From failure to open innovation

It is a challenge what Clay Maxwell (@bizinovationist on twitter) suggested! To comment, “Today’s Innovation Can Rise from Yesterday’s Failure”.

This article by Vijay Govindarajan co-authored with Jay F. Terwilliger and Mark H. Sebell comes in the wake of another already mentioned here where you can read that “Many times when we experience our ideas we tend to look exclusively to the results and do not consider the learning we do from successes and failures.”

What the authors referred suggest is that despite many efforts in innovation have failed opportunities are not dwindled over time. On the contrary the change that we are subject carries also new market opportunities, new desires and new skills.

To fail does not mean to throw out the whole investment! Fails can mean stopping at the right time!

The right moment to reflect on new business models, to reorganize the company, to reassess investments and turn them into launch pad for innovation in a new context and with resources available more meaningful and less costly.

What before was not viable today can be, and the ideas or concepts can be adjusted to new realities.

To learn from the failures it is necessary to understand them and the authors in the article mentioned above pointed out a model to review the failures of the past and remove the innovation strategy to implement.

“Understanding this framework provides enterprises with an opportunity to revisit past failures, compare them to today’s realities, and more quickly and efficiently leverage past “failed” concepts. HBR

It is at the intersection of corporate will, marketplace opportunities and the strategic competenices which emerge the new strategy of innovation that can pass through a framework in the new circumstances.

Change the times change the wills. The concepts that failed in the past are not useless.

Henry Chesbrough says: “With open innovation, we can create a new division of innovation labor, one that can support investment in innovation in the future.   If they open up their innovation process to utilize the work of others on the one hand, and share their own work with others on the other hand, innovation can thrive once more.   If they are able to do so, many more ideas will become available to them for consideration, and many more pathways for unused internal ideas will emerge to unlock their latent economic potential as they go to market.”

Companies now have new spaces for external alliances that can enable new markets that were unattainable before then which may mean new business models, i.e. an open business model to create value and to capture value within the alliances established.

The value creation strategies generate benefits that are shared by the partners of the alliance, while the value capture strategies determine how these collective benefits are divided between the partners.

To Henry Chesbrough ” A business model performs two important functions:  it creates value, and it captures a portion of that value.  It creates value by defining a series of activities from raw materials through to the final consumer that will yield a new product or service with value being added throughout the various activities.  The business model captures value by establishing a unique resource, asset, or position within that series of activities, where the firm enjoys a competitive advantage.”

Emerging pathways that open innovation brings when faced with the renewed willingness of the leaders of companies may be the revitalization of “old ideas or concepts” and the consequent use of the work already done.

But this, in my opinion, will only be possible if this will represent a new stance on the part of managers of enterprises:

-Willingness to understand the conditions under which the errors occurred. Accept mistakes as levers to innovate.

-Adaptation of passions to new realities. The environment of dreams can evolve.

-Creating new competencies given to the development of markets and new technologies. The change brings almost always resistance.

In organizations there can be two types of portfolios that matter for here and now, of failure and the alliances. Awareness (knowledge and understanding) of what were the initiatives that have failed and have knowledge of possible alliances can result in creating and capturing value.

To combine portfolio of failures with portfolio of alliances or partnerships can be a new way to grab new opportunities.


“The single biggest reason companies fail is they over invest in what is, as opposed to what might be.” — Gary Hamel

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