and exchange of ideas, even with potential rivals – finds ample space for action. The culture of open innovation does not sacrifice such a process on the altar of managing existing activities with proven products and services. Nor is it subjugated by the power of senior corporate bureaucrats, who play only at the table of corporate business while neglecting that of entrepreneurship.

The agility of the innovative imagination produces entirely original visions that feed knowledge with new lifeblood through digital technologies. This is how a new infrastructure – ‘knowledgefication’, whose force of transmission is comparable to that of the electricity networks of the early twentieth century – underpins the entire fabric of open innovation.

Bits break into the world of atoms, upsetting previously established social and economic balances. The ocean of research is crossed not only by large, bureaucratic companies with their experts on the ship’s bridge – who, while asking their subordinates to be independent and creative, tell them exactly what they have to do and how to do it. That ocean is also crossed by the agile vessels of emerging innovative firms, with their key people like explorers who perceive new horizons. Reflecting on scenarios such as these, there is much debate about how to design and implement tools, techniques and practices that complement in-house competencies with external sourcing, thus overcoming the ‘not-invented-here’ mindset. This approach, which is broadly defined as ‘open innovation’ is not open innovation if it lacks a cultural background – characterized not only by a set of written rules but also by the intermingling of traditions, rituals, styles, languages and the attitudes of the protagonists.

When embedded in institutions, business and social organizations, civic communities and enterprises, open innovation agents are game changers whose culture is rooted in the creation of value, to be retained where it has been generated. Having long-term expectations, pursuing societal benefits, contributing to altruistic goals, targeting the most progressive knowledge fields and discovering new horizons through creative ignorance (see below) amid the fog of uncertainty are key aspects of their cultural background. Their interplay recalls the informal but culturally significant environment of the coffee houses of the Age of Reason:

In the period of Enlightenment and Rationality, the so-called Age of Reason, people like Joseph Priestley, who discovered oxygen, James Watt, the Scottish engineer who refined the steam engine, and Josiah Wedgwood, an entrepreneur who developed ceramic tableware and decorative items, would meet in the English coffee-houses to drink coffee and smoke tobacco (‘drink the smoke’, or ‘chi yan’, as the practice was called by tobacco smokers in China in the seventeenth century).Thus it was that in Europe in the eighteenth century, immersed as the continent was in the scientific method of Newtonian physics, the introduction of coffee, to be sipped in company, was volcanic in effect. Inventions and discoveries seemed to spread like molten lava, arising from conversations between intellectuals stimulated by caffeine to such an extent that the historian Tom Sandage has described the coffee houses as the Internet of the Age of Reason. Here was the starting point of the phenomenon which was to become known as the cross-fertilization of scientific, industrial and financial ideas. (Formica, 2013, pp. 123–124)

To ignore culture, with its major components of language, beliefs, customs, codes and institutions, is to leave the projection of the company to the outside world in the hands of strategy and structure alone. Even if this approach succeeds temporarily, over time the marginalization of culture will have negative effects. The culture that prepares for open innovation is not, therefore, an ornament – beautiful but useless. On the contrary, it is beautiful and useful, since it presents to us the human mind predisposed to openness to other, different minds and, therefore, inclined towards collaboration. It also shows us the virtue of altruism which, by defeating predatory behaviour, brings benefits to all players in the collaborative game. This reminds us of a comment widely attributed to Peter Drucker, the management thinker who considered himself a historical writer (Simon, 2016): ‘culture eats strategy for breakfast’ – and, we might add, ‘structure for lunch’. Alternatively, by recalling Greek mythology, we could say that, thanks to culture, we have the opportunity to enjoy the favours of Athena, the goddess who, among her many attributes, presides over strategy.

Only subject to cultural conditions will open innovation have the opportunity to speak, in the framework of strategy and structure, the language of technical skills and methods acquired through experience and from books, articles, databases and dossiers. Last but not least, culture is the key that gives access to open innovation beyond the boundaries of business, making it accessible to society as a whole.

Borrowing from Einstein’s playful comment during banter with other physicists after a famous dinner with the King and Queen of Belgium (Greison, 2016), we could depict classical innovation as apricot jam and open innovation as the grapes that make up a bunch. His joke referred to the concept of discontinuity (quantum physics), which stands in contrast to that of continuity (classical physics). And it is precisely the concept of cultural discontinuity that characterizes open innovation – a discontinuity that removes established certainties to reward Renaissance values such as dynamism, diversity and versatility, and cognitive conflict. This is a culture rooted, as the philosophers of the Enlightenment would say, in the ‘art of conversation’, involving the whole of society and whose horizon is, therefore, much wider than that of a culture restricted by practices mastered by experts pursuing innovation strategies. This is a culture of imagining, exploring, experimenting and creating, in a dynamic balance between introspection and open-mindedness, which touches the most sensitive chords of the human imagination projected onto future events.

‘Discovery consists of looking at the same thing as everyone else and thinking something different’ – this is, according to the Hungarian physiologist and Nobel Laureate Albert Szent-Györgyi (1893–1986), the preparatory way to the future, which is unfathomable, ambiguous and open to every option. One major move by a competitor, or one new technology, is sometimes all it takes to end an empire determined to grow its own fortunes rapidly by pressing down on the accelerator. Were your own current business maintained like a carefully tended garden, with neat beds and high walls, that would not be enough. Although apparently in a stable state of equilibrium, the survival of the garden would be continuously under threat from unexpected weather events or invasive pests. On the other hand, those who breathe the air of open innovation disregard the conditions for equilibrium, because they deliberately expose themselves to both the need for constant adaptation and unexpected disruptions.

The education we have received and our past experiences push us to formulate ideas along lines of thought drawn from that education and those experiences. Thus, we are inclined to conceive novelties that are a correction, not a radical change, of the old. Revolutionary ideas, in contrast, come to us once we have left that predictable course and have embraced uncertainty and doubt. Open innovation prompts us to reject our indoctrinated thinking and proceed along a path that takes us back to a concept of the ancient Romans embedded in the verb patēre. Pateō: ‘I am accessible’, ‘I am exposed’ – to imagination, exploration, experimentation and creation. It is along this open path that wayfarers create or search for opportunities and find solutions to difficult problems.

Open innovation, with its cultural attributes, is the zeitgeist of the twenty-first century, characterized as it is by its emphasis on the widest possible access to new knowledge and resources, with subsequent beneficial effects in terms of new entrepreneurial ventures. From it emerges a hybrid culture enriched by a wide range of options reflecting the various strands of open innovation. Among these are altruism and, alongside it, openness to experimentation by recourse to unorthodox and unconventional methods.

Experimentation in an open innovation environment involves a focus on exploration rather than exploitation. In the open space of exploratory experimentation, experiment...