Open Innovation In Xerox

Open Innovation

“Most innovations fail. And companies that don’t innovate die” (Chesbrough, 2003). The word innovation is derived from the Latin verb ‘innovare’ or ‘in novus’, meaning “into new” (Costello and Prohaska, 2013). Innovation is something new that if managed correctly can create profits for an organization. Managing innovation in today’s society is vital for companies to survive and move forward, however innovation can be quite a difficult process to manage. Innovation can be costly, time consuming and involves taking risks, risks that can lead to profits or failure. Apple, for example invested heavily into developing the iPod and bringing it to market, which at the time was a massive risk, but the risk succeed in Apples case.

Most of Xerox’s innovation was developed in their Palo Alto Research Center, which was aimed at capturing value from the new market of the computer industry. Xerox created their PARC in 1970, with scientist George Pake recruiting some of the best computing researchers available at the time. The PARC would turn out to be a research success, however, it could not capture value from its technologies. Chesbrough (2003) concluded that Xerox’s problems with the PARC developed from their closed innovation paradigm. Most of the technological achievements that emerged from the PARC could not thrive in a closed paradigm but only in an open context. Many influential researchers at the PARC left to form their own start-ups or join other companies. Some of which were Apple and Microsoft, with the Apple Macintosh computer having many of the same design concepts created at the PARC (Chesbrough,

However, when targeting a new market, the company must plan their technology very differently. The company doesn’t know all of the information, or what is coming next, whether to spend more money or wait to see what the next card offers. This market uncertainty is ever-present in today’s constantly changing environment and market with new start-ups and joint ventures constantly rising and falling with the digital world. Xerox were an example of a company that were very good chess players, because they were very good at finding new technologies to advance their copier and printer business, however Xerox were a poor poker player because they were not capable to explore potential new markets in computing technologies. To play poker companies need to gauge their capital spending on investments and expose setbacks or failures to outsiders to gain their perspective on potential advancements or