Organising new business development: open innovation at Degussa

Abstract

Purpose – The purpose of this paper is to analyse different organisational tools of business development used in practice. This analysis seeks to address the question of how an organisation can achieve the recurring shift from exploration to exploitation and at the same time manage to balance its open and closed innovation tools. Design/methodology/approach – The empirical basis for analysing the organisational implications of open vs closed innovation is built by Creavis, the business venturing arm of Degussa AG, a specialty chemicals company headquartered in Germany. Findings – Companies face the ambiguity of creating new business options and exploiting these at a later stage. Since exploitative and explorative units require a different organisational set-up, it is difficult for a company to shift its exploratory endeavours to exploitative means. The presented case study offers an answer to this dilemma by showing how organisations manage to combine both by a unique organisational set-up allowing for an evolutionary approach of shifting exploratory work into exploitative results. Practical implications – The insights derived from the case study clearly present a way of dealing with ambidexterity in new business development. The in-depth analysis advances the understanding of how organisations may successfully conduct business development and, in particular, which organisational tools they may use. Originality/value – This paper is based on an original case study by the authors. It integrates management theory with a real life example to foster management research in new business development and the particular question of how to deal with the need of organisations to combine both exploratory and exploitative units and support their interaction as well as employing different approaches to innovation, i.e. open vs closed innovation.