In a new book that already has drawn glowing reviews, Haas School Adjunct Professor Henry Chesbrough calls on companies to break down their walls to foster innovation.
Although just released in December 2006, Open Business Models: How to Thrive in the New Innovation Landscape, already has received a Wall Street Journal review calling the book, "one that B-school students and lay readers alike will enjoy." BusinessWeek also included it on its list of the 10 best innovation and design books of 2006.
In Open Business Models, Chesbrough argues for companies to look outside their boundaries for the best ideas and to capitalize on their own unused ideas through licenses and sales to other firms, even competitors. This new open approach requires new performance metrics, new processes, and changing long-held views about innovation and intellectual property, he says.
Such change is essential in today's world of rising technology development costs, shorter product life cycles, and widely distributed knowledge, argues Chesbrough, executive director of the Center for Open Innovation. The center is part of the Institute for Management, Innovation, and Organization.
Chesbrough illustrates how an open business model works with detailed case studies of companies such as Proctor & Gamble, IBM, and Qualcomm. Chesbrough, who received his Ph.D. from Haas in 1997, also offers a framework of six business model types — with examples such as Wal-Mart, Dell, and Apple — and a diagnostic test to enable managers to open up their own companies.
Open Business Models is published by Harvard Business School Press. It builds upon Chesbrough's earlier book, Open Innovation: The New Imperative for Creating and Profiting from Technology, which was published in 2003 by Harvard Business School Press.