VOIS - Area 1 - Module 6

  1. MODULE TITLE

Module 6: Adjusting your organisation to the requirements of Open Innovation
  1. AUTHORS

Ewa Kopczynska
  1. SHORT DESCRIPTION

Adjusting your organisation to the requirements of Open Innovation (this is going to be the link)
  1. LEARNING OBJECTIVES

    Upon completing this module, you should be able to:

  • Understand whether your organisation is an open one and what does it mean to be an open SME,
  • Analyse the absorptive capacity of your organisation and understand how to improve it,
  • Recognise the link between innovation and your business model and analyse its key for Open Innovation aspects.
  1. Training Content
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Business model innovation

Based on your improved understanding of the innovation process, you are already familiar with the fact that it is not a solution on its own, but ensuring unlocking its value through development and commercialization that is a key to becoming a successful innovator. It is your particular business model and innovating it to respond to/or anticipate market developments that defines your business and its chance for success.

Thinking question

Does your organization monitor for needs or opportunities for business model innovation?

  • Does our SME keep up with changes outside enterprise?
  • Does it monitor them?
  • Does it adapt? Does it develop its human and technology aspects in line with market developments?
  • Do our employees pay attention to identification of useful external knowledge?

If you are lacking a system to monitor for needs and opportunities for business model innovation, discussing market developments and how company can benefit from them or/and how it may prepare for upcoming threats with your team and collaborators on periodical basis is a good place to start.

A lead-user workshop engaging external partners in your business model innovation is also a good idea for obtaining relevant external knowledge. Invite some customers and suppliers to discuss the product – existing or prospective.

You should build a culture of always paying attention to new trends, needs and opportunities in your team and considering how information from the market can translate into opportunities or threats.

Whether you realise it or not, if your company is already on the market, it has a business model. It defines the value you deliver to your customers – what do you offer them, the way you do it and how it translates into a profit. Engaging your SMEs in innovation means that your business model will evolve.  Innovating your business model is the main way to avoid commodity trap, which is the key threat to SMEs. It helps you avoid the common scenario of losing profitability as soon as the bigger players use their scale advantage to offer your customers solution similar to yours at lower price[7]. As SMEs are rarely in position to compete on price level, they need to find new ways to create value for client in a way that is difficult to imitate by competition, or constantly update their approach before bigger players catch up.

Success of your Open Innovation strategy, and in fact of your long-term survival on the market, is strictly tied to developing a successful business model and executing it.

As you will observe changes in the market and customer behaviours, raise of new technologies and approaches or any other opportunities or threats, you should consider how it can impact your business model.

Image by thumprchgo from Pixabay

With an Open Innovation strategy, the core assumption will lay in constant attention to business model innovation as a way for your SME to deliver new value to customers and avoid competitive pressures in a middle and long term and in identifying optimal balance between internal and external resources.

While you consider your business model always keep your customer in mind. It is his/her decision to choose your offer or not, that will decide about success of any of your products. You can offer value to your customers by[8]:

  • Adding functionality and reliability of your product,
  • Making your product more convenient,
  • Reducing costs and prices,
  • Offering an experience,
  • Adding relevant services.

Each of the options should aim at making your offer unique and not easy to imitate by competitors.

Choosing between strategic options consider that innovation-driven strategy of SME is beneficial if:

1/ you target markets that are not attractive for big companies or/and,

2/ it evolves in relatively fast pace making changes to its offer to avoid being suffocated by the competition.

More for integrating the Open Innovation approach in your business model innovation you additionally need:

3/ the capacity to absorb external knowledge, ideas and technologies.

With that in mind as you consider any evolution of your offer to customer – the question “how do we do it most effectively – individually or with partners?”, will help you define more efficient path to reaching your innovation objectives.

While in this module we focus only on key aspects relevant to account for in the scope of engaging in Open Innovation activities, it is critical for your company to develop an effective business model, monitor market developments and adapting your business model accordingly. If business model concept and business model innovation are not familiar to you and/or team, make sure that you will fill in your SMEs competences.

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