Balanced Scorecard Benchmarking Business Process Reengineering Collaborative Innovation Core Competencies Customer Relationship Management Customer Segmentation Decision Rights Tools Downsizing Growth Strategy Tools Knowledge Management Lean Six Sigma Loyalty Management Mergers and Acquisitions Mission and Vision Statements Online Communities Outsourcing Price Optimization Models Scenario and Contingency Planning Shared Service Centers Strategic Alliances Strategic Planning Supply Chain Management Total Quality Management Voice of the Customer Innovation Related topics New Product Development Open Innovation Open-Market Innovation Description Collaborative Innovation applies the principles of free trade to the marketplace for new ideas, enabling the laws of comparative advantage to drive the efficient allocation of R&D resources. By collaborating with outsiders-including customers, vendors and even competitors-a company is able to import lower-cost, higher-quality ideas from the best sources in the world. This discipline allows the business to refocus its own innovation resources where it has clear competitive advantages. The company is also able to export ideas that other businesses could put to better use, raising cash for additional innovation investments. Methodology Collaborative Innovation requires corporations to: Focus resources on core innovation advantages. Allocate resources to the highest-potential opportunities in order to strengthen core businesses, reduce R&D risks and increase innovation capital; Improve innovation circulation. Build information systems to capture insights, minimize duplication of efforts, improve teamwork and increase the speed of innovation; Increase innovation imports. Access world-class ideas, complement core innovation advantages and strengthen the company's cooperative abilities and its reputation; Increase innovation exports. Establish incentives and processes to objectively assess the fair market value of innovations, raise incremental cash and strengthen relationships with trading partners. Common uses Companies use Collaborative Innovation to: Clarify core innovation competencies; Maximize the productivity of new product development without increasing R&D budgets; Decide quickly whether to pursue or sell patents and other intellectual capital; Increase the speed and quality of new product introductions. Selected references Adner, Ron. "Match Your Innovation Strategy to Your Innovation Ecosystem." Harvard Business Review, April 2006, pp. 98-107. Chesbrough, Henry William. Open Business Models: How to Thrive in the New Innovation Landscape. Harvard Business School Press, 2006. Chesbrough, Henry William. Open Innovation: The New Imperative for Creating and Profiting from Technology. Harvard Business School Press, 2003. Chesbrough, Henry William, Wim Vanhaverbeke, and Joel West (eds.). Open Innovation: Researching a New Paradigm. Oxford University Press, 2006. Christensen, Clayton M., and Michael E. Raynor. The Innovator's Solution: Creating and Sustaining Successful Growth. Harvard Business School Press, 2003. Hagel, John, III, and John Seely Brown. "Productive Friction: How Difficult Business Partnerships Can Accelerate Innovation." Harvard Business Review, February 2005, pp. 82-91. Huston, Larry, and Nabil Sakkab. "Connect and Develop: Inside Procter & Gamble's New Model for Innovation." Harvard Business Review, March 2006, pp. 58-66. Linder, Jane C., Sirkka Jarvenpaa, and Thomas H. Davenport. "Toward an Innovation Sourcing Strategy." Sloan Management Review, Summer 2003, pp. 43-49. Nambisan, Satish, and Mohanbir Sawhney. The Global Brain: Your Roadmap for Innovating Faster and Smarter in a Networked World. Wharton School Publishing, 2007. Prahalad, C.K., and Venkat Ramaswamy. The Future of Competition: Co-Creating Unique Value with Customers. Harvard Business School Press, 2004. Rigby, Darrell K., and Chris Zook. "Open-Market Innovation." Harvard Business Review, October 2002, pp. 80-89. Selden, Larry, and Ian C. MacMillan. "Manage Customer-Centric Innovation-Systematically." Harvard Business Review, April 2006, pp. 108-116. Surowiecki, James. The Wisdom of Crowds. Anchor, 2005.