Open Business Models: How to Thrive in the New Innovation Landscape Hardcover – December 6, 2006

Great book on open business model .. Will help in my research a lot ..

I was very pleased with the state of the book at such a fair price.thank you

This book is misnamed. Rather than being about open business models, the book's topic is about how to open business models to benefit from access to more technological innovation and strengthen your competitive posture through intellectual property.As a result, Professor Chesbrough creates a misapprehension that successful open business models are almost always linked to technological innovation as their main purpose and benefit. My own research (with Carol Coles in The Ultimate Competitive Advantage: Secrets of Continuously Developing a More Profitable Business Model) indicates just the opposite point: Technological innovation is rarely the most effective way to open up your business model to create improvements.So, this book's value is mostly to those who work in achieving or creating more benefits from technology innovation. If that is your interest, you've come to the right book. If that's not your interest, skip this book.Why do those involved in achieving or creating more benefits from technology innovation need to open their business models? Professor Chesbrough points to several influences:1. Technological innovation is coming from more sources than ever before. As a result, you will be developing inferior technology without accessing the best of what the world has to offer.2. Most intellectual property isn't used for any practical purpose. That's a waste of social and company resources.3. The protections for intellectual property are stronger now, and your pathway to progress will be blocked without collaborating with those who have complementary IP.4. Product cycles are shorter and costs of developing new technologies are higher; open business models offer the promise of getting to market sooner at lower cost so that your business has a better chance of earning a decent return on new technology.5. Large companies need to make new product development more productive if they are to meet their growth goals.Professor Chesbrough does a nice job of developing those themes. He balances theoretical arguments with case histories of recent practices.Of even more value, he explains how companies will have a hard time finding all of the technology they need without help. As a result, he feels that intermediaries will turn out to be important to helping connect organizations. His case histories of such intermediaries are very interesting in showing how difficult it is to play such intermediary roles without deep pockets.For those who are new to the subject of technological innovation in the context of business models, you will find his descriptions of what a business model is (see page 182) and types for assessing your business model (see pages 132-133) to be helpful. The only quibble I would make with his types is that in his examples he assumes relative undifferentiation in industries and business types where there are often large nontechnological differentiations.I found the last chapter to be by far the most helpful, in describing three case histories (IBM, Procter & Gamble, and Air Products) for showing how large organizations went from closed to open business models for the purpose of technological innovation. In fact, the discussion of Procter & Gamble's practices is the best one that I have read. That point, by itself, is sufficient to commend this book to you. I suspect that almost everyone will be doing what Procter & Gamble is doing now ten years hence.Excellent work, Professor Chesbrough!

The book lacks practical advice, focusing more on theory than actionable strategies.

Professor Hank Chesbrough of UC Berkeley has done it again, another insightful book about modern thinking on business. Building on his first book, Open Innovation, Chesbrough goes beyond innovation to put it in the broader context of strategic management. Granted, I have only had opportunity to read 1 pre-release chapter of the book, but I can tell it's going to be an important book for managers-across an entire enterprise-to study.I say it speaks to managers from across an entire enterprise because the book presents a holistic way of thinking about innovation. Chesbrough provides a definition of the Business Model of a corporation that integrates elements from Marketing, R&D, IP Management, Supply Chain Management, Competitive Intelligence, Strategy, Sales, Purchasing, Finance, and even University Relations. HR and accounting weren't integrated, at least not in the chapter I got to read, nonetheless it's an impressively comprehensive synthesis of a vast array of strategic management topics into one concise construct, the Business Model.By having a single definition of a Business Model, managers within a corporation finally have a common language to relate to each other when changes need to occur. This common language is critical to ensuring that innovation happens holistically. For instance, from a company's end-customer's perspective, it doesn't make sense for the company to innovate on its core technology if it doesn't translate into new marketing messages the customer would care about. To pull off integrated innovation, departments in a corporation need to recognize when changes in other departments-that is to say innovation in other departments-should ripple through the organization as innovation in other functional areas of the business.The shared language of a Business Model allows one department or job function such as R&D to suggest a new idea that will have a certain departmental benefit but entails a change to the company's business model. Because all other departments are listening for potential changes to the business model, a signal from another department that a change is coming to the business model can spark cross-functional debate, planning, and cooperation to ensure the change is implemented for global, not local, departmental optimization.Maybe there will even need to be a new profession called the Business Model Manager, akin to a Product Manager, that's responsible for looking after the health of the business model. Will there be a new management association for these professionals? The Business Model Managers Association (BMMA), or will it become an extension of Product Development Management Association?

This is another pretty good book from the author. As in his earlier book, he starts with the motivation for open innovation, which is an old idea but that is not well practiced. In this new book he addresses many of the shorcomings of the first book, such as getting real value out of the partnerships that can be formed while overcoming internal issues, such as NIH. He then talks about different ways companies go about this. What drives you crazy is that he seems unaware that companies have been doing this forever. In the consumer electronics industry, for example, open innovation is mostly the model. Companies like GE, TI, and RCA were examples. In the case of GE and RCA they go back almost 100 years.