Thriving in the New Innovation Landscape

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If all goes well, the person who suggests a more open model will get some credit, but the danger is that he or she will then be asked to do more with less internal resources next time around.

One way to combat resistance is to offer incentives to researchers who could help the company by tapping into a network outside the company rather than concentrating solely on internal R&D. Now, most companies only reward research staff for internally developed projects. When R&D staffers get a patent, most companies will give those researchers some money and a plaque.

But what about offering rewards for the researcher who brings in tech from outside, especially if such a move solves a business problem? This might prompt researchers to help widen the pool of outside collaborators or introduce the company to new, efficient tech.

You warn about the dangers of being "too open." Do nondisclosure agreements or no-compete clauses offer enough protection against the poaching of ideas?

Even if both sides sign a legal document, it's not enough. Larger companies can maneuver around them. They can learn about your business and then create a similar but different enough technology that competes with you. For a small company, it's important to be careful, don't say too much too soon.

It's important, too, to have an alternative big-name potential collaborator for leverage when considering partnering with a larger company. Ideally, the alternative partner would be a competitor of the first. Finally, it's essential to really understand the business model of the potential partner. If it's aligned with yours, go for it.

One company I mention in my book, GO, wanted to collaborate with Microsoft (MSFT), but failed to realize Microsoft's business model would force Redmond to eventually compete with GO. It's a big mistake to think some piece of paper will save you, or that the larger company will buy you. These are high-risk approaches.

In some cases, your support of "open business models" goes so far as to include pirating. How can that be good for a company?

Microsoft should allow the practice as part of its battle to make Windows the dominant operating system in China, where software pirating is rampant. See, if they saw pirating as part of their battle against Linux, they'd understand that every pirated copy of Windows is another copy of Linux not being sold. If they truly cut off pirated copies in China, where Windows can cost up to a month's wages for most workers, they'd lose market share.

Jana is the Innovation Dept. editor for BusinessWeek.