In a paper produced by Richard Gabriel and Ron Goldman (CGEY) about the role of how communities can be part of the innovation process in the organization, they use the open-source software model to analyze the potential benefits for corporate application:
"We believe this strategy (the open source) is indicative of a more complex view of open source, in which individuals or companies join collaborative communities in order to mutually benefit from one another’s expertise. We call this strategy “Innovation Happens Elsewhere” (IHE)."
They marked this as part of a larger discussion called 'demistyfing innovation'. About a conglomerate of different communities (or sub-communities) they turn to the basics of communities and say:
"Each community will flourish or wither depending on how well its interests are met by the community resources." and later "New ones will spring up, grow, and possibly become dormant or die. As long as there are always some thriving communities, the larger open source project can be considered alive and well. Note that death of a community does not equal failure. Consider a community that arose to develop a new standard."
In the second part of the document, they give three points to get to an organization that would emabrace the IHE (Innovation Happened Elsewhere) model:
- Understand the true proprietary value and technology of the company
- Be confident (and make sure) you can be swifter than the competition
- Create a company culture that embraces innovation, wherever they occur
"Next, an outside company using gifts from the IHE company recognizes that these tools, technology, and prototypes can be combined with its own company’s technology to produce products at lower cost, less risk, and of great value to its customer base. Again, this is done for selfish reasons, but such decisions help expand the customer base for the IHE company. Sometimes a company or organization will think of an application or variation of the gift that will open the IHE company up to entirely unexpected markets. This is one of the most important return gifts the IHE strategy can provide. "
There is a more clear statement in another paper on why they'd assume this is the case for some organizations:
"When a given firm’s design rules become known and accepted by a number of firms, industry standards emerge. At this point, the vertically integrated firm no longer maintains extensive control over the product architecture. In an effort to compete on the bases of reliability, customization, and price, incumbents outsource to specialty firms that focus solely on the production of a particular module. This precipitates a shift in firm structure away from vertical integration toward a more horizontal model. The end result is an industry that resembles a networked cluster of specialized firms. "
and even:
Organizations have been trying to streamline and improve their development processes for decades. Portfolio analysis, stage-gate processes, options pricing models, and numerous other tools and techniques have decreased time to market and increased average returns on investments in nearly every industry. These gains are certainly attractive, and firms that are not already trying such approaches should do so. Still, these techniques primarily focus on internal, linear processes. There is a whole new horizon for what kinds of gains are possible when connectivity is leveraged. The age-old idea of letting a thousand (innovation) flowers bloom becomes a much more tenable proposition if the gardeners are working together.
The Conference Board of Canada reports that “firms that collaborate are . . . significantly more likely to introduce breakthrough (world-first) innovations.” Collaborations include inter-firm but also working relationships with universities and government labs. This represents the power of multiple members of an economic “web” of relationships working together. Firms can take advantage of connectivity to enhance innovation development in two new ways: dealing with disruptive innovations by managing networks of modules, and leveraging the power of many through distributed development.
Their papers support the earlier submitted model for innovation architecture in this weblog. The full articles can be downloaded at their center of business innovation
This happened at 8:58:55 PM or
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