[p2p-research] changing from out outside in

[Michel Bauwens]

Here's an excerpt fron an interview with von Hippel that discusses how
organizations change ..

kind of an update to my response to Ryan ...

see
http://www.deloitte.com/view/en_US/us/Insights/Browse-by-Content-Type/deloitte-review/article/7930c99d77ea2210VgnVCM200000bb42f00aRCRD.htm



*How successful and willing have firms been at taking the lessons learned
from your research on user innovation and open source development?*

Basically I haven’t seen an industry that changes from closed to open
voluntarily. It is very difficult for firms to make that shift. Closed
business models that have been in place and successful for a long time tend
to become nearly unchallengeable. Things really have to fall apart before
basic change is seriously explored. We are seeing this kind of disruptive
situation nowadays among media companies, for example, and it has occurred
elsewhere earlier.

For example, consider custom semiconductor design. In that field, the
business model in the early 1980s was that manufacturers designed chips *for
* users. Chip users were eager to design their own custom chips, but
established firms in that field like TI and Fujitsu were adamant about not
giving design tools and design freedom to users. Finally a start-up company,
LSI, did transfer design freedom to users, and customers flocked to work
with that firm. Only when the larger firms saw this to be a serious
challenge — and saw a successful new business model actually demonstrated by
LSI - did they switch over to the new, user-centered design model that is
dominant today.

*What are the typical challenges faced by firms trying to develop those kind
of innovation capabilities, and how do they actually overcome them?*

The chief problem is that there is a lot of investment bound up in a closed
innovation model for firms that now use such models, and the investment is
both individual and corporate. Much of this has to get thrown away or loses
value when firms shift from closed to open innovation models. People
naturally and reasonably resist destruction of value they own, especially if
it is personal. For example, R&D employees often resist being asked to look
outside for innovations. They may well view the outside as a competitor; as
a rival: “If we ask outsiders to help with our job, our managers may think
that we are dispensable. Let’s not do that!” Similarly, marketing research
people who look for unmet user needs via surveys and focus groups find a lot
of their tools are at risk of becoming obsolete if users become the
innovators. And internal patent attorneys who are told that open IP can be
more useful than patents — well, let’s not even go there. [laughs].

The challenge firms face is to make clear to their employees that they are
still needed and can provide major contributions and have major job
satisfaction in the new model. Firms also need to provide a clear transition
path. For example, internal product developers needs to know that there is a
lot they can contribute even if their firm switches to outsourcing prototype
development to innovation users. And this is the case. Internal developers
are essential to help create user innovation toolkits to enable and improve
user innovation relevant to their firm. Also, they are needed to convert
user-developed prototypes into robust commercial products via product
engineering.

Lego offers a good example of a smooth transition. Lego is a
long-established Danish firm. Within that firm there were maybe about 20
people who were looking at a new, open model of new product development. Top
management protected them, encouraged them, and they are managing to build
within an old firm a new way of doing things that is gradually making a
transition for the entire Lego company. But that’s a really remarkably
smooth and excellent transition. The transition to open can be done without
major disruptions, but it’s not easy.

*Are there any industry sectors where user innovation would be difficult to
put into operation just because of the nature of the business?*

It’s not really a matter of sectors. It is more about: “the greater the
investment in the old, closed model that is at risk, the more difficult the
transition to new, open models.” For example, if a firm has never had R&D or
never had a major investment in patents and patenting, it does not face
those retooling losses, and so will have an easier time switching to open.


-- 
Work: http://en.wikipedia.org/wiki/Dhurakij_Pundit_University - Research:
http://www.dpu.ac.th/dpuic/info/Research.html - Think thank:
http://www.asianforesightinstitute.org/index.php/eng/The-AFI

P2P Foundation: http://p2pfoundation.net  - http://blog.p2pfoundation.net

Connect: http://p2pfoundation.ning.com; Discuss:
http://listcultures.org/mailman/listinfo/p2presearch_listcultures.org

Updates: http://del.icio.us/mbauwens; http://friendfeed.com/mbauwens;
http://twitter.com/mbauwens; http://www.facebook.com/mbauwens
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://listcultures.org/pipermail/p2presearch_listcultures.org/attachments/20090730/1b6a7845/attachment.html>