Although definition and other details are available online. I will simplify based on experience. It is basically opening up to explore other resources which are available to you already inside your organization. By simply moving out the manager explores new markets , options and new knowledge areas. In our organization we go for open innovation when we want competitive advantage and reduce cost for our NPD projects.
The open innovation model involves telling the world which exists outside of your own organisation that you are ready to hear their ideas/proposals.
E.g an organisation like Black and Decker have taken new product ideas presented to them by outside parties (let's call them the 'inventor') - and agreed to develop them as new Black and Decker products whilst agreeing to pay 'Inventor 1' some of the profit on sales when it reaches the market.
It involves some careful legal practices at the outset - as there are a few important what-ifs:
*what happens if an inventor is rejected after showing their idea, only to find that something similar is later produced by the company?
*what if the inventor shows something that the company is already well-on with developing themselves?
*what if the company believes the inventor has shown the same idea to their competitors already - so they might not have the first choice to commercialise it?
You can see there are risks for both parties - the inventor and the company - usually managed by agreeing a period of time where the company must decide whether to make an offer for the idea/concept or not, whilst the inventor has to wait and not show anybody else. E.g. the company might say "don't show us anything unless you are happy to sign this 6-month secrecy agreement". The company can then use this time to try to established the potential of the idea/concept proposed.
The alternative to open-innovation is having high-calibre innovation teams within your company - and trusting that they will be capable of horizon-scanning and spotting future ideas through the way they organise themselves.
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