September 19, 2013

Magic 'open' pixie dust

Today and tomorrow I'm at the University of Bath for a two day workshop entitled “Strategizing Open Innovation.” The event was organized and hosted by the Strategy and Innovation Management Group within the School of Management, and included four keynotes and an open call for papers.

The first keynote came from California’s second most famous open innovation scholar. I have uploaded my slides to SlideShare, and will talk more about the content another time. Tomorrow, two participants from the June 2012 open innovation workshop in London — Teppo Felin (Oxford) and Letizia Mortara (Cambridge) — will offer their own insights into open innovation.

And then there was the second keynote this morning by Richard Whittington of Oxford, which was not about open innovation but about open strategy. It spurred a rather vigorous discussion.

When hearing the phrase “open strategy,” most readers would think of the 2007 Chesbrough and Appleyard paper in California Management Review which states:
If we are to make strategic sense of innovation communities, ecosystems, networks, and their implications for competitive advantage, we need a new approach to strategy—what we call “open strategy.”

Open strategy balances the tenets of traditional business strategy with the promise of open innovation. It embraces the benefits of openness as a means of expanding value creation for organizations. It places certain limits on traditional business models when those limits are necessary to foster greater adoption of an innovation approach. Open strategy also introduces new business models based on invention and coordination undertaken within a community of innovators. At the same time, though, open strategy is realistic about the need to sustain open innovation approaches over time. Sustaining a business model requires a means to capture a portion of the value created from innovation. Effective open strategy will balance value capture and value creation, instead of losing sight of value capture during the pursuit of innovation. Open strategy is an important approach for those who wish to lead through innovation.
The focus this morning was on openness not as an antecedent of open innovation but as an organization with permeable boundaries (open systems). In fact, during the discussion Felin cited Dick Scott’s Rational, Natural and Open Systems (1981) while Whittington also cited as an influence Karl Popper’s The Open Society and its Enemies (1945).

Many of the ideas about openness are ones I’ve published in the past, such as firms deliberately choosing openness (“How open is open enough?”) and selective degrees of openness (“…Open standards: Black, white and many shades of gray”). (The work of Joachim Henkel is also very relevant here). This is not to claim “I said that first,” but merely that elements have been out there before and the author (as would any author) bears the obligation to demonstrate that this framework tells us something new and interesting.

However, I am a little concerned that this is yet another example of “open” being used as magic pixie dust which can be sprinkled on anything to make it special. Whittington explicitly disclaimed any suggestion that openness is necessarily better — as when Apple has lost its ability to keep product introductions secret due to supplier leaks. Still, ceteris paribus, calling something "open" strategy implies that the "open" approach is better than the "closed" one.

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