June 26, 2009

UI guru quoted on Apple open innovation

Karim Lakhani was quoted Thursday in the FT for his knowledge of user innovation, although (perhaps ironically) it was in an open innovation context.

Karim certainly well known among user innovation researchers, one of two recent PhD graduates (along with Sonali Shah) of Eric von Hippel who’s spreading the UI flame (along with countless German apostles being churned out by the minute). He is very active and gregarious as an academic entrepreneur, whether it be a conference, a book project or merely co-authoring a paper or case study. (Karim and Eric are also on the advisory board of InnoCentive, a Boston-area firm shamelessly trying to commercialize crowdsourcing.)

Karim (like Sonali) is a personal friend, initially because of our overlapping open source interest which was kindled by the 2004 open source conference that Karim helped organize. Karim is also a co-author, on the basis of a paper we wrote last year about the under-studied role of communities as a level of analysis in user innovation and open innovation research.

In fact, at OUI 2009 earlier this month, a presentation by Oliver Alexy of LBS (on UI/OI co-authorship linkages) said that West-Lakhani collaboration made the two of us the only linkage between two major communities of UI/OI researchers. As with another paper Karim wrote with Lars Bo Jeppesen, this makes Karim (and his two collaborators) a boundary spanner, or in social network terms a cut point with high betweenness centrality. (As someone strongly identified with OI, I’m working on another collaboration to increase the personal and citation ties between the UI and OI communities.)

All of this is a long introduction as to why I was pleasantly surprised to see Karim’s name mentioned in the FT piece. To quote it, I thought I’d look it up on Google News, so here’s the quote that it provided:
“Hay una explosión de conocimiento en todo el mundo, y las empresas tienen que incorporarse a las redes para participar del flujo. Los muros que solían separar a las firmas del mundo exterior tienen que ser derribados”, explica Karim Lakhani, un profesor de Harvard que estudia las redes empresariales.
I’m guessing that Google didn’t see the real FT article behind its paywall, which is why only the Madrid partnership with FT is available free. Here is what UK (and US) readers of the column by “chief business commentator” John Gapper saw:
“There is an explosion of knowledge around the world, and companies have to embed themselves within networks to participate in the flow. The walls that used to separate the firm from the outside world have to be brought down,” says Karim Lakhani, a Harvard professor who studies corporate networks.
In other words, companies like Threadless harvest outside knowledge and others ignore it at their peril. In fact, on the day the FT article appeared, Karim tweeted:
Teaching @threadless case to SVMP http://www.hbs.edu/mba/svmp/in 14 mins - should be fun
To be polite, the actual Gapper article was a bit hard to follow. Let me see if I can summarize it in a more coherent form:
Apple has embedded itself in a mammoth value network of third party software suppliers that dramatically increases the utility of its iPhone. Competitors like Google and Palm may be able to match its product capabilities [debatable], but they have yet to match its market size.

If even the proprietary and secretive Apple does this, it proves that firms need to work with other firms to create success. This illustrates the point of Prof. Lakhani that knowledge is widely dispersed and firms need to work with others to harvest the benefits of that knowledge.
Since these app store contributors are mostly trying to (directly or indirectly) trying to sell products rather than scratching their own itch, this is more of an OI story than a UI story. Still, many of the principles that motivate firm cooperation with UI are also directly applicable to opening to OI.

June 22, 2009

What's so open about open innovation?

Although this was the 7th year for the User Innovation workshop, it was only the second year in which open innovation was explicitly listed as a topic in the CFP. Although last year’s workshop at Harvard was officially the “User and Open Innovation” workshop, it felt a little awkward being there as a keeper of the open innovation flame, as many of the “open innovation” papers were not consonant with the Chesbrough definition.

This year, there were more papers on open innovation (as defined by this blog) and the user innovation researchers seemed more open to open innovation researchers and their participation.

