Open Business Models

Open business models, like the name suggests are business models that are open to change. They invite new ideas and concepts and continue to grow all the time. All companies wish to keep their internal information within themselves. But some companies decide to involve their employees, suppliers as well as customers to participate in deciding how the business takes place. This business model is a new trend and is working well for many companies.

These days when the market fluctuates more than ever before, it is a good idea to keep changing with the demands of time. Many businesses have suffered losses because their business model became outdated for the current scenario. Numerous businesses still are. It is not only about switching to a new technology but much more. It is how you go about doing your business.

Since early on, there are research and development departments within most companies that would do their research internally, with hardly any inputs from the people involved. Generally, the people who are connected to the business in any way seem to have good practical knowledge about the business, its strengths and weaknesses and areas of improvement. The idea is to utilize this knowledge which the customers, suppliers and employees would be happy to share. This is not to say that the research and study groups are no good. They are. Their perspective and vision is worth appreciation but their findings can sometimes be incomplete.

Even competitors are welcome. Many companies have found that they hold patents that they never use. Procter and Gamble surveyed their patents and found out that only 10% of them were actually useful to the company. In instances like this, it is a good idea to sell away the technology to somebody who needs it. Everyone doing their own research is no good. It is like reinventing the wheel. Getting maximum number of patents is like a rat race. It would never end and it would never be the solution. The solution is to join hands. Even if the research is done independently, sharing it would be mutually beneficial.

There is no point in being too possessive about intellectual property. Like any other property, say a piece of land, even IPs should be sold away if not being used. Imagine people holding big areas on land and not letting others live! Take what you need and leave the rest for the others. This model has been suggested by Henry Chesbrough who is the director of the Center for Open Innovation at the University of California, Berkeley. His books are available for those who want to know more.