Joonmo Ahn

Many of those involved with open innovation implementation might already suspect (and indeed not be surprised) that the human factor plays a big factor in determining the shape of the open innovation activities.

However, the recent study by Ahn et al. 2017 on CEOs leadership characteristics in small firms reveals interesting details on how this is the case.

The key point, on which the study revolves, is that each new open innovation activity implies strategic changes which of course in turn represent a different level of risk. These individual types of risks are easier to be tackled by CEOs with certain characteristics than others.

Characteristics include personal traits, but also their personal background, expertise and connection.

As one might expect, risk taking propensity of the CEOs can be critical for establishing outbound open innovation processes as this necessitates managing drastic changes and high levels of uncertainty to establish the new routines.

Open Innovation implementation involves entering uncharted waters

However the same leadership traits might hinder other forms of open innovation. The larger the change, the more internal members who are hesitant about change will need persuading, so a bold leadership and patience can be vital. So for example, the initiation of out-bound OI routes requires CEOs to conceive and pursue different innovation commercialisation routes (such as licensing-out and customer involvement, spin-off and M&A) and require strong leadership and brave decisions (an entrepreneurial trait), and also stronger relational and managerial interactions with external partners.

However, when two (or more) firms with different cultural backgrounds, goals and ways of doing research collaborate, they will inevitably have to cope with the challenges presented by progressive adaptation. In this respect, the researchers expected the patience and endurance of CEOs to be critical. However, patience was negatively associated with one type of open innovation (out-bound OI).

The explanation could be that persevering CEOs who trust more in the firm’s internal potential may hesitate to release ideas. Instead they hold on to them in the hope of finding future uses for them, this will in turn negatively influence out-bound OI. So, the picture is quite complex. The paper can be freely accessed to find out which traits are needed to lead each individual OI mode. This might help to select the right person for each open innovation job.

Ahn et al. 2017 “Understanding the human side of openness: the fit between open innovation modes and CEO characteristics”

http://onlinelibrary.wiley.com/doi/10.1111/radm.12264/full

Post by

Joonmo Ahn, Ph.D. (Cantab) Assistant Professor, the Graduate School of Management of Technology (MOT) Sogang University, Seoul, South Korea