open innovation

Open innovation is a concept introduced by Henry Chesbrough in 2003, advocating that firms should use both internal and external ideas and paths to market to accelerate innovation. Its core definition involves the purposeful management of knowledge flows across the organizational boundary. While not explicitly defined, the ISO 56002:2019 standard for Innovation Management Systems supports this practice in section 8.3 (Innovation processes) by emphasizing interaction with external stakeholders. In risk management, open innovation diversifies R&D financial risks but introduces new ones like intellectual property (IP) leakage and partner dependency. This contrasts with 'closed innovation,' where R&D is confined within the firm, requiring careful risk governance to balance opportunities and threats.

Applying open innovation in ERM requires a structured approach to manage associated risks. Key steps include: 1) **Establish Governance and Risk Assessment:** Based on ISO 31000, define policies for external collaboration and identify risks like IP theft and integration failure. 2) **Design Secure Collaboration Protocols:** Implement controls aligned with ISO 27001 to protect sensitive data. Enforce robust Non-Disclosure Agreements (NDAs) and IP ownership contracts, as guided by ISO 56002's principles on protecting innovation outcomes. 3) **Monitor Performance and Audit:** Set KPIs such as 'time-to-market reduction' and conduct regular audits. For example, P&G's 'Connect + Develop' program successfully increased external innovation contribution to 50% by implementing a rigorous IP vetting process, demonstrating a measurable outcome of well-managed open innovation.

Taiwanese enterprises often face three key challenges: 1) **Fear of Trade Secret Leakage:** Due to a strong manufacturing background, companies are highly protective of their core technologies. Mitigation involves implementing robust IP management systems like ISO 27001 and starting collaborations in non-core areas. 2) **'Not-Invented-Here' Syndrome:** Internal R&D teams may resist external technologies. Overcoming this requires strong executive sponsorship and incentive programs that reward successful internal-external collaboration. 3) **Lack of Systematic Partner Vetting:** Difficulty in finding and evaluating suitable partners. The solution is to develop a standardized due diligence process, guided by ISO 56002, to assess partners' technical capabilities, financial stability, and reputation. Prioritizing a structured partner scouting framework is a critical first step.

Winners Consulting specializes in open innovation for Taiwan enterprises, delivering compliant management systems within 90 days. Free consultation: https://winners.com.tw/contact