Shared Secrets – Entry #4: When Open Innovation Doesn’t Work

This is the fourth in the series on managing collaborative innovation. Click here for the Beginning of the Series

There is a grey area between early stage research and the market play where intentions start to emerge from new ideas but have not yet become committed strategies. It is the moment when champions begin to muster the willpower to take action but have not yet made specific plans or worked out all the gaps. This is a particularly difficult stage for sharing with outsiders. Open sharing is feasible at the fuzzy front end of technology R&D, where patenting and publishing help disseminate information about new discoveries. Likewise, open sharing is a natural function of the latter market play, where evangelists, marketers and sales people spread the word about the company’s new strategic direction. But at a crucial time when external insights could validate an emerging direction (or nip one in the bud) and when external know-how could make seemingly impossible plans suddenly feasible, we find ourselves often incapable of open sharing.

Being open with outsiders at this sensitive stage is like admitting the general public to an infant’s nursery. The intentions are as yet too fragile. Champions don’t know whether their idea will get internal support, and executives are loath to tip their hand before they commit themselves. Yet this is the very moment when collaborative business innovation must be engaged. Limiting the firm only to internal perspectives on budding directions leads to missed opportunities on one hand and dead-end market plays on the other.

Knowledge of a company’s emerging intentions gives the bearer great power over that organization, power to help and also to do outright harm. Once exposed to Adobe’s basic idea and business model dilemma (see entry #1), Steve Jobs could have developed another graphics language, if he intended, and used it in Apple products instead of collaborating. Patent protection would likely not have stopped this. In many fields, there are so many ways to approach a technical solution that the important thing is not the invention but the general concept. Often the sensitive knowledge is not the technology itself but simply the validation of knowing someone is considering a market play with it. In some cases, firms in developing economies needed only get the vaguest sense of what a prospective partner had in mind to build the offering on their own and start selling it themselves. Advocates cry for uniform intellectual property rules and enforcement in countries like China and India and forget that often what is appropriated would not be considered IP theft in the first place.

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[Click here for entry #5]

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