That said, there is still a gap between how Chesbrough used the term “open” and how other researchers on distributed innovation use the term. For the latter, “open” is often a synonym for free, as in the communitarian (or communal) mindset of the Free Software movement. Much of the research on user innovation examines cooperative user production of goods that parallel Free Software.

Since I’ve done a fair amount of research on open standards and open source, I’ve been long aware that the “open” in open innovation is different. In fact, in a 2007 paper in First Monday (based on an earlier conference presentation) contrasting these phenomena, I wrote
A lot of open source and open standards participants wonder what’s “open” about “open innovation.” After all, both of the former have a shared or public goods element to them, whereas a prime goal of open innovation (as defined by Chesbrough, 2003) is that firms have a way to capture a private return. In fact, in West and Gallagher (2006) I argue that the purest forms of open source or free software (such as Project GNU) are specifically not open innovation. …

Open innovation is not “open” like the other two. If anything, open innovation brings a note of realism to the discussion of open standards and open source, by putting the profit motive front and center. …

Conversely, open standards and open source provide existence proofs for building effective institutions that align and coordinate the interests of potential competitors. For example, the open source license provides a “credible commitment” to make it less likely that commercial interests will under–invest in specific technologies.
Still, there is a ways to go to bridge the open innovation and user innovation research communities.

At OUI 2009, someone more savvy than I remarked to Eric von Hippel that he did not use the term “open innovation” in his 2005 book Democratizing Innovation, but instead “open and distributed innovation.” If you search the PDF, the phrase appears 3 times and “open innovation” not at all.

I briefly discussed the boundaries of open innovation with Prof. von Hippel at OUI 2009, who said that his use of “open” referred to free information and said the Chesbrough usage was more about “IP markets.” I replied that the “open”-ness of open innovation was as in permeable firm boundaries of “open systems” theory (think Dick Scott and his book dating back to 1981).

When I asked von Hippel about user innovators who charged for their innovations — as in his paper from the Statistics Canada survey — he said that by his definition that was certainly user innovation, but not “open.” As suggested by his 2005 book, von Hippel’s interests today lie in users solving their problems and sharing those solutions, more than the commercialization of user innovation (which in some ways is more consonant with the open innovation paradigm).

For me, this is additional motivation (as if I needed any) to publish my work with Marcel Bogers contrasting user and open innovation. These communities of researchers (and their corresponding phenomena) have important overlaps, even there are important differences (which is why they are separate theories).

June 16, 2009

Cumulative, open and user innovation (III)

At OUI 2009 earlier this month in Harburg, I presented my own research in the open innovation track. It was an extension of the research that I presented at EURAM 2007, UOI 2008 and AOM 2008 that contrasts cumulative, open and user innovation.

This year’s presentation reflected my subsequent investigation on the similarities and differences of these three bodies of work, joined by my new co-author Marcel Bogers (now of U. Southern Denmark). I first met Marcel in 2007 when he was a PhD student (under Chris Tucci) at EPFL, where he did his dissertation on user innovation. Marcel organized the excellent AOM workshop last year on open and user innovation, and we are finding that the contrasting perspectives were very helpful in making sense of these overlapping but distinct literatures.

One of the things that we noticed was that the various literatures (and studies of related topics) have varying definitions of “innovation.” We temporarily agreed to defer this question but probably will have to come back and address it more precisely before we are done. The definition of success was a little easier, since user innovation is clearly about the creation of innovations, cumulative innovation is about technological progress, while open innovation is firmly about profit.

All three literatures assumed that knowledge is widely dispersed, but differ in other areas. Cumulative innovation (at least in the Nuvolari and Scotchmer sense) is like open innovation in assuming a profit motive, while much (if not most) of the user innovation literature is about a self-interested utility motive. Conversely, open innovation largely depends on strong IPR while user and cumulative innovation assumes (or argues for) weaker IPR.

