6 Open

What if an organisation’s biggest strategic advantage wasn’t control – but openness?

For decades, organisations relied on hierarchy, secrecy, and tight control over information to coordinate work and manage risk. But as digital technologies accelerate transparency, connectivity, and participation, new organisational models are emerging — models that distribute power, involve diverse voices, and treat openness as a strategic advantage rather than a perceived threat.

‘Open’ is not a single practice. It is a design philosophy built on three intertwined pillars:

1. Open Organising – a new way of structuring coordination, power, and participation.

2. Open Strategy – widening the circle of who gets to shape strategic thinking.

3. Open Innovation – harnessing knowledge beyond organisational boundaries.

This chapter helps you understand how open practices work, when they create value, and how they must be balanced with thoughtful risk mitigation. Openness is a spectrum — not a binary choice — and the most successful organisations learn to balance transparency, inclusion, and distribution in ways that enhance strategic execution.

6.1 Open Organising

6.1.1 What is Open Organising?

The most common association of Open is with Open Source Software development, no better illustrated than the brief history of the Linux Operating System, as shown below, based on the work of Nduta (2023).

But open is now a principle for how organisations can work, not just how code is written. And if we look at Open Organising as an operating principle it would go something like:

‘Openness is a general organising principle applicable across various organisational domains’ as opposed to ‘Openness is confined to specific areas like open source software or open data’.

In their paper ‘Openness as an Organizing Principle’ Splitter et al. (2022) argue that openness is best understood not as a fixed organisational state, but as a dynamic organising principle that continuously shapes how organisations coordinate work, make decisions, and relate to external stakeholders. Rather than positioning organisations as simply ‘open’ or ‘closed’, they propose that openness exists along interrelated continua that organisations actively manage over time.

At the core of their framework are three key dimensions of openness, as shown in Figure 6-1.

The first dimension is inclusion versus exclusion, which concerns who is allowed to participate in organisational processes such as problem-solving, innovation, or strategy formation. While broader inclusion can unlock diverse knowledge and creativity, it also raises challenges around coordination, legitimacy, and accountability.

The second dimension is transparency versus opacity, referring to how visible information, processes, and decision rationales are to internal and external audiences. Transparency can enable trust, learning, and participation, but also introduces risks related to overload, misinterpretation, or loss of control.

The third dimension is distributed versus concentrated decision-making, addressing where authority resides and how decision rights are allocated across hierarchies, teams, or communities.

As shown in Figure 6-2, Splitter et al. emphasise that openness is inherently unstable.

Organisations must constantly rebalance openness and closure in response to changing environmental conditions, technological affordances, and strategic priorities. Digital technologies intensify this tension by lowering the cost of participation and information sharing, while simultaneously increasing exposure, speed, and complexity.

Importantly, the authors caution against treating openness as universally beneficial. Instead, they frame it as a situated, strategic choice, shaped by context, purpose, and capability. Successful organisations develop the capacity to selectively open and close across different dimensions, rather than pursuing maximal openness. In this sense, openness becomes an ongoing managerial and organisational practice, not a one-off design decision.

6.1.2 Open Domains

Open practices can be applied across eight domains as follows:

1. Data – provided publicly, available to all but not without challenges (e.g., veracity, continuity).
2. Platforms – accessing digital platforms that connect members of the business network together.
3. Education – knowledge provided widely without limits on usage. This Pressbook is an example of Open Education in action.
4. Science – involving the public in the research process, and making results freely available
5. Government – information provided publicly. This is a principle adopted by many Governments, resulting in the availability of masses of information. Did you know, for example that the indictment levied against President Trump in Manhattan in 2023 is available for all to read?
6. Open-source software – collective development and usage under open licence. This is where it all started!
7. Innovation – leveraging inflows and outflows of knowledge. We will come to this powerful concept later in the chapter.
8. Strategy – sharing strategic insights and participation in process. This powerful augmentation to the strategic management process will be covered in detail in later in this chapter.

In ecosystems where information flows freely and collaboration spans boundaries, open approaches often outperform closed ones.

However — and this is important — openness must be intentional, not naïve. It requires governance, clarity, and thoughtful limits.

