What are the key factors to consider when choosing an open innovation and IP strategy framework?

The business model acts as a foundation for Open Innovation Strategy. Organizations must carefully consider these interdependencies to leverage open innovation effectively and achieve their desired innovation outcomes.

I have been in Open Innovation (OI) in MNCs, investment firms, and startup accelerators. Strategy still has only two categories: 1. Cost-based leadership 2. Differentiation based leadership Irrespective of whether a company follows a cost-based or differentiation strategy. Open Innovation (OI) requires the firm to pursue a differentiation-based strategy. Firms operating under a cost-based strategy can take the middle path of a cost-based differentiation strategy. Open Innovation helps the firm achieve a competitive advantage through differentiation. It is the middle path between internal R&D (Build) and external M&A (Buy). It is co-creation in its truest sense. i.e corporates sharing risks along with the startup.

Understanding your business model is crucial in shaping your open innovation and IP strategy framework. It dictates how you generate value and the extent to which you need to protect your core competencies and competitive edges. The nature of your business model will guide you in choosing the right level of openness and IP protection, whether you need a more closed and defensive approach or a more open and collaborative one. Balancing protection and collaboration ensures that while you safeguard your essential assets, you also foster partnerships and co-creation with external entities. This alignment between business model and IP strategy is vital for sustainable innovation and competitive advantage.

The readiness for open innovation among different industries may vary. Industries operating in the knowledge economy are more enabling when it comes to open innovation Irrespective of the industry, open innovation, by its very nature, is co-creation and very different from closed or protective innovation, which is traditionally internal R&D. Generally, the innovator (startups) needs to hold the IP, while the enabler (corporate) may play an integral role.

Industries such as pharmaceuticals or aerospace, which are heavily regulated, require stringent compliance and robust IP protection to navigate complex legal landscapes and safeguard investments. Conversely, sectors with less regulatory oversight, like consumer electronics or software, can afford to be more experimental and open in their approach to innovation, leveraging more collaborative IP strategies to drive rapid development and market entry. Evaluating the technological trajectory and potential for disruptive innovation in your field can guide whether to prioritize defensive IP strategies or more open, collaborative approaches to stay ahead of emerging trends.

In my experience, Open Innovation goals are closely related to the Business Strategy and Model. However, they are more than just ambitious goals like radical and disruptive innovations, which are rare in reality. For companies pursuing a cost-based strategy, open innovation may be their first exposure to differentiation through innovation. Their objectives can be as follows: #1 Access to Talent, #2 Culture, New or Co-develop innovation, #3 Usage of enterprise platforms, #4 Access to new markets, #5 Solving problems (internal or external).

From a corporate point of view, the most important external partner is the startup. They are the innovators with which corporate partners. The startups on the other hand see Corporates as Market Access partners. Venture Capitalists see startups as the prize to chase, while they can see corporates from a market access point view to de-risk their investment risk. They can also see corporations as those who give them an investment exit. Depending on the goals of the corporations, some of the best pools that have ready access to startups are incubators, accelerators, and venture capital firms. If corporations pursue an ecosystem strategy, partnering with other corporations with complementary offerings would make sense.

Ultimately, it's people who drive innovation. The willingness to experiment (take risks), collaborate, and share knowledge becomes crucial. Technology is a force multiplier. Technology by itself will not innovate. How well data is captures, cleaned and organized will determine its effective usage. A risk-free budget will help Open Innovation give the team flexibility and security to take risks without the burden of showing Immediate ROI. Matrix structures are more conducive to Open Innovation than other Organizational Designs/Structures. As Peter Drucker quoted, 'Culture eats Strategy for breakfast'. This often overlooked but has huge influence on organizations. Without the agility to change and adapt organizations will struggle.

When choosing an open innovation and IP strategy framework, it's essential to assess the alignment with your business objectives and industry context. Understanding your internal capabilities, including human capital, organizational culture, technological infrastructure, and financial resources, is crucial as they determine your flexibility and control over the strategy. Additionally, consider the nature of your industry and the competitive landscape, as these external factors influence the potential risks and benefits of open innovation.

En mi experiencia hay que tener en cuenta los siguientes factores: 1. Capacidades internas de la organización 2. Naturaleza de la innovación buscada 3. Contexto industrial. 4. Recursos y socios externos disponibles