Henry Chesbrough

Andrew R. Garman

<article-ideainbrief class="article-ideainbrief">
 <h4 class="ideainbrief-title">The Idea in Brief</h4>
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  <ul>
   <li>During tough economic times, placing certain assets and projects outside your company’s walls can actually preserve opportunities for future growth while you take the time to shore up the fortress.</li>
  </ul>
  <ul>
   <li>Some inside-out strategies involve opening up projects to investment and development by existing outside firms; others call for spinning off projects as separate ventures that still allow you to retain some equity.</li>
  </ul>
  <ul>
   <li>The inherent cultural, political, and organizational challenges of inside-out open innovation can be met by approaching it holistically and placing it under the leadership of senior executives in strategic roles.</li>
  </ul>
 </div>
</article-ideainbrief><p>History shows that the companies that continue to invest in their innovative capabilities during tough economic times are those that fare best when growth returns. That’s how the U.S. chemicals industry overtook Britain’s after World War I, how Sears surpassed Montgomery Ward as the leading U.S. retailer after World War II, and how Japanese semiconductor makers outpaced U.S. companies after the downturn of the early 1980s.</p>

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<p><span class="reprint">Reprint: R0912F</span></p>
<p>A recession often forces you to cut R&#038;D as you refocus on your core. But innovation need not go by the wayside. By placing certain assets and projects outside your walls, you can actually preserve opportunities for future growth while you shore up the fortress. Chesbrough, of Haas School of Business, and Garman, of New Venture Partners, identify five strategic moves that open the door to innovation by, ironically, letting it out of the house.</p>
<p>Some inside-out moves permit outside firms to invest in and develop your projects; others call for spinning off projects as separate ventures that still allow you to retain some equity. Whatever the specific approach, you can meet the inherent cultural and organizational challenges of inside-out open innovation by approaching it holistically and placing it under the leadership of senior executives in strategic roles.</p>

How Open Innovation Can Help You Cope in Lean Times

Reprint: R0912F A recession often forces you to cut R&D as you refocus on your core. But innovation need not go by the wayside. By placing certain assets and projects outside your walls, you can actually preserve opportunities for future growth while you shore up the fortress. Chesbrough, of Haas School of Business, and Garman, of New Venture Partners, identify five strategic moves that open the door to innovation by, ironically, letting it out of the house. Some inside-out moves permit outside firms to invest in and develop your projects; others call for spinning off projects as separate ventures that still allow you to retain some equity. Whatever the specific approach, you can meet the inherent cultural and organizational challenges of inside-out open innovation by approaching it holistically and placing it under the leadership of senior executives in strategic roles.

How Open Innovation Can Help You Cope in Lean Times

Summary.

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