Evolving a Value Chain to an Open Innovation Ecosystem: Cognitive Engagement of Stakeholders in...

What is it about?

While open innovation ecosystems allow a firm to harness external sources of value creation, these external ties can also constrain its ability to adapt its innovation strategy to pursue new opportunities. This article looks at how an incumbent firm approached such constraints, and used cognitive artifacts to transform its value chain into a collaborative ecosystem. It examines the case of a 3D printing-enabled shift to mass customization of orthopedic medical implants. The results demonstrate how firms can use artifacts to build a shared understanding across heterogeneous stakeholders as they explore and develop new open innovation models, and how this process can be managed flexibly to avoid adopting a locally (rather than globally) optimal strategy.

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Why is it important?

------------------------------------------------------- Contribution to Academic Scholarship ------------------------------------------------------- This article highlights how managers can use cognitive artifacts to build a shared understanding, as they iteratively explore and develop new open innovation models of value creation with heterogeneous stakeholders. We show how a firm used artifacts to adopt both open innovation and open business models to develop a new value creation logic, and how a delay in freezing this logic allowed it to identify a second, more radical business model shift that it is now pursuing. We also extend the limited understanding of the role of artifacts in making the transition to open innovation actionable. ------------------------------------------------------- Contribution to Management Practice ------------------------------------------------------- The results demonstrate how managers can use artifacts as boundary objects to develop complex new open innovation strategies, and how this process can be managed flexibly to avoid adopting a locally (rather than globally) optimal strategy. We show how artifacts can be used to shape the managerial cognitive maps to select open innovation strategies and allow collective sensemaking across heterogeneous ecosystem stakeholders. This study also suggests how artifacts can facilitate considering multiple possible configurations, avoiding a premature cognitive reframing, and allowing a more radical transformation. ---------------------------- Author Perspective ---------------------------- We were intrigued by the practical question of what tools a firm can use to conceive and implement a complex transition to open innovation. While open innovation assumes a cooperation across permeable organizational boundaries, less often studied is how a firm can manage the value creating relationships among organizations outside its boundaries, particularly when utilizing open innovation to collaborate with an ecosystem of heterogeneous stakeholders. Thus, in this study, we are interested in the tools firms can use to overcome cognitive constraints to adopt an ecosystem model. In particular, we focus on how cognitive artifacts can be used to aid collaboration across multiple, heterogeneous stakeholders to develop a transformative open innovation strategy.