Bringing open innovation to services

MIT Sloan Management Review

Volumn 52, Issue 2, 2011, Pages 85-90

  Chesbrough, Henry ^a  

^a UNIVERSITY OF CALIFORNIA   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 79952353106     PISSN: 15329194     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (13)

1. OECD, "Productivity Growth in Services", in "OECD Factbook 2008: Economic, Environmental and Social Statistics" (Paris: OECD Publishing, 2008).
2. See also A. Wölfl, "The Service Economy in OECD Countries: OECD/Centre d'études Prospectives et d'Informations Internationals (CEPII)", OECD Science Technology and Industry Working Papers, working paper 2005/3, OECD Publishing, Paris, February 11, 2005.
3. M. E. Porter, "Competitive Advantage: Creating and Sustaining Superior Performance" (New York: Free Press, 1985), 37.
4. Levitt's famous comment is mentioned in C. M. Christensen, S. Cook and T. Hall, "Marketing Malpractice: The Cause and the Cure", Harvard Business Review 83, no. 12 (December 2005):74-83.
5. For Drucker's quote, see P. F. Drucker, "Management: Tasks, Responsibilities, Practices" (Oxford, United Kingdom: Butterworth- Heinemann, 1999), 57.
6. For an introduction to co-creation, see C. K. Prahalad and V. Ramaswamy, "The Future of Competition: Co-Creating Unique Value with Customers" (Boston: Harvard Business School Press, 2004).
7. H. W. Chesbrough, "The Era of Open Innovation", MIT Sloan Management Review 44, no. 3 (spring 2003):35-41 (Pubitemid 40830200)
8. and H. W. Chesbrough, "Why Companies Should Have Open Business Models", MIT Sloan Management Review 48, no. 2 (winter 2007):22-28.
9. See also H. W. Chesbrough, "Open Innovation: The New Imperative for Creating and Profiting from Technology" (Boston: Harvard Business School Press, 2003).
10. Eric von Hippel at MIT has done some fascinating work on "user toolkits." The example of LEGO given here is quite consistent with this work. The basic concept is powerful and simple. Users are creative and innovative themselves. Organizations simply need to give them the tools to create exciting possibilities, and let the users loose to modify and recombine as they wish. This is a powerful way to tap into innovation possibilities that traditional market research might never uncover. A moment's reflection, however, helps us realize that users cannot be simply turned loose; instead, they need to be directed to focus on particular areas within certain boundaries. This is where the toolkits come in. The toolkits package your possible service offerings into different items that users can "mix and match" as they wish. But, by confining the users to the items available, you can place some limits on what users do with these possibilities. Toolkits thus put certain boundary conditions on these variations, so that they remain feasible to produce and safe to consume.
11. See E. von Hippel, "Perspective: User Toolkits for Innovation", Journal of Product Innovation Management 18, no. 4(2001):247-257. (Pubitemid 32535395)
12. For more information on IBM's savings from its research in services, see H. Chesbrough, "Open Services Innovation: Rethinking Your Business to Grow and Compete in a New Era" (San Francisco: Jossey-Bass, in press).
13. i. Porter's value chain diagram differs somewhat from this simplified chart based on it. However, he includes the same sequence of processes - from left to right - of inbound logistics; operations; outbound logistics; marketing and sales; and service. For Porter's actual value chain diagram, see Porter, "Competitive Advantage", 37.