Average Rating: 
Rating: - Open Innovation
Simply very good book exploring the new paradigm in the changing technological world.
Rating: - The importance of embracing open business relationships
In the field of technology change appears to occur at an ever increasing rate. Through innovation in research and development new breakthroughs occur, new products are brought to market, sales brings in money to fund research and the cycle goes on and on. At least this is the way that it is generally thought to occur. In reality hostile takeovers, IPO bids and the like keep interrupting the cycle. Companies refuse to look outside of themselves for innovative ideas or the application of their technology to new ventures. So the system is actually a closed cycle within the company instead of an open one the embraces the value of processes, people, and others outside of the company. Business innovations create potential but do not have value in and of themselves. It is the business model that turns innovation into profits. We have all seen inferior products bypass superior ones because of a better business model. Unfortunately for the consumer, it is not at all uncommon. So, the business model itself defines the profit received from an innovation. Why? Because the business model is the single most important factor in determining a suitable market for the innovation, costs, profit margins, and competitive position. The business model determines whether the company will take advantage of all opportunities including those outside itself or just utilize those opportunities that they can produce internally. The authors detail several case studies that point out the difference between closed and open innovation and the results of each very clearly. The finishing touch to the book is that it clearly details the path to open innovation and how to move a company from a closed mindset to an open one. This is a highly recommended read for anyone wanting to take advantage of technology to increase their profits.
Rating: - Open Your Mind, Open Your Company
As we have come to expect from Harvard's Professor Chesbrough, Open Innovation is a wealth of insight and knowledge in how organizations can transform themselves by blending the best of their internal know-how and external sources of perspectives. Beginning with an interesting historical vantage point, Chesbrough introduces us to innovation structures as they have evolved at the beginning of the twentieth century, through the establishment of central research & development facilities and beyond. It was historian Alfred Chandler who first researched the economies of scale that resulted from the internal research & development facilities. As it points out in the book, 'these R&D facilities were so successful in extracting more efficiency out of increased understanding that they created natural monopolies in many leading industries, or economies of scope'. But many erosion factors have weathered these fortresses of knowledge, and now Chesbrough maintains that innovations, however clever, are worth nothing until a viable business model is found to exploit them. The function of a business model, according to the author and colleague Richard Rosenbloom, is to: articulate the value proposition; identify a market segment; define the structure of the firm's value chain; estimate the cost structure and margin, describe the position of the firm within the value network and to formulate the competitive strategy of the offering. So invention is not enough. Organizations most follow the path to commercialization, but that route often means it must work collaboratively with many others. This approach has many ramifications on company structure and ways of working. It is hard for organizations (and their leaders) to work on having core-differentiated capabilities, while still being open with their value network. Therefore, this leads ManyWorlds to assume that those things, which are seen as true differentiators in mature companies, must move away from a specific product advantages and more toward process differentiating capabilities. While there is always a role for product innovators, the model they operate under is not usually scaleable, and companies often grow into either 'economies of scale' or 'economies of scope'. But finding and developing that all important part of the value network becomes a crucial skill in itself. Open Innovation is a truly excellent book that a review cannot do justice to. With detailed case studies on Xerox (and spin outs), Intel and examples from many other companies, Chesbrough has written an insightful and timely work that draws many threads together. Executives who want to explore how facets of innovation, whether internally or externally motivated, sourced or executed, would not find a better read than Open Innovation.
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