One of the ways the literatures differ is on their assumptions about the sources and flows of knowledge (whether that knowledge is disseminated in raw form or encapsulated in products or services). We tried to capture that with this value network diagram below:
Marcel and I do believe these three literature do have a lot in common and perhaps deserve a new term to represent the superset. (At OUI 2009, Nikolaus Franke suggested “distributed innovation” which seems as good as any.) Our thinking right now is at a preliminary stage, but as we flesh this out over the next few months, we hope to have more to share at the end of the summer.

June 5, 2009

Scratching an itch

Although I’ve read key works by Eric von Hippel and his disciples — particulary in open source — I wouldn’t consider myself a user innovation person. Certainly here at OUI 2009, I’m strongly considered as a disciple of the open innovation camp.

Sitting here in Hamburg at my second UOI conference, I’m getting plenty of opportunity to come up to speed on user innovation. Below is my sensemaking of the overall thrust of the UI body of research — in particular, my 5 stage of user innovation — and linking this to papers this week at OUI 2009 on each stage.

1. Creating tools
There is a large body of research on toolkits that enable individuals to create or modify the relevant artifact. (e.g. von Hippel and Katz 2002). But also other types of tools, such as those to manage communities and solicit contributions for crowd sourcing as with Threadless (cf. Ogawa & Piller, 2006).

One of the papers on tools this week was by Johann Füller and colleagues about idea generation/invention in Second Life. Obviously such tools are going to become more common in the field.

2. Finding the right users
Oversimplifying a little, the lead user literature focuses on finding the prototypical users, those who are best able to articulate needs and solutions on behalf of a large population. (Think early adopters of Everett Rogers or Geoff Moore).

A common way to find many users is through communities. These might be formally defined communities offline (e.g. the Harley Owners Group) or online (cf. Jeppesen & Frederiksen 2006). Or they might be a communities informally defined by their embedded social network ties — such as word of mouth, or the streak of weak ties.

In response to this, a provocative paper was that by Jacob Høj Jørgensen, who was trying to find lead users to develop energy efficiency ideas. He contrasted users that participate in communities with users that are not embedded (which he called “hermits”). He used a clever approach to find the latter — bribing (with chocolates) people at a tech support center to save the contact information of particularly knowledgeable people calling for tech support on an energy saving hotline.

3. Getting Participation
Not all users will use tools: they may not have the interest, they may not be able to figure the tools out, they may not consider it worth their time.

One paper by Christina Raasch and colleagues tried to measure the cost/benefit of participation in a user community. Another paper on medical device user innovation — presented by Karine Lamiraud — said that organizations contributing user innovations depends on available resources; there is a nice tie here to the literature on the optimum level of slack to allow producer innovation (Nohria& Gulati 1996).

4. Generating Quality Ideas
Most of the studies seem implicitly assume that ideas generated are good ideas. (Or, perhaps to be more fair, if there are lots of ideas, a certain percentage will be of high quality and high value). Still, I have not seen anyone explicitly study the tradeoffs between the quantity vs. the quality of ideas generated — it seems like an obvious opportunity.

5. Bringing Ideas to Market
Users solve their own problems, and in the classic von Hippel formulation they put these solutions back in the hands of the producer: the producer (if savvy) then incorporates the most general of these innovations available to a broader audience.

Sometimes they are happy just to keep the changes to themselves. Frank Steiner talked briefly this week about how “embedded toolkits” allow users to customize products after they buy them: these user innovations (think iPhone app choices) are highly personalized and dynamics.

More recently, researchers have looked at users getting frustrated about innovations not coming to market, and thus we have the field of user entrepreneurship (cf. Shah & Tripsas, 2007).

Lars Bo Jeppesen, Lars Frederiksen, Why do users contribute to firm-hosted user communities? Organization Science, 2006. DOI: 10.1287/orsc.1050.0156

Nitin Nohria, Ranjay Gulati, Is slack good or bad for innovation? Academy of Management Journal, 1996.

Sonali K. Shah, Mary Tripsas, The accidental entrepreneur: the emergent and collective process of user entrepreneurship, Strategic Entrepreneurship Journal, 2007. DOI: 10.1002/sej.15

Susumu Ogawa, Frank T. Piller, Reducing the risks of new product development, Sloan Management Review, Winter 2006

Eric von Hippel, Ralph Katz, Shifting innovation to users via toolkits, Management Science, 2002.


