Monday, June 30, 2008

Growth Through Outside-In Innovation

Larry Huston, formerly of Procter & Gamble and now of 4inno, presented on Growth Through Outside-In Innovation.

Larry defines Outside-In Innovation as combining the internal and external ideas and assets on a level playing field to create top-line growth through innovation.

Larry showed us some of the open source development that lead to the iPhone, the opening of the iPhone for open source software to create new applications and some new open source financing for iPhone tools.

Some of Larry's lessons on Apple and the iPhone:
  • Open innovation increases the speed to market.
  • Going alone was a disaster (anyone remember the Rokr)
  • Competitors are embracing this model
  • Consumers are expecting open platforms
  • world is moving to open source
  • need a strategy to embrace open
The essence of innovation is bringing together what is possible with what is needed.

Larry gave some background on his story at Procter & Gamble through the Connect and Development program. One of the big questions is how you integrate this into the business. Procter & Gamble has technology entrepreneurs who sit with the product managers and CTOs to evaluate ideas, regardless of the source. The company's vision was to combine 1.8 million outside innovators with the 9,000 internal people. The CEO set a goal of 50% of the new products to developed from this program. This was a big cultural change. Larry spent a lot time while at P&G preaching this message.  He also found bringing success stories to his presentation to be a necessary tool.

For more on this see the article in Harvard Business School's Working Knowledge Archive: P&G's New Innovation Model

Certainly this was an interesting session (and Larry is a really sharp guy), but I am not sure how this fits into the practice of law. Lawyers do not create products. Of course there are innovations in the law: developing new approaches to structuring transactions, new causes of action, etc.  Most of the law is already in the public domain. Court filings are relatively easy to find.  The SEC's Edgar database is full of transaction documents. To me it seems the practice of law is already largely built on combing outside and inside experts and assets. I think there is room for tremendous growth for creating legal information in more public online spaces. Legal OnRamp obviously comes to mind as an online community that is trying to accumulate and organically grow legal knowledge.  But I am not sure how this directly leads to top-line growth like the P&G program.


  1. Do you think it is ethical to have open source software and then market the product with improved features?

  2. @aditya

    Ethical or legal?

    Ethically, if you are improving features then you should be able to market them.

    Legally, it depends on the rights you have to the open source software. That varies. You can look at what RedHat does with Linux.


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