Open Innovation – how companies can learn from successful companies in the digital transformation process

C hatbots based on artificial intelligence, autonomously acting and networked robots as well as supermarkets without personnel are already reality. The possibilities to use new technologies are increasing day by day. While we as consumers appreciate the convenience of new technologies, the discussion of the digital transformation in companies deals almost exclusively with the negative side – the reduction of staff.

It is true that digitized and automated production requires fewer employees to accompany the manufacturing process. But this makes the many creative minds that design the products and continually develop new customer-centric business models all the more important in the future. This creativity is exactly what distinguishes people from an algorithm. The company must create the space for such creativity that makes real, market-changing innovations possible and must open itself up in order to learn from others.

Challenge for medium-sized companies

Germany has always been a country of thinkers and inventors, and thousands of patent applications, especially in manufacturing sectors, point to a good development. The current map of the largest innovators (Source brandeins) also shows almost 600 companies from all over Germany. The German SME sector is particularly strong and is home to many world market leaders. Most medium-sized companies are highly specialised and have been domiciling their own industry for many years. The foundation stone for the success of these companies is usually the inventive talent of the founders. It becomes problematic when the medium-sized companies rest on their success for too long and only produce incremental innovations. What was innovative was what made the existing products more efficient or more efficient. This development was supported by the protection of medium-sized companies by comparatively high barriers to market entry, but digitisation is increasingly breaking down these barriers. Today it can happen that a founder with an innovative business idea destroys the functioning business models of an industry, even though he has never been active in this industry before.

Open the Ivory Tower

This mainly affects medium-sized companies that do not have their own strategy department, that are constantly exploring the market and that are not sufficiently diversified. They run the risk of recognising a disruptive development only when they have already lost a large part of the market.

In order to avoid the danger of missing the boat, small and medium-sized enterprises must therefore take other paths in order to stay on the ball and keep pace with developments. An essential core competence of the future is the ability to cooperate! Above all, it is virtually impossible for medium-sized companies to keep all their creative resources in-house. Therefore, it is all the more important to open your organisation to the impulses from outside and to look beyond your own nose.

New technologies and a culture of open innovation

Digitisation enables completely new forms of cooperation and at the same time brings about cultural change in companies. With the Open Innovation approach, companies must open themselves at their most sensitive point in order to benefit from the experience and cooperation with others.

In concrete terms, the following steps can be taken to set up a modern corporate organisation:

1. create an ecosystem/network with other companies in which your employees can exchange ideas, explicitly including connections to start-ups and innovative founders. Virtual methods help to prepare the company’s knowledge in such a way that it is readily available to others. And for entrepreneurs this means that they are not afraid of losing control! Only employees who are allowed to think freely and creatively have the potential to develop completely new ideas and thus advance the company.
2. co-location, also look beyond your own nose with your research and development department. It doesn’t have to be the Innovation Center in the USA, but the probability that you will find the right partners for open innovation processes naturally increases if you expand the search radius.
3. support your employees in realizing new ideas, for example by setting up an internal startup incubator. Equipped with a budget and a time schedule, employees have the opportunity to develop their own ideas to market maturity. By means of a competitive design, this idea is subjected to a review from the very beginning.
4. create space for close customer centricity, for example in so-called co-creation centres. After all, the customer knows best what he needs and can integrate his needs perfectly into the development process. In joint workshops and on the basis of concrete projects, you always have an ear on the customer.

Where do you start tomorrow?

As shown above, disruptive innovations cannot be forced. They arise much more when your employees feel the freedom to come up with new ideas that are really wanted and welcome. By establishing innovation centers with external partners and cooperating, for example, with start-ups, a culture of open innovation can emerge.

Don’t lose any more time and ask your employees what kind of free space they want and what they think would be suitable support.