Open Innovation & Organizational Boundaries, in Institutions, Will it Blend? — HBS Working Knowledge | Innovation & Institutions, Will it Blend? |
Open innovation, enabled by low-cost communication and the decreased costs of memory and computation, has transformed markets and social relations.

As the authors illustrate, it will be challenging to manage contrasting modes of innovation, and that is exactly what is needed in organizations that expect to innovate and are systemically, culturally, not set up to help this happen. 


Open innovation, in contrast to firm-centered innovation, is radically decentralized, peer based, and includes intrinsic and pro-social motives.

The authors of this working paper use in-depth examples from Apple, NASA, and Lego to argue that open innovation will at least complement, if not increasingly substitute for, more traditional innovation modes.

This is within the contexts of increasing modularity and decreased communication costs.   (DN:  Just look at digital communication today.  Think ahead 4 months to 1 year of what's next.)

Emerging theories must be informed by these contrasting innovation modes and the implications for governance, incentives, intellectual property, managerial choice, professional and organizational identity, and organizational cultures.

Key concepts include:

  • Leaders and senior teams can take advantage of contrasting innovation modes, paradoxical organizational requirements, and associated dynamic boundaries.


  • Leaders need to execute strategic choices with the systems, structures, incentives, cultures, and boundaries tailored to open and firm-based innovation modes.
  • Multiple types of boundaries will increasingly be employed to manage innovation, from traditional to complex intra firm boundaries (such as ambidextrous designs), to webs of interdependence with partners and potentially anonymous communities.
  • Senior teams must build their capabilities to deal with contradictions as well as their organization's ability to embrance contradictions.  

A link to the full working paper, downloadable by Assistant Professor, Karim R. Lakhani & colleague is here.

Source:  Karim R. Lakhani is an assistant professor in the Technology and Operations Management unit at Harvard Business School.  

This link was also recommended by Jeffrey DeGraff at the University of Michigan Ross School of Business, and I also think it's right on, even if the language is quite academic.  It will make you think about your institutional systems, and refresh your vocabulary.    ~  Deb