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Is external networking really the key to company innovation?

Siobhan O'MahonyCompanies are all about “open innovation,” a concept that encourages employees to seek external partners for new and innovative ideas, rather than keeping networking efforts internal.  There are theories that suggests that employees with more external connections bring more innovation and forward-thinking ideas to their company. But do they?

Siobhan O’Mahony, associate professor of strategy & innovation, and Linus Dahlander together with David Gann conducted field research at IBM to explore whether or not searching for new ideas outside of a company led to greater innovation for the company overall. Their article, “A Study Shows How to Find New Ideas Inside and Outside the Company,” explains that, after studying 615 IBM employees as part of this research, their conclusions were not what one would expect.

The article says, “Surprisingly, we found that our respondents’ most common sources of inspiration for new ideas were their colleagues inside, rather than outside, the firm. In contrast with current theories of open innovation, people with broader external networks were no more innovative than people with narrow external networks.”

It’s important to keep in mind that external networking comes with opportunity costs. The article explains, “Time networking outside the firm implies less time learning about the firm’s innovation needs.” And if an individual isn’t reflecting how to apply what it is they learned while away from the firm, the article explains, “then the benefits of the networking aren’t as clear.”

For more details on their findings, read the full article on Harvard Business Review.

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Posted 11 months ago on

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