How ‘Open’ is your innovation strategy?
"The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow" - Rupert Murdoch
For years, the secret sauce for driving innovation in firms has been to hire the best and invest heavily in R&D. Not only were companies able to discover the best ideas with the brightest talent, but they were also able to market and protect these ideas and in turn reinvest to keep the wheel turning. Has this scenario changed today though? Challenging R&D environments, mounting costs and competitive pressures are driving companies to reconsider their innovation strategies. As speed becomes critical to survive in a heavily competitive landscape, businesses are leveraging the collective knowledge of many – in turn harnessing the power of collaborations. The eventual shift to the Open Innovation Model is inevitable - openness leads to creativity and usefulness.
As originally explained by Prof. Henry Chesbrough: "Open Innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology. Open Innovation combines internal and external ideas into architectures and systems whose requirements are defined by a business model."
Under this model, firms use Open Innovation to source not only external knowledge and ideas, but also resources and technologies. Information is more liberally shared, co-creation is encouraged and external resources are tapped accelerating the innovation process. As technology continues to influence the way travel is managed, the travel ecosystem increasingly looks to OI to reinvent itself. While services such as Uber and Airbnb succeed in disrupting the market challenging traditional industry norms, existing players need to focus on remodeling their strategies and inventing products and services that enhance their core value proposition: improving travel experiences. This calls for a fundamental shift in how they do business – partnerships being the key. Collaboration and innovation are mutually interlinked. Thankfully, the ecosystem is also evolving with these ideas. The upsurge of facilitators such as incubators and accelerators, accessible venture capital and a thriving start-up framework are testimony to shifting cultures. Not only travel technology providers but also many airlines (e.g. Emirates, RyanAir, SAS) and airports (e.g. Changi, San Diego) have today set up their own 'Centres of Excellence' or Innovation Labs to explore unconventional ideas sprouting in a lean start-up mode. Hackathons are gaining momentum in the travel and hospitality space especially, and are being used to discover 'fresh ideas' and solutions for business problems and broadly for improving customer experiences. Addressing themes such as navigation, personalization, retailing, automation, machine learning and big data, travel providers are discovering the power of crowdsourcing for faster, cost efficient and impactful ideas. Airlines such as Emirates, British Airways, Qantas, Singapore Airlines are among the many who commonly host hackathons in search of agile solutions.
In conclusion, open innovation models focussed on 'coupled (inbound + outbound) creativity' have the potential and will continue to expand organizational capabilities by rendering short innovation cycles, rapid product development and reduced time to market. Companies can create value by using distributed co-creation and the opportunities are endless. OI is becoming pervasive and in need for more speed – keep collaborating and keep experimenting.
IBS has been at the forefront of innovation for the travel, transportation and logistics industry. Our collaborative approach for R&D involves active participation of customers, prospective customers and senior industry thought leaders which we refer to as our "Core Group of Influence" or "CGI" program wherein we gather insights into the future direction and next generation technology needs of the global travel, transportation and logistics industry. Recently, we have invested in a partnership with London based Traveltech Lab which aims to be a global hub for innovation in travel, tourism and hospitality.