For decades, the dominant belief in enterprise organizations was clear: competitive advantage requires keeping innovation internal. Proprietary R&D. Closed teams. Ideas developed behind walls before they ever see the market.
That assumption is increasingly wrong — and the organizations holding onto it are paying the price.
The Insular Innovation Model Is Showing Its Age
The logic behind closed innovation made sense in a different era. When information moved slowly and talent was concentrated inside large corporations, keeping R&D internal was a legitimate moat. But the conditions that made that model work have fundamentally changed.
Talent is distributed. Knowledge is accessible. Startups are moving faster than internal teams on problems enterprises have been stuck on for years. The idea that the best thinking about your industry lives exclusively inside your organization is no longer a defensible position — it’s an organizational blind spot.
What Open Innovation Actually Means in Practice
Open innovation isn’t about abandoning internal R&D. It’s about acknowledging that valuable ideas exist outside organizational boundaries — and building systematic ways to access them.
Customers experience problems that internal teams never encounter. Suppliers see inefficiencies that are invisible from the inside. Universities are generating research that has direct commercial relevance. Startups are solving adjacent problems with approaches that established teams wouldn’t naturally explore.
The practical mechanisms worth exploring include:
- University partnerships — co-developing research with academic institutions that have both the talent and the time horizons to tackle hard problems
- Startup Engagements — structured engagements that surface novel approaches to defined business challenges, fast
- Complementary company collaborations — working with non-competing organizations to build integrated solutions neither could develop alone
- Customer co-creation — bringing lead users into the development process rather than treating them purely as feedback sources
Each of these is a deliberate structure for importing external thinking — not an informal suggestion box.
The Real Barrier Isn’t Structural — It’s Psychological
What makes open innovation genuinely difficult isn’t finding external partners. It’s the organizational psychology of innovation teams built around internal capability.
When an outside idea gains traction, there’s an implicit message that travels with it: “We couldn’t solve this ourselves.” That narrative, even when unspoken, creates resistance. Teams de-prioritize external inputs. Partnerships stall in procurement. Promising collaborations die in committee.
Overcoming this requires more than a new process — it requires a deliberate cultural shift, one where external collaboration is framed not as admitting weakness but as expanding capability. Executive sponsorship matters enormously here. When leadership visibly champions an open innovation partnership, it signals to the broader organization that external ideas aren’t a threat to internal teams — they’re an extension of them.
What This Means for the Innovation Agenda
The conversation worth having in any innovation leadership team right now is whether external partnerships are truly core to the strategy — or quietly treated as peripheral, nice-to-have activity.
The distinction matters. Peripheral partnerships get de-prioritized when internal pressures mount. Core partnerships get resourced, governed, and championed even when things get difficult. The organizations building genuine open innovation muscle are treating it as the former, not the latter.
A Note for Founders on Enterprise Positioning
For founders building products or solutions that touch enterprise challenges — the framing of how you show up matters as much as what you’re building.
Enterprise innovation leaders are actively looking for external partners right now. The question worth considering is whether your startup is positioning itself as a vendor in a procurement process, or as an innovation partner in a strategic one. The conversation, the stakeholder, and the outcome are entirely different depending on which door you walk through.
How is your organization approaching the boundary between internal and external innovation? Is the door open, cracked, or still firmly shut? Let’s keep learning — together.
harish.balasubramanian 
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