Rating: 
Summary: Open Your Mind, Open Your Company
Review: As we have come to expect from Harvard's Professor Chesbrough, Open Innovation is a wealth of insight and knowledge in how organizations can transform themselves by blending the best of their internal know-how and external sources of perspectives. Beginning with an interesting historical vantage point, Chesbrough introduces us to innovation structures as they have evolved at the beginning of the twentieth century, through the establishment of central research & development facilities and beyond. It was historian Alfred Chandler who first researched the economies of scale that resulted from the internal research & development facilities. As it points out in the book, 'these R&D facilities were so successful in extracting more efficiency out of increased understanding that they created natural monopolies in many leading industries, or economies of scope'. But many erosion factors have weathered these fortresses of knowledge, and now Chesbrough maintains that innovations, however clever, are worth nothing until a viable business model is found to exploit them. The function of a business model, according to the author and colleague Richard Rosenbloom, is to: articulate the value proposition; identify a market segment; define the structure of the firm's value chain; estimate the cost structure and margin, describe the position of the firm within the value network and to formulate the competitive strategy of the offering. So invention is not enough. Organizations most follow the path to commercialization, but that route often means it must work collaboratively with many others. This approach has many ramifications on company structure and ways of working. It is hard for organizations (and their leaders) to work on having core-differentiated capabilities, while still being open with their value network. Therefore, this leads ManyWorlds to assume that those things, which are seen as true differentiators in mature companies, must move away from a specific product advantages and more toward process differentiating capabilities. While there is always a role for product innovators, the model they operate under is not usually scaleable, and companies often grow into either 'economies of scale' or 'economies of scope'. But finding and developing that all important part of the value network becomes a crucial skill in itself. Open Innovation is a truly excellent book that a review cannot do justice to. With detailed case studies on Xerox (and spin outs), Intel and examples from many other companies, Chesbrough has written an insightful and timely work that draws many threads together. Executives who want to explore how facets of innovation, whether internally or externally motivated, sourced or executed, would not find a better read than Open Innovation.
Rating: 
Summary: Interesting and well documented
Review: Chesbrough's premise is that innovation is a technology company's wealth. That hasn't changed. What has changed since the 70s is how that wealth is use. Back then it was hoarded, now it is bought, sold, leased, borrowed, traded, and invested. This book covers a wide range of business models, both good and bad, with case studies for each. Most samples are mentioned only briefly, like RCA's response to the transistor. (They invested more in vacuum tubes!) Three major case studies show three major strategies for the trade in ideas: Xerox, Intel, and IBM. The Xerox model never successfully opened itself to the marketplace of ideas, and Xerox suffered for it. Intel, by contrast, went for years with no formal R&D group of its own. accepting and improving others' technology. IBM showed how a company could transform itself from an innovation hermit to a gregarious buyer and seller of technology. The book is very readable. It gives enough information to make each point clear, in terms of real companies in the recent past. The author avoids both MBA jargoneering and academic dryness, making this very accessible to any interested reader. This is a quick and rewarding read. It lacks academic rigor, but it's at a good level for anyone wanting a practical perspective on innovation strategies, yesterday, today, and in the transition between.
Rating:
Summary: not just for corporate innovation managers
Review: Having been "grist" in the Xerox mill that Chesbrough covers (he interviewed me in 1997), I can attest to the thoroughness of his research into why Xerox didn't capitalize on the inventions of PARC. Chesbrough goes way beyond the Word template journalist seem to have for articles about PARC. Rather than pointing at the usual suspects of senior managers with no clue about innovation or research types with no clue about business, Chesbrough looks to the broader historical and social context for explanations. After examining changes in the knowledge landscape---e.g. mobility of high-skill high-knowledge people and rise of venture capital to grease exploration of high-risk high-reward ideas---Chesbrough arrives at the necessity of a shift from a closed model of innovation based on tight control to an open model based on enabling the free flow of ideas for its benefits and capturing what value can be viably captured. Besides Xerox, he looks at IBM, Intel, and Lucent in detail and many others including Microsoft, Cisco, and Merck to explore the open innovation model and how to transition. The book reads well, the years and years of research and detailed case studies don't get in the way. Beyond direct application to large corporations, the model of open innovation has significant implications for academia, government research and policy, and innovation everywhere. Even having thought about the issues covered for years, I see the book having immediate impact on my own actions.
Rating:
Summary: not just for corporate innovation managers
Review: Having been "grist" in the Xerox mill that Chesbrough covers (he interviewed me in 1997), I can attest to the thoroughness of his research into why Xerox didn't capitalize on the inventions of PARC. Chesbrough goes way beyond the Word template journalist seem to have for articles about PARC. Rather than pointing at the usual suspects of senior managers with no clue about innovation or research types with no clue about business, Chesbrough looks to the broader historical and social context for explanations. After examining changes in the knowledge landscape---e.g. mobility of high-skill high-knowledge people and rise of venture capital to grease exploration of high-risk high-reward ideas---Chesbrough arrives at the necessity of a shift from a closed model of innovation based on tight control to an open model based on enabling the free flow of ideas for its benefits and capturing what value can be viably captured. Besides Xerox, he looks at IBM, Intel, and Lucent in detail and many others including Microsoft, Cisco, and Merck to explore the open innovation model and how to transition. The book reads well, the years and years of research and detailed case studies don't get in the way. Beyond direct application to large corporations, the model of open innovation has significant implications for academia, government research and policy, and innovation everywhere. Even having thought about the issues covered for years, I see the book having immediate impact on my own actions.
