….and is Steve Jobs really such a great CEO? When we talk about about innovation we should first of all talk about “Closed Innovation” and “Open Innovation”.

Closed Innovation describes an paradigm where innovation should only come from a firm’s R&D. This has been the dominating strategy in companies like AT&T, IBM and Xerox in the 20th century. Some of these companies have made the transition to “Open Innovation”, those that didn’t are gone. So what exactly is Open Innovation then?

Open Innovation is a paradigm in which companies ask themselves two questions:

1. How can I profitably use others ideas in our business?
2. How can I profitably allow others to use our ideas in their business?

With this approach you accept that there are smart people (and innovative companies) out there as well and you change your innovation management process to answer the two question above. One of the best examples for Open Innovation is Cisco. Just look at the list of companies they have acquired in the last 17 years.

Apple: Not invented here, but very welcome

But let’s look at Apple now - and especially at one article in The Economist. Titled “Lessons From Apple” the key message of the article is that the main reason for Apple’s innovations is the use of strategies that support the Open Innovation paradigm.

What the article say about the iPod:

The idea for the iPod, for example, was originally dreamt up by a consultant whom Apple hired to run the project. It was assembled by combining off-the-shelf parts with in-house ingredients such as its distinctive, easily used system of controls.

And about the iTunes:

And it was designed to work closely with Apple’s iTunes jukebox software, which was also bought in and then overhauled and improved.

The article concludes:

Apple is, in short, an orchestrator and integrator of technologies, unafraid to bring in ideas from outside but always adding its own twists.

An addition to this is the discussion about the iPhone. Remember there is already a multi-touch phone on the market. The Prada Phone.

But does being an orchestrator also mean, that you are an innovative company? What do you think?

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