Open Innovation between Companies and Consumers

The creation of knowledge, products, and services by online communities of companies and consumers is still in its earliest stages. For most companies, innovation is a proprietary activity conducted largely inside the organization in a series of closely managed steps. Over the last decade, however, a few consumer product, fashion, and technology businesses have been opening up the product-development process to new ideas hatched outside their walls—from suppliers, independent inventors, and university labs. Executives in a number of companies are now considering the next step in this trend toward more open innovation. For one thing, they are looking at ways to delegate more of the management of innovation to networks of suppliers and independent specialists that interact with each other to co-create products and services. They also hope to get their customers into the act to come up with better ideas for new products and efficiencies in development.

Read this article for insights, challenges and lessons learned: http://www.mckinseyquarterly.com/Information_Technology/Networking/next_step_in_open_innovation_2155