Established model
Open innovation
Henry Chesbrough · 2003
Good ideas can come into a company from outside and go out of it to others, and both directions can create value.
Its place in the frameworkBusiness Core›Innovation
What it does
The older model kept research inside the walls and used only what fitted the existing business. Chesbrough’s observation was that useful knowledge is widely spread, so companies gain by licensing in, partnering and acquiring — and by letting unused ideas leave through licensing or spin-offs rather than sitting on a shelf.
- Reach for it when
- When the innovation pipeline depends entirely on internal ideas, and when promising work is being shelved because it does not fit the current business.
- Where it stops
- Openness has costs: protecting what matters, absorbing what comes in, and managing partners all take capability. Opening up without that capacity leaks value rather than gaining it.
Henry Chesbrough, Open Innovation: The New Imperative for Creating and Profiting from Technology, Harvard Business School Press, 2003.
Why it sits at Innovation
The capability to produce new offers, processes and business models: where ideas come from, how they are tested, and how each one is scaled into operation or stopped.
A model is only useful when you reach for it at the right moment. This one answers a question that arises here — so it is filed here, and nowhere else. These are the working areas it serves:
- Sources of ideasPeter F. Drucker, Innovation and Entrepreneurship, 1985, on the seven sources of innovative opportunity; Henry Chesbrough, Open Innovation, Harvard Business School Press, 2003, on ideas crossing the organisation’s boundary in both directions.
- ExperimentsEric Ries, The Lean Startup, 2011; Steve Blank, The Four Steps to the Epiphany, 2005, on customer development; Stefan Thomke, Experimentation Matters, Harvard Business School Press, 2003.
- Pipeline and gatesRobert G. Cooper, “Stage-Gate Systems: A New Tool for Managing New Products”, Business Horizons, 1990.
- Scaling or stoppingCharles A. O’Reilly III & Michael L. Tushman, “The Ambidextrous Organization”, Harvard Business Review, 2004; Barry M. Staw, “Knee-Deep in the Big Muddy”, Organizational Behavior and Human Performance, 1976, on escalation of commitment.
What it touches elsewhere
Nothing in a business is decided on its own. A conclusion reached with this model at Innovation lands in these other cores, whether or not anyone follows it there.
- Value PropositionA tested offer joins the value proposition at handover; from then on its jobs, claims and proof are kept there, not here.
- Long term goalsGrowth horizons decides how much effort each horizon receives; the innovation pipeline is one of the main things that allocation is spent on.
- Golden OpportunitiesExceptional external windows are recognised and seized there; one enters this pipeline only when it needs testing before it can be taken.
- Project managementOnce a gate funds defined work with an end, that work is run as a project there; the gate decision itself stays here.
- Core CompetenciesBuilding capability in general belongs to Core Competencies; innovation draws on competencies and sometimes reveals missing ones, without owning them.
- TechnologyThe technology estate and the use of AI are held under Technology; new technology appears here as a source of ideas and as something a test may need.
- Performance AnalysisThe statistical method for controlled experiments is kept in Performance Analysis; this object decides which assumptions to test and what result would change a decision.
Filed at the same place
These answer questions that arise at Innovation too. Where they disagree with this one, the disagreement is the useful part.
- The Lean StartupTreat a new offer as a set of assumptions to be tested cheaply, rather than a plan to be executed.
- Stage-gateWork proceeds in stages separated by decision points where a project can be stopped.
- EffectuationExperienced entrepreneurs start from the means they have, not from a goal, and let the goal take shape as they go.
Elsewhere in Business Core
- Tuckman’s stages of group development
- Belbin Team Roles
- Herzberg’s two-factor theory
- Jobs to be done
- The Kano model
- The value proposition canvas
- The business model canvas
- The Van Westendorp price sensitivity meter
- Value-based pricing
- Core competence
- VRIO
- The resource-based view
- The theory of constraints
- Lean thinking
- Co-opetition and the value net
- Transaction cost economics
- Stakeholder theory
- The power–interest grid
- DuPont analysis
- Break-even and cost–volume–profit analysis
- Unit economics
- The Kraljic Matrix
- The bullwhip effect
- The SCOR Model
- On-time in-full
- Overall equipment effectiveness
- Value stream mapping
- The three lines model
- ISO 31000 risk management
- Maslow’s hierarchy of needs
- Kotter’s eight-step change model
- Situational leadership
- Design thinking
- Porter’s value chain
- The McKinsey 7S framework
- Six Sigma and DMAIC
- Beyond budgeting
- Dynamic capabilities
- Intangible assets
- The four S’s of intangible investment
- Net present value and discounted cash flow
- The Modigliani–Miller theorem
- The pecking order theory
- COSO Internal Control — Integrated Framework
- ISO 37301 compliance management systems
- COSO Enterprise Risk Management
- Agency theory
- Mintzberg’s organisational configurations
- The Star Model
- Lewin’s change model
- The ADKAR model
- The technology acceptance model
- The NIST Cybersecurity Framework
- The TOGAF Standard
- Wardley mapping
- Failure mode and effects analysis
These are other people’s models, named here so you can go to the source and use them properly. The Omnigoal is not affiliated with their authors and is not endorsed by them; nothing of theirs is reproduced here — no canvas, no diagram, no wording. Each is described in our own words, with the originator credited, because the framework is a place to put thinking, not a replacement for the people who did it. Model names and trademarks belong to their respective owners and are used here only to refer to the work itself.
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