Three levels of open innovation maturity

There are three levels of open innovation maturity: externally aware, fully integrated and ecosystem orchestration. Innovation and growth performance improve as maturity increases.

As open innovation has developed over the past 15 or so years, we have benchmarked companies moving through three levels of maturity:

Level 1: Externally Aware: Level 1 companies recognize that external ideas and capabilities are valuable in the innovation process. They partner with suppliers and customers throughout the innovation process—from ideation to commercialization. However, partnerships are mostly opportunistic, collaboration management is largely ad hoc, and no comprehensive OI strategy is in place. In this early stage of maturity, the company learns important lessons regarding leveraging external resources, refining its operational model, and generally growing OI capabilities.

Level 2: Fully Integrated: Companies at the second level of maturity make partnerships an integral part of their innovation strategy. For example, Procter & Gamble’s Connect & Develop program set a goal of “50% of all new product ideas coming from outside the company.” Level 2 companies establish a defined OI operational model and processes for identifying, selecting, and managing external innovation partnerships. Moreover, they build a culture of collaboration. Realizing that partnership selection goes both ways, many of these OI-savvy companies, strive to become the “partner of choice” so that other companies seek them out for partnerships.

Level 3: Ecosystem Orchestration: A Level 3 company is the most mature, able to orchestrate the ecosystem of companies and talent in its domain. Eli Lilly transitioned to Level 3 in 2006 when it shifted its OI model to a Fully Integrated Pharmaceutical Network (FIPNet). Instead of solely focusing on direct collaborations between itself and other companies as it did in the past, Eli Lilly built a network of hundreds of companies—a collaborative ecosystem—that delivers higher levels of value for Lilly and the entire ecosystem. These ecosystem partners are encouraged to share technologies and collaborate not only with Lilly itself but with each other, creating a strong, dynamic system of collaboration.

Do you need to improve your OI maturity level? Ask yourself these questions:

  • What level of maturity is your current OI program? Do you have good benchmarks?
  • What level of OI maturity do you need to compete effectively? Is Level 1 sufficient? Do you need to progress to level 2 to stay competitive? Would Level 3 provide you additional competitive advantage?
  • How can you move effectively and efficiently from one level of maturity to the next? Do you know the key levels of change for moving between levels? What metrics should you use?
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