How Do Companies Respond To Crises Using Open Innovation

Since the dawn of the coronavirus crisis, something surprising happened in the corporate culture that had never happened before. Companies across the world came together to work openly and to create value out of an opportunity to earn money in a way that has never happened before. For instance, the German company named Siemens introduced an additive manufacturing network for anyone who requires assistance in medical device designing. Similarly, Scania has directed around 20 highly trained logistics and purchasing experts to locate, purchase, and deliver personal protective pieces of equipment to frontline workers, along with converting trailers into mobile testing stations.

Open innovation in times of crisis has been studied inside classrooms for many decades, but it is now that it has been implemented so vividly to save human lives. Previously companies used to conduct hackathons and other types of open innovation events to give platforms to creative ideas which unfortunately never used to get implemented, leading to frustration among partners and employees.

The concept of open innovation primarily originated in the famous research and development Labs. The idea was coined by Henry Chesburough, a UC Berkeley business professor, who said that companies would ultimately have no choice but to accept this concept to survive in this fast-paced, changing world. one of the primary advantages of open innovation is speed. When well-equipped corporate open innovation labs develop startup characteristics, they bring several operational advantages to the situation in times of crisis in financial and human resources.

We can observe the benefits of open innovation in real-time today as we see various pharmaceutical companies coming together to take advantage of technology and platforms to invent antiviral remedies, vaccines for the COVID-19 virus. It might occur to individuals that open innovation might replace the importance of traditional research and development processes, but it is not the case in reality.

The motive behind open innovation is to improve the company’s entire innovation effort by taking advantage of external partnerships, strategic alliances, and startup ecosystems to make progress in a particular corporate project.

Open innovation can expand the space for value creation by allowing different ways to create value by introducing new partners with additional skills or revealing hidden powers of existing professional relationships. In a crisis, open innovation helps institutions find improved ways of solving the current problem by creating new collaboration and establishing a positive reputation.

Below mentioned are certain ways in which companies can overcome hurdles through open innovation.

Leveraging Two-sided Motivation

In the beginning, open innovation may seem quite exciting, but once that excitement settles, companies realize that they need to depend on the active and voluntary involvement of their partners and employees and the traditional chain of command to succeed in it. Instead of doing the former, companies should apply a combination of soft and hard incentives to motivate Their employees and partners to work better.

Bring in new partners

The next challenge is to introduce a new partner for open innovation. New partners mean additional pause, compliance, validation, effort in forming social relationships, etc. Surprisingly the massive spread of the coronavirus crisis has made top management personnel accept some risks associated with new partners by sending messages like ‘open innovation is a new way.’ Secondly, the widespread coronavirus has increased the possibility of having new potential partners for companies. Since this time companies across the globe are trying to find new ways to conduct business, they are encouraged to find greater, better, and new kinds of partners for their businesses.

There Is An Urgency All Over The World That Is Leading To Transformation

In normal situations, the steps involved in open innovation are highly elementary. For instance, companies hire few consultants to set up an innovation campaign or tournament and wait for new ideas. As a result, the outcome is also very slow and ineffective. Open innovation, on the other hand, makes companies realize the transformation challenges present in the future. As a result, it often requires significant structural and operational changes in conducting businesses during a crisis. Companies put in extra effort to rethink and improve their research and development infrastructure.

For example, in the education sector, classes transformed from being conducted in the offline mode to the online mode almost overnight. Individual teachers across the world are hesitant and trying to figure out the process. But University heads and presidents were sending reassuring messages to promote experimentation and solve problems regarding such online classes. Now, digital teaching platforms have become well-adapted and easy to use by both teachers and students. It is proof of the fact that often the biggest crisis can lead to the most successful innovation.

Open innovations in the past have brought many significant developments across industries. Still, the question at hand here is how many of these altered and innovative ways will stick with these companies once things go back to normal. We hope that COVID-19 has taught the corporate world the importance of creativity, speed, and strength to address the greatest challenges.