Open Innovation

"Open Innovation is a concept coined by Henry Chesbrough (Chesbrough 2003, Chesbrough 2006) recognizing a change in how businesses innovate. Open Innovation is a paradigm that assumes that firms can and should use internal as well as external paths to market, as the firms look to advance their technology" (Chesbrough 2003). The central idea behind open innovation is that, in a world of widely distributed knowledge, companies cannot afford to entirely depend on their own research, but should instead involve their customers in the innovation/development process.

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Open Innovation

Source: Chesbrough, H: Open Innovation Renewing growth from Industrial R&D 10th Annual Innovation Convergence, Minneapolis, Sept. 27 (2004).

Customer integration into innovation process refers to the involvement of customers into the design and development of new products and services. Customers can give input across the entire innovation and life cycle of a product or service, e.g., in the form of ideas, concepts, or prototype evaluations. These customer inputs can be generated by companies through different customer integration methods such as idea competitions, concept testing, toolkits, customer interviews, surveys, or lead user workshops (Dahan and Hauser 2002; Füller et al. 2014; Zogaj and Bretschneider 2012).

To read about the various available customer integration methods click below

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Companies increasingly embrace the notion of open innovation as means of overcoming some of the competitive and market pressures that they face. Some of the advantages of integrating customers into the innovation process are:
1. Superior services, aiming to achieve unique benefits and improving the value for the users.
2. Reduction in cycle time
3. Training the users
4. Accelerating the acceptance of the product/services in the market.
5. Building lasting relationships with users
6. Better management of costs (not necessarily reduction)

Source: Alam, I. (2002). An Exploratory Investigation of User Involvement in New Service Development. Journal of the Academy of Marketing Science, 30(3), 250-261

To read about the experiences of other managers/other experts in integrating their customers and using customer integration methods, please click below