Fostering Open Innovation for Smaller Organizations

Fostering Open Innovation for Smaller Organizations


Just imagine the amount of effort Steve Jobs must’ve invested before coming up with the Macintosh- an outlier in the world of modern computing. When you consider his predilection for design and his ability to innovate, it’s possible that you downplay his achievement.

However, we know quite well that not all CEOs have an eye for designs as remarkable. In fact, it’s possible that no member of the organization does. Perhaps, your Steve Jobs is a consumer of your product. Is your firm receptive to his idea? Is there a voice for people like that? Aren’t you depriving the world of that Mac-ish innovation?

What is Open Innovation 

At the time when Amazon emerged as a retail giant, Jeff Bezos, the founder, set up a dedicated email address where customers of his service could table their suggestions and complaints. Even though he hired staffs to monitor the activity, he requested that they forward copies of the correspondence to him and he acted whenever he was needed. Jeff showed that he understood the concept (and importance) of open innovation even though the idea was not yet widespread at the time. This evokes the question, "what is open innovation?

Glad you asked.

Examples of Companies Employing Open Innovation

Three prominent companies adopting open innovation are discussed below.

1.General Electric

In the last decade, GE has spent over 17 billion dollars on research and development. This has brought about 232 billion dollars in revenue in the same time. None of this would’ve been possible if it wasn’t for their emphasis on open innovation. They have a platform which fosters collaboration between experts and entrepreneurs and these professionals leverage the opportunity to provide novel solutions.


Unlike Apple which adopts a closed innovation approach, the Samsung Accelerator program has been of immense benefit to the firm. With the program, designers, thinkers, and innovators are provided with office spaces, funds, and other aids in order to engender solutions to different challenges. There are four categories present at this Samsung Accelerator program.

  1. The Partnership
  2. The Ventures
  3. The Management and Acquisition
  4. The Accelerators

3. Procter and Gamble

P&G has a dedicated Connect + Develop website where the firm provides detailed information about their needs. Several third-party innovators get alerted and they go on to propose viable solutions to aid the company’s cause. Time and again, the company has attested to the fact that this initiative has yielded relevant products.

How Can a Small Company Foster Open Innovation

You might be wondering, “But all these companies are big and established, how can my small firm adopt a similar approach?” It is true that a plethora of the information about open innovation only applies to large companies, however, this doesn’t rule out the possibility for small companies.

Open innovation is applicable to small startups and it has potential to yield positive results. Before you get started though, here are a few things to consider.

Things to Consider

The Amount of Information You’ll Share

Open innovation involves you being open about your company. If you run a Japanese restaurant, you might be required to give up your special sushi recipe to others. Usually, there’s the fear that if you divulge your production and marketing strategy, your competitors might act on it to your detriment. Is this a risk you’re willing to take? 

How to Reward the Contributors

Your customers (the loyal ones) will naturally provide feedback and suggestions on how to make the product better. They usually do this without expecting any kind of reward. However, other parties such as suppliers or researchers who you collaborate with might not be so nice. They believe that their idea is instrumental in helping you achieve a breakthrough. How will you compensate them?

How to Get Started

Alright, here we go.

Create a Suggestion Website

A website which is accessible by the public will prove useful in getting a myriad of suggestions and tips. Usually, these tips are from concerned customers who need to see the product improve. The problem with this is the sorting. Sometimes, you might have 70% of the suggestions on a trivial matter. This might make you miss more important ones.

Launch Public Competitions

This method is as old as time, yet it works every time (no pun intended). The initiative was popularized by the Ansari X prize which rewarded any team which could successfully launch 2 space vehicles into space within 2 weeks. Now, such competitions are ubiquitous and the range of prize is between $5000 and $1,000,000.

Ask Professionals for Help

You can also seek the help of a select few and invite them to a brainstorming session. These participants are usually people of expertise and they might have a thing or two to gain from the session.


It goes without saying that open innovation suits every company perfectly. It offers several benefits, most especially, the fresh perspective needed to address your company’s peculiar needs. However, consider the aforementioned factors before you decide to adopt the strategy.

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