Rating:
Summary: The importance of embracing open business relationships
Review: In the field of technology change appears to occur at an ever increasing rate. Through innovation in research and development new breakthroughs occur, new products are brought to market, sales brings in money to fund research and the cycle goes on and on. At least this is the way that it is generally thought to occur. In reality hostile takeovers, IPO bids and the like keep interrupting the cycle. Companies refuse to look outside of themselves for innovative ideas or the application of their technology to new ventures. So the system is actually a closed cycle within the company instead of an open one the embraces the value of processes, people, and others outside of the company. Business innovations create potential but do not have value in and of themselves. It is the business model that turns innovation into profits. We have all seen inferior products bypass superior ones because of a better business model. Unfortunately for the consumer, it is not at all uncommon. So, the business model itself defines the profit received from an innovation. Why? Because the business model is the single most important factor in determining a suitable market for the innovation, costs, profit margins, and competitive position. The business model determines whether the company will take advantage of all opportunities including those outside itself or just utilize those opportunities that they can produce internally. The authors detail several case studies that point out the difference between closed and open innovation and the results of each very clearly. The finishing touch to the book is that it clearly details the path to open innovation and how to move a company from a closed mindset to an open one. This is a highly recommended read for anyone wanting to take advantage of technology to increase their profits.
Rating:
Summary: The importance of embracing open business relationships
Review: In the field of technology change appears to occur at an ever increasing rate. Through innovation in research and development new breakthroughs occur, new products are brought to market, sales brings in money to fund research and the cycle goes on and on. At least this is the way that it is generally thought to occur. In reality hostile takeovers, IPO bids and the like keep interrupting the cycle. Companies refuse to look outside of themselves for innovative ideas or the application of their technology to new ventures. So the system is actually a closed cycle within the company instead of an open one the embraces the value of processes, people, and others outside of the company. Business innovations create potential but do not have value in and of themselves. It is the business model that turns innovation into profits. We have all seen inferior products bypass superior ones because of a better business model. Unfortunately for the consumer, it is not at all uncommon. So, the business model itself defines the profit received from an innovation. Why? Because the business model is the single most important factor in determining a suitable market for the innovation, costs, profit margins, and competitive position. The business model determines whether the company will take advantage of all opportunities including those outside itself or just utilize those opportunities that they can produce internally. The authors detail several case studies that point out the difference between closed and open innovation and the results of each very clearly. The finishing touch to the book is that it clearly details the path to open innovation and how to move a company from a closed mindset to an open one. This is a highly recommended read for anyone wanting to take advantage of technology to increase their profits.
Rating:
Summary: Important Read on Innovation
Review: Innovation is a critical driver for the competitiveness of firms and the overall economy. It is also a difficult and messy process to understand. I have read most of the well-known books on innovation as I am fascinated with the topic. Chesbrough brings a coherent and useful point of view into this arena. The contribution of this book is mostly synthesizing a number of principles to provide a useful mental model for managing innovation. It does not present some new ground-breaking theory that knocks your socks off.
For example, the author uses the metaphors of "playing chess" and "playing poker" to describe the invention process. If everything about the technical and market application is known, playing chess (i.e., making careful, methodical moves based on having all available knowledge) is appropriate. However, most innovation occurs in an uncertain environment with plenty of market and technology risk. In such cases, you need to play poker. This means there are multiple hands to be played, you need to be ready to react to new information (newly exposed cards) and you must be willing to toss a hand in when it doesn't pan out.
Chesbrough hits on the idea that successful innovation often requires innovation within the business model. In fact, new ideas shoved into the existing old business model is a classic way for innovations to fail. This is one reason why new firms are often the first ones to embrace radical ideas that change industries.
This book is not just conceptual models dreamed up by an academic. The author uses plenty of real world examples from companies such as Xerox, IBM and Intel.
I highly recommend this book for your innovation management bookshelf.
Rating: 
Summary: Not a great book
Review: Its not a very great book, apart from a few case studies there is no concrete model around which the book has been written such as Michael Cusumano's Platform leadership( a somewhat related are)
Rating:
Summary: Essential Book
Review: Open Innovation is the only other book besides Leifer and McDermott's "Radical Innovation" that I feel compelled to keep with me on hand at all times. It is practical, useful, and the arguments - backed by excellent deep research - is fresh and compelling. There are a lot of gurus out there saying the same old things. Chesbrough is the future. He sees where things are going, and Open Innovation is squarely focused on the force that is driving the transformation of corporate governance right now and over the next five-ten years.
Rating:
Summary: Essential Book
Review: Open Innovation is the only other book besides Leifer and McDermott's "Radical Innovation" that I feel compelled to keep with me on hand at all times. It is practical, useful, and the arguments - backed by excellent deep research - is fresh and compelling. There are a lot of gurus out there saying the same old things. Chesbrough is the future. He sees where things are going, and Open Innovation is squarely focused on the force that is driving the transformation of corporate governance right now and over the next five-ten years.
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