International large ICT company growth through innovation – from closed to open innovation – Case Nokia

Abstract

Top innovative companies project growth at a rate several times faster than less-innovative companies. Established, large companies are viewed as better executors and optimizers of their current products, rather than deliverers of breakthrough or radical innovations. Such companies, which operate in mature, competitive markets, must place a higher priority on breakthrough innovations to ensure further growth and higher revenues.

There is no single formula for successful innovation, but identifying some key characteristics of innovation leaders highlights specific areas for business and innovation growth. The best innovation leaders expand their innovation to their full value chain. Implementing the open innovation principles proposed by Chesbrough helps companies search for new revenues and save on research and development costs. Companies must carefully decide, what type of innovation can be shifted to external innovators. Companies planning to fully benefit from open innovation need to improve their internal innovation processes, and move their strategy, execution, organizational structure, and innovation culture from closed innovation toward open innovation principles.

The purpose of this research is to study how the principles of open innovation are applied at a large, international information and communication technologies company. The thesis examines the existing literature on innovation management to create a comprehensive view of the leading practices of high-performing innovators. This research seeks to examine how the key elements of open innovation, as identified in innovation management literature, fit into the growth strategy of a large, established company aiming to transform itself into a leading innovator.

Qualitative research was conducted using interviews with twelve individuals from different levels within the single case study organization as the primary data collection method.

Results indicate that innovation strategy at the case company is fully aligned with business strategy only in the business group geared toward executing their transformation ambitions. The elements of open innovation are recognized and used at the case company; however, resources for innovation are mainly reserved for current markets. Without converting the intention to innovate into budget allocations and institutionalizing the breakthrough innovation process, including open innovation and new business models, growth the company desires may not materialize. Despite earlier culture improvement efforts, the company’s innovation culture has suffered from several previous and ongoing restructuring activities.