June 4, 2009

Open innovation: structure vs. culture

At OUI 2009, Katharina Hoelzle of Technische Universität Berlin presented a potentially ground-breaking paper on open innovation. It was presented as a 3-minute abstract of an “ongoing project” — which means no data yet, and not a lot of details.

Working with her professor Hans Georg Gemünden, Hoelze argued that there are two key dimensions of firm readiness for open innovation
  • Structural: networks, process, instrumens, contracts
  • Cultural: incentives, barriers to innovation, actors (either champions or promoters)
The success of firms is thus the combination of success on these two dimensions, moderated by contingency factors (which weren’t specified).

She presented a two-dimensional plot that shows how a firms can be classified on these two dimensions. (Here shown as a 2x2 rather than continuous values along each dimension):

Open Innovation department
“True” Open Innovation
No open innovation
Open Innovation mindset

I would label it slightly differently:

Open Innovation department
Integrated Open Innovation
Closed innovation
Open Innovation mindset

Either way, this nicely captures my observations about firms and their failure to implement open innovation. Some firms seem driven by the structure; some firms acquire an innovation hotshot (or make a convert) without doing anything else to make it happen. It takes both to sustain a successful open innovation strategy.

June 3, 2009

OUI: Year Seven, Day One

The first (half) day of OUI 2009 here in Hamburg is now completed. This was just the tease — authors presenting 3-4 minute previews of their papers (about half of the papers were teased this afternoon).

Nikolaus Franke — host of the first User Innovation Workshop in 2003 — has attended all seven workshops and recalled the list from memory:
  1. Vienna: Wirtschaftsuniversität Wien (WU)
  2. Munich: Ludwig-Maximilians-Universität München (LMU)
  3. Cambridge, Mass.: MIT Sloan
  4. Munich: Technischen Universität München (TUM)
  5. Copenhagen: Copenhagen Business School
  6. Boston: Harvard Business School (the first “User and Open Innovation Workshop”)
  7. Hamburg: Technischen Universität Hamburg-Harburg (TUHH)
This year there were 110 registered attendees (21 of which did not arrive in the first day). This is only slightly smaller than last year’s record participation at Harvard — 137 participants. However, there are a greater proportion of in progress papers: 31 completed and 44 in progress, versus 55 completed papers last year.

As always, the man most in demand was Eric von Hippel of MIT, the founder (godfather) of the user innovation research movement. It seemed as though during every break he was surrounded by friends and admirers, old and new.

Being in Germany, we had a number of delegations of innovation researchers (mostly Ph.D. students and post-docs) funded under the German system, headed by a chaired professor: Nikolaus Franke of WU, Georg von Krogh of ETH Zürich, Frank Piller of RWTH Aachen and Cornelius Herstatt of host TUHH. Dietmar Harhoff of LMU wasn’t here but some of his team was.
When von Hippel asked for newcomers, about ¼ to 1/3 of the hands went up, with pockets from Aachen, TUHH and TUM in Germany; WU, U.K. Sweden in Europe, and Japan, Korean and NZ from the other side of the world. (There was one newcomer who travelled from the US: Jing Zheng, a mechanical engineer from Washington University in St. Louis).

No full papers yet — most are tomorrow, including my own (more later).

June 2, 2009

OUI 2009 opens tomorrow

The 7th User and Open Innovation Open and User Innovation Workshop is being held this week in and near Hamburg, Germany. (Actually, it’s the 2nd OI+UI workshop but the 7th UI workshop).

The workshop begins Wednesday at 1230 at the University of Hamburg. Sessions Thursday and Friday are at the Technischen Universität Hamburg-Harburg (TUHH), which as its name suggests, is in Harburg near Hamburg.

I’ve posted the complete list of papers to a permanent HTML page, and will be blogging on some of the sessions later this week.