Leading Through Innovation

2009 Recipient
Leading Through Innovation Award

Prof. Henry Chesbrough, PhD 97, Honored for Developing New Innovation Paradigm

When Adjunct Professor Henry Chesbrough, PhD 97, coined the term “open innovation” in a 2003 book, he was a bit ahead of his time. Companies were still in survival mode after the dot-com implosion, and the idea of throwing open their doors to the free flow of ideas seemed risky.

Six years later, Googling the term “open innovation” yields more than 30 million results, and Chesbrough has become widely recognized as one of the nation's leading thinkers on the topic of innovation. Chesbrough’s theory that companies should use global connectivity to their advantage by seeking external ideas outside their own walls — while sharing internal ideas they can’t use with other firms — has become one of the hottest recent business trends.

Chesbrough has been selected as the first recipient of the Haas School’s Leading Through Innovation Award in recognition of his pioneering scholarly efforts in open innovation, innovation in the services sector, and the processes of industrial research and development. The new annual award is being established this year to celebrate Haas alumni who have achieved excellence as innovative leaders and who embody the principles of the school's Leading Through Innovation strategy, thus serving as exemplars to others in the Berkeley Haas community.

“Haas is really undertaking a bold experiment in focusing the school on leadership through innovation,” says Chesbrough. “Many schools pride themselves in leading through research, but leading through innovation is quite different. It recognizes there is value not only in discovering ideas, but in translating them into the market.”

Chesbrough has been at the forefront of that approach. He directs the Center for Open Innovation at Haas and he founded the Berkeley Innovation Forum — a group of 30 companies in a wide range of industries that meets twice a year to exchange ideas, experiences, and knowledge about innovation management.

“Henry Chesbrough has been a leader in developing new theories about innovation and has been especially successful in helping put these new ideas to work — the definition of Leading Through Innovation,” says Dean Rich Lyons. “In so doing, he has created stronger links between our school and the business community. His work is also having a positive impact on our society as a whole.”

In addition to leading the Center for Open Innovation, Chesbrough is now researching his third book, which centers on the services sector. One of his subjects is Spain’s quirky El Bulli restaurant, lauded as one of the world’s best — and most experimental — restaurants. Its menu relies on the research of an outsider: Hervé This, a French chemist who pioneered molecular gastronomy, making possible such creations as slinky-shaped spirals of solidified olive oil, liquid ravioli, and frozen chocolate air.

“El Bulli’s business model is almost as interesting as its cuisine,” Chesbrough says. “Instead of riding the crest of popularity, they deliberately shut down six months every year to research their new menu. They also actively pursue outside partnerships — with a snack-food company, a hotel, and an airline — which is very unusual for a high-end restaurant.”

Chesbrough’s first book, Open Innovation: The New Imperative for Creating and Profiting from Technology, came out when corporate R& D departments had been cut to ribbons but globalization made it impossible to have a monopoly on good ideas. IBM and Proctor & Gamble were the first corporate stalwarts to seize on Chesbrough’s open innovation theory, actively promoting it through special divisions.

His 2006 sequel, Open Business Models: How to Thrive in the New Innovation Landscape, used case studies to explore the importance of incorporating open innovation into a business model. Chesbrough cites the case of Apple, which amplified the value of the iPhone and iPod by encouraging others to develop applications for them.

While he began his research with a Silicon Valley focus, Chesbrough says his theories extend across all sectors, from consumer goods to pharmaceuticals. Although many companies are still unfamiliar with or resistant to open innovation. Chesbrough finds particular satisfaction in the fact that more and more of his students are going on to jobs with “open innovation” in the title.

“Students call me and say they are doing exactly what we talked about in class. They are the ones putting it into practice," he says. “Then it comes full circle when I invite them back to talk about it, to keep us current.”



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