In the age of big bang disruption, inward-looking growth strategies can be risky. It comes as no surprise then, that there are a large number of companies turning to partnership with small high-tech firms to ensure faster and more effective innovation.
By directly engaging with outsiders – consumers, suppliers, universities and even competitors – large companies have been able to develop highly efficient innovation processes and differentiated products. However, a recent survey with 200 large companies and 200 small high-tech firms in China, India and the US showed that these open innovation initiatives are not delivering the hoped-for outcomes. Such failure has been caused by three types of unresolved “deficits”—strategic, operational and cultural gaps between the partners.
This research reveals how companies can close these deficits and succeed with open innovation. By following a three-step action plan, large firms can build awareness and openness within themselves, address partnership challenges, and tap into the larger ecosystem, and eventually transform themselves into active and successful open innovators.