6.1.3 Open Balancing Act

Open organising can be viewed as a continuous, dynamic balancing act across three dimensions introduced earlier, specifically:

• Transparency: What information is visible?

• Inclusion: Who participates?

• Distribution: Who decides?

The coupling between these dimensions is also of interest. If transparency is too high without inclusion, this can be interpreted as surveillance. Or if inclusion is too high without distribution, this can result in unproductive crowdsourcing. Alternatively, if distribution is too high without structure this can lead to chaos.

Open organising succeeds by continuously calibrating all three, being aware of the risks arising and constantly mitigating the risks.

6.1.4 Case Study (Synthetic) — CivicBuild

CivicBuild, a city infrastructure provider, adopted open organising to improve project outcomes. They introduced:

• A transparent project dashboard

• Weekly open design sessions

• A distributed decision-making protocol

Within 6 months:

• Design rework dropped by 35%

• Cross-team engagement increased

• Issues were identified earlier

• Trust improved between engineers and planners

Crucially, they did not open sensitive procurement data or security operations — demonstrating that openness must be calibrated.

6.1.5 👍 Topic Summary

Open organising introduces a more transparent, participatory, and distributed approach to work. It enhances alignment, creativity, and trust, when balanced with appropriate safeguards.

• ‘Open Organising’ is defined as a dynamic organising principle with transparency as its primary dimension.
•  The dimensions for Open are transparency – opacity, inclusion – exclusion, and distributed -concentrated decision rights.
• Open is not static but a dynamic process that constantly balances between openness and closure.

6.1.6 Topic Quiz

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6.2 Open Strategy

6.2.1 Drivers and Dimensions

Open strategy involves widening participation in strategic thinking. Rather than strategy being developed exclusively by senior leaders behind closed doors, open strategy invites employees, partners, customers, external experts and even business communities to participate in the strategic management process.

Hautz et al. (2021) define open strategy as:

‘[Open strategy is] an openness in terms of inclusiveness, in other words the range of people involved in making strategy; and an openness in terms of transparency, both in the strategy formulation stage and, more commonly, in the communication of strategies once they are formulated.’

But openness in strategy does not mean full democracy. Instead, it means there are more voices in the thinking process, increased transparency in assumptions and  shared ownership of direction. Open strategy can improve both strategic insight and execution, simply because people support what they help create.

The origins date back to the early 1990s as shown in Figure 6-3 below, when the role that middle managers could take in strategic management was explored by Floyd and Woolridge (1993).

The nuanced practices associated with Open Strategy were comprehensively documented around 2010 with works from Whittington et al. (2011) and Hautz et al. (2017) providing a sound theoretical background that is useful to organisations wishing to adopt Open Strategy practices.

There are three core drivers for Open Strategy. These are:

1. Organisational changes: including accountability to shareholders and a need to justify strategy.
2. Social and cultural changes: where educated workforce demand for more inclusion and transparency.
3. Technological changes: especially the Social Web (Internet 2.0) make widest participation possible.

Hautz et al. (2011) introduce a powerful visualisation of different degrees of openness shown in Figure 6-4. Note that each quadrant of the framework is populated with examples of each option in action.

6.2.2 Open Strategy Dilemmas

In their work on Long Range Planning, Hautz et al., explore the challenges associated with opening up five specific dilemmas, as shown in Figure 6-5 below.

This table shows that organisations must carefully consider the non-obvious implications of opening up strategy so the right approach can be taken to maximise the effectiveness of strategic management.

6.2.3 The Open Strategy Continuum

This presents the opportunity for realising a dynamic approach when movements towards greater openness can be realised by a combination of:

1. Increased transparency, e.g., publicly sharing strategic goals.
2. Increased inclusion, e.g., involve employees in idea generation.
3. Increased transparency and inclusion together, e.g., crowdsourcing and sharing strategic input

and conversely, movements away from openness can be realised by a combination of:

1. Reduce transparency to protect sensitive information.
2. Reduce inclusion to regain control over the process.
3. Reduce both transparency and inclusion due to cost or efficiency concerns.

So in practice we see Open Strategy as a continuum, rather than a once-off transfer of decision making. In this continuum, the nature of openness will vