What would you guess is the first position of management when you suggest you should license your patents to competitors, share your under-utilized trade secrets with threatening startups, and investigate the possibilities of collaboration with your cousins in aligned segments?

The likely response is a swift “are you mad?” as the leadership looks at you with that funny expression you expect when you’ve done something which is not quite socially right.

There is, however, an emerging movement in the innovation space called Open Innovation which suggests you do just this.

The thinking is, if you have unused intellectual property or uniqueness, your best economic interests are served by licensing that to competitors who might make use of it, rather than let it sit idle. And, in reverse, if competitors have something of value you need, that you reach some accommodation with them that lets you make use of it .

Open Innovation is one of the ramifications of the Innovation Economy which is based on the premise that competitive advantage derives from how well you use know-how, not what know-how you have. Knowing how to use know-how well in a particular problem space is a hard to replicate capability that requires development, investment, and (more often than not) long and sustained effort. This is why it is a source of competitive advantage.

Open Innovation is currently a very fashionable business model for innovators working in many different sectors. It is especially popular in industries where products do not have very great levels of differentiation, like fast moving consumer goods. It is also well adopted in industries where the products are very differentiated, such as aerospace.

On the other hand, companies that have chosen not to pursue Open Innovation are tending to lag competitors. This is because they are forced to rely only on their own R&D efforts, rather than taking what’s best from industry around them. Failing to share is turning out to be a significant competitive dis-advantage.

Open Innovation is a methodology that innovators are regularly using to create new value in their businesses. To find out how you can use it it too, read James Gardner’s free, online innovation book.

Increasingly, successful products all have a new must-have feature, and that is “beauty”. I don’t know if you’ve recognized it yet, but everyone seems to be extolling the virtues of their “beautiful” design lately, and I know that personally, when I’m choosing software, for example, I always want to see what it looks like before I’ll be bothered to download.

Beauty may be the new feature, but it is hardly the technological high-ground in the design stakes. That honor goes to Apple, who have gone from Usability, to Beautiful, to Magical. Apparently, when you have something that is “magical”, you’ve really just trumped all competition. Magical implies things that mere beauty doesn’t even attempt. Magical is unexplainable, an enigma that amazes just by being. Even for Apple, that’s a pretty big jump. The rest of us, still doing Usability, can only aspire to Beauty, I suspect, and most of us won’t have even a chance of that. Not everyone can be the prettiest person in the room.

Anyway, there is a point to all this, and it is this: we in large IT organizations always find that whatever feature the consumer has now, they will demand in the workplace in the next two years. Consequently, I’m predicting that we’ll start to have a non-functional requirement around making beautiful experiences when we build systems, and that we’ll be rubbish at it when it happens. We are always surprised when stuff makes the jump from consumer to enterprise, and we never learn each time it happens.

Therefore, in just a few years, we’re going to be make a pretty big decision. Is it the right thing to design “beautiful experiences” for staff, when this will obviously add cost to systems? Let’s face it, it is not like large organizations have service designers who just sit around idle, and neither do they generally have a design mentality when technology is built. This is all stuff which will cost more, at least at the start.

It will be so simple and easy to cut such features as “not essential”.

This leads somewhere difficult though: the comparison between what people have at home and what they have at work is only going to get more odious the more the “beauty-feature” becomes a main differentiator. It won’t matter if our systems are “magical’ in terms of functionality when everyone looks at the interfaces and scrunches up their faces.

My prediction is that there will be further deterioration in the perception of users of their IT suppliers, namely that they can’t deliver to save themselves.

The Beauty-Feature is something that has occupied those working in Innovation Management for some time now. For a detailed examination of this, and other things that concern organizational innovators, read the free, online innovation book by the author of this article.

For every successful product Apple releases, there have been multiple major failures.

Before it released the iPad, it had a product called Newton, a digital assistant that promised the world and bombed badly. Prior to Mac, there was Lisa which was technically superior, but performed so poorly that Apple dumped its excess stock in landfill to get a tax break.

More recently, there’s been Apple TV, which Steve Jobs himself has described as a “hobby”, a product that hasn’t (at least at this stage) radically redefined anything very much.

Granted, it is still early days for the iPad, which could fail to live up to its transformational expectations as well.

The point is Apple has taken some calculated risks with its product, and as a result it has certainly had its share of product failures.

But those who look at companies like Apple with their string of hits almost always conveniently forget the failures still occur, and they happen with a regularity that makes focusing on big hits a very risky business.

In between big hit products, however, Apple spends its time investing in traditional product development using incremental innovations. It has, for example, a backup device called Time Machine. It builds Airport Express, making it simple to set up wireless networks. They are both boring products that pay the bills reliably.

The success of Apple comes not from hits, but because it has a balanced portfolio of innovation. It doesn’t put all its eggs in the transformational product basket, because it knows this results in a very significant concentration of risk. Creating an innovation portfolio with care has resulted in a company which has come back from the dead to challenge powerful players in at least three key markets.

In less than 10 years, Apple has become the leading consumer electronics products company in the world. Innovation portfolios work, and they are one of the only ways to drive reliable growth.

Get predictable growth for your organisation by creating an innovation portfolio. James Gardner’s online, free innovation book will show you how to do it.

A large number of companies have made very good businesses out of doing incremental, rather than radical innovation.

The search giant Google, for example, is a company that’s kept current primarily through repeated incremental innovations.

Apart from the business model innovation created with pay-per-click ads (which incidentally, it did not invent in the first place anyway), Google has spent a great deal of its time innovating in the one thing it does very well.

PageRank, the algorithm that first propelled its success, by making search results results better than competitors, was only an incremental improvement on the search engines of the time. Google has continued its leadership in the area, though, by tweaking and enhancing what it already knows how to do. It has proved a very successful strategy indeed.

Naturally, it is stupid to argue that big hits from radical innovation are always failures. Furthermore, not all firms have had to manage the long series of failures that companies such as Apple have had to endure in order to create those few, golden hit products.

However, the evidence is that those lucky companies which have done this are few and far between. The chances that your company will be similarly lucky are rather slim.

For some people, buying a lottery ticket is a little like an idiot-tax. The ticket is bought in the hope it will win, but in order to secure the win, people have only to put a little change across the counter. They’re buying hope, but more often than not, they experience disappointment when most of the time, they don’t win anything at all.

A focus on radical innovation in the hope it will create a hit product is an idiot-tax on your business. It is not a sensible strategy to leave something to luck when it is possible to reduce the risk of a return by creating a balanced portfolio of innovation which contain both radical and incremental components.

The secret to business growth is a balanced portfolio of innovations, one of the techniques of innovation management. James Gardner’s free online innovation book is an excellent resource if you want to know more. This and other unique content ” articles are available with free reprint rights.

In the past, organizations tried to win by controlling as many physical resources as they could. They wanted factories, and financial control and distribution. “Buy more widgets” they screamed at consumers, as they tried to outdo each other in efficiently producing products and service in a race to ultimate commoditization of everything.

This behavior is the sign of a company entrenched in Industrial Age economics. But this has gently been replaced in the years since the Second World War with Knowledge economics which are quite different. In Knowledge Economics, long term value is driven by intellectual, rather than physical assets. Things such as brands, patents, and know-how. This has been a successful formula for a new generation of companies who derive all their value from what they know how to do: Google and Microsoft are two good examples.

In the present, though, organizations are recognizing a new battleground: creating uniqueness in response to uniqueness, and being better at it than everyone else. The reason for this change is the emergence of a new economic imperative: the Innovation Economy. An innovation economy is not built on know-how, but the ability to make use of it in value-creating ways.

For many organizations, though, the reality is still the day to day of the previous transition – from industrial to knowledge economics. The global economic crisis has proved that control of both does not necessarily result in decent performance.

The changes which are happening are occurring because of the democratization of everything. Consumers can now not only consume, they can also produce, and the result is everything has sped up.

Performing organizations are now taking advantage of this be creating processes to let them innovate rapidly and consistently. The are building Innovation Centres which make these processes part of business as usual, and the most successful are beginning to see spectacular returns on their investments in this area.

Innovation Management is the key to future prosperity in the Innovation Economy. James Gardner’s free online innovation book will tell you how to get started.