Open Services Innovation

The father of "open innovation" is back with his most significant book yet. Henry Chesbrough’s acclaimed book Open Innovation described a new paradigm for management in the 21st century. Open Services Innovation offers a new approach that demonstrates how open innovation combined with a services approach to business is an effective and powerful way to grow and compete in our increasingly services-driven economy. Chesbrough shows how companies in any industry can make the critical shift from product- to service-centric thinking, from closed to open innovation where co-creating with customers enables sustainable business models that drive continuous value creation for customers. He maps out a strategic approach and proven framework that any individual, business unit, company, or industry can put to work for renewed growth and profits. The book includes guidance and compelling examples for small and large companies, services businesses, and emerging economies, as well as a path forward for the innovation industry.

"Whether you are managing a product or a service, your business needs to become more open and more inclusive in order to be more innovative. Open Services Innovation will be an invaluable guide to intrepid managers who commit to making that journey."
—GARY HAMEL, visiting professor, London Business School; director, Management Lab; and author, The Future of Management

"I tore out page after page to share with my leaders. Chesbrough has pioneered an entire rethink of business innovation that’s rich in concept, deeply explained, with tools ready to use in every industry."
—SCOTT COOK, founder and chairman of the executive committee, Intuit

"Focusing on core competence often tempts managers to keep continuing what succeeded in the past. A far more important question is what capabilities are critical in the future, and Chesbrough shows how to ask and answer these issues."
—CLAYTON CHRISTENSEN, Robert & Jane Cizik Professor of Business Administration, Harvard Business School, and author, The Innovator's Dilemma

"To thrive, businesses will need to master the lessons of open service innovation. Here is their one-stop guidebook with important lessons clearly and compellingly presented."
—JAMES C. SPOHRER, director, IBM University Programs World-Wide

"Open Innovation pioneer Henry Chesbrough breaks new ground with Open Services Innovation, a persuasive argument for the power of co-creation in the world of services."
—TOM KELLEY, general manager, IDEO, and author, The Ten Faces of Innovation, The Art of Innovation

"With his trademark style of beautifully explained examples, Henry Chesbrough shows how open service innovation and new business models can help you escape this product commodity trap and bring you to the next level of competition."
—ALEX OSTERWALDER, author, Business Model Generation

"Open Services Innovation shows how a business can redefine itself as a service organisation and tap into faster growth through shared innovation."
—SIR TERRY LEAHY, chief executive, Tesco

"Chesbrough shows how innovating openly with a services mindset can make you a market leader."
—CHARLENE LI, author, Open Leadership, and founder, Altimeter Group

Acknowledgments xi

Introduction: Open Services and Innovation 1

1 The Case for Open Services Innovation 7

Part 1: A Framework to Spur Innovation and Growth 29

2 Think of Your Business as a Services Business 31

3 Co-Create with Your Customers 53

4 Extend Services Innovation Outside Your Organization 68

5 Transform Your BusinessModel with Services 89

Part 2: Open Services Innovation in Practice 113

6 Open Services Innovation in Larger Companies 115

7 Open Services Innovation in Smaller Companies 133

8 Open Services Innovation for Services Businesses 155

9 Open Services Innovation in Emerging Economies 169

10 Open Services Innovation: The Way Forward 188

Notes 203

The Author 230

Index 232

"... offers a great vision for the future and provides inspiration for how companies in both developed and developing economies could create more high value and satisfying jobs." (Anatellô, November 2011)

"... looks beyond product and technological platforms to a world where consumer-facing services provide the strategy for high-value, high-growth employment." (Guardian.co.uk, February 2011)

"... thoughtful new book on innovation." (Economist.com, January 2011)

"... this is a book I can only recommend as an essential read.... Chesbrough has certainly raised the bar on service innovation." (InnovationManagement.se, January 2011)

Henry Chesbrough is professor and executive director of the Center for Open Innovation at the Haas School of Business at the University of California, Berkeley. Previously, he was a professor at the Harvard Business School. His book Open Innovation was named Best Business Book by Strategy & Business magazine, and the best book on innovation on NPR's All Things Considered. His second book, Open Business Models, was named one of the 10 best business books by BusinessWeek, and Scientific American rated him as one of its Top 50 business and technology leaders.

Praise for OPEN Services INNOVATION

"I tore out page after page to share with my leaders. Chesbrough has pioneered an entire rethink of business innovation that's rich in concept, deeply explained, with tools ready to use in every industry."
–SCOTT COOK, founder and chairman of the executive committee, Intuit

"Focusing on core competence often tempts managers to keep continuing what succeeded in the past. A far more important question is what capabilities are critical in the future, and Chesbrough shows how to ask and answer these issues."
–CLAYTON CHRISTENSEN, Robert & Jane Cizik Professor of Business Administration, Harvard Business School, and author, The Innovator's Dilemma

"To thrive, businesses will need to master the lessons of open service innovation. Here is their one-stop guidebook with important lessons clearly and compellingly presented."
–JAMES C. SPOHRER, director, IBM University Programs World-Wide

"Open innovation pioneer Henry Chesbrough breaks new ground with Open Services Innovation, a persuasive argument for the power of co-creation in the world of services."
–TOM KELLEY, general manager, IDEO, and author, The Ten Faces of Innovation and The Art of Innovation

"With his trademark style of beautifully explained examples, Henry Chesbrough shows how open service innovation and new business models can help you escape this product commodity trap and bring you to the next level of competition."
–ALEX OSTERWALDER, author, Business Model Generation

"Open Services Innovation shows how a business can redefine itself as a service organisation and tap into faster growth through shared innovation."
–SIR TERRY LEAHY, chief executive, Tesco