Introducing “The Open Innovation Marketplace”
By Alpheus Bingham and Dwayne Spradlin
We are pleased to announce that our new book “The Open Innovation Marketplace: Creating Value in the Challenge Driven Enterprise” is now available, published by FT Press.
Over a year in the making, we worked to create a book which would appeal to business decision makers, innovation leaders, and strategists. Our premise is this: Firms must adapt to survive in the 21st century. In this new “normal”, business is global, distributed, dynamic, and fast paced. Markets are hyper competitive and you are only as good as your last business, product, or technology innovation. Execution is critical, but not sufficient to succeed. Business leaders must fundamentally rethink their strategies to become more agile, flexible, and innovative than ever – and the stakes couldn’t be higher.
Watch: Dwayne Spradlin discusses The Open Innovation Marketplace
We have divided the book into 9 chapters, grouped into two sections:
Chapter 1: “Introduction”
Every business and undertaking is based upon probabilities and portfolio management. Bets are made every day in every corporation, whether determining the next drug to develop in the pharmaceutical industry, building a factory, or choosing the next CEO. Understanding how to best manage those risks and maximize options is fundamental to good business management, which is particularly true in a world where constant innovation and smart risk taking is the new normal. Effective leaders must balance their resources between efforts of exploration and exploitation. Open innovation offers an enhanced toolbox for accomplishing these things. The purposes of the bets, the portfolios, and the risk management are to produce innovations that distinguish one company from another in the marketplace. To this end, all leaders must engage in meta-innovation — innovating on the way they innovate.
Part I: Challenge Driven Innovation
Chapter 2: “The Future of Value Creation”
Economics and business management have evolved considerably over the years. The seminal work of Ronald Coase and subsequent economic theorists help you better understand why firms developed the way they did — to drive efficiency and to minimize transaction costs. But the conditions that marked the business environment as we transitioned from the 19th to the 20th century are unlike those prevailing as we enter the next. This century brings with it not only a fundamental change in transaction costs, but also unprecedented pace, global markets, constant competition, connected customers, and the Internet. Businesses must re-architect themselves to drive innovation, agility, and time to market. They must rethink the metrics that guided them in the past. Value will be captured by the firms that adapt to meet the challenge.
Chapter 3: “A New Innovation Framework”
After a century of building institutions, the innovation function is costly, inflexible, dated, and undermanaged. As leaders you may have too readily convinced yourselves that innovation is inherently fluid and that applying any kind of process and measurement dooms the function to mediocrity, which could not be further from the truth. A channel-based approach is introduced that provides new predictability, risk management, agility, and metrics. It also capitalizes on a connected world of diverse skills lying outside the walls of the corporation. This innovation framework will be vital to new organizations and will challenge the status quo in traditional firms. Internal change will be necessary to effectively access that which is external.
Chapter 4: “The Long Tail of Expertise”
Key to building more flexible and innovative businesses will be the recognition that creativity, ingenuity, production capacity, and even raw materials exist everywhere and that businesses own, employ, manage, or are even aware of only a tiny fraction. Modern businesses will increasingly harness a traditionally untapped cadre of innovators, collaborators, and business partners to drive clearly superior returns. Their ability to effectively access the long tail will be not only vital to continued success but also essential to survival as competitors expand their access to creativity and problem solving potential.
Chapter 5: “The Selection of Appropriate Innovation Channels”
Building the capabilities to engage various “channels” for innovation will be critical to future business. Posing the right problems to the right groups is a decision-making endeavor that requires understanding the capabilities, benefits, and risks of each potential channel. In some cases multiple channels are advisable. Ultimately, effective channel and portfolio management go hand-in-hand and are the capabilities that will separate the leaders from the laggards.
Part II: The Challenge Driven Enterprise
Chapter 6: “The Challenge Driven Enterprise”
After examining the “Challenge” in more detail and exploring its unique ability to structure and focus human activity, we take the concepts from earlier chapters even further and introduce the Challenge Driven Enterprise. CDE provides nothing less than a future vision for organizations to drive innovation, agility, and better economics for doing business in the 21st century. It enables new modes of innovation, while creating the flexibility to capitalize on new business opportunities. Inherent in this approach is a remaking of the corporation to be more lean, efficient, and flexible which has significant implications. Industry leaders will be those that successfully apply these concepts universally, from business strategy to the manufacturing plant floor.
Chapter 7: “Transformation”
This chapter discussed the evolution of how modern firms are organized and the evolving “network” form that is replacing it. The powerful role of corporate culture in supporting or resisting the transformation is examined as well as the intense effort that goes into building new organizational structures. Key considerations for CEOs and business leaders are identified as they contemplate the change ahead. The level of effort and dedication required for most organizations should not be underestimated.
Chapter 8: The CDE Playbook
Essential strategies and tactics are brought together as a “playbook” to enable business leaders to initiate the transformation. Although every organization is different and at various stages in their evolution, the essential elements of a structured and comprehensive program are detailed, including: securing commitment, promoting early trial and adoption, virtualizing business strategy, establishing the CEO mandate, empowering the CDE Task Force, readying the organization, and selecting enablers and partners.
Chapter 9: “Leadership”
This, the final chapter, is written for the CEOs, leaders, and decision makers contemplating this course for their organizations. We will examine the inescapable need for change in this fast paced, global, hyper-competitive 21st century. And we will explore the unique and profound role of the CEO and key leadership in bringing the Challenge Driven Enterprise to life, invoking Joseph Campbell’s The Hero’s Journey as a guide. Finally, we will provide a few parting thoughts on the role of the CEO and legacy.
Nearly every chapter includes a case study, ranging from Open Innovation adopter P&G to NASA to President Obama’s Open Government initiative. Our goal was to challenge the status quo, provide a theoretical and practical framework for change, and inspire you to drive true transformation in your organization.
We hope you will enjoy this book as much as we enjoyed writing it!
Dwayne Spradlin and Alpheus Bingham
Note: portions borrowed from The Open Innovation Marketplace, copyright 2011, FT Press and the Authors.