Prof. Frank Piller, 40, has held the Chair in Technology and Innovation Management at RWTH Aachen, Germany, since 2007. Prof. Piller received his doctorate in business administration in Würzburg and led the Customer Driven Value Creation research group at Munich’s Technical University. Until his appointment in Aachen, he was a Research Fellow at the Sloan School of Management at the Massachusetts Institute of Technology in Boston, Massachusetts.
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What is open innovation?
Piller: "OI" represents a completely new way to organize the innovation process. Instead of a company relying exclusively on its own R&D capabilities, it calls upon the assistance of external problem-solvers and integrates them into the innovation process. As a result, developers use the outside world to enhance their potential for innovation. In this way, companies acquire expertise and solutions without huge expenditures. This applies to B2B as well as to consumer products. Companies use OI to ensure that their products meet the needs of customers, thereby lowering the risk of flops. They specifically ask what customers want, or they might even actively include them in the development of a product - for instance with traditional idea competitions.
Doesn’t OI endanger the intellectual property rights of the developer?
Piller: OI operates within the existing patenting process as long as the rules of the procedure are properly defined, such as with nondisclosure agreements or waivers of rights. But companies aren’t the only ones to have these concerns. Today most amateur inventors are glad to be actively involved in the development of a product, in exchange for waiving rights. But over time, they will become more assertive, and a company will then have to allow them to enjoy a share in the success of a product.
Who practices open innovation?
Piller: Often it’s companies that lack a large corporation’s development capacity. But big companies have discovered OI too. Hewlett Packard (HP), for example, runs its own OI platform on the web - the "Idea Lab." With its "Emotionalize your Light" idea competition, Osram generated new design ideas for lamps and created a best practice in Germany. But even if used internally, OI can represent a great opportunity, especially for companies that operate worldwide and have lots of inhouse expertise - like Siemens. In this case there aren’t any problems with confidentiality or patents because everything stays within the company. Researchers from a wide variety of departments who might otherwise never meet can use OI to pool their knowledge and quite easily create synergy effects. At present, only a few companies are making use of this OI potential in a systematic way.
Can OI replace the traditional in-house approach to development?
Piller: No, OI will complement the traditional approach by offering very efficient development alternatives. It will probably take several years before it becomes firmly embedded in innovation processes. It’s the same as with many new approaches to management - they’re discussed with great enthusiasm and then not implemented on a broad basis for five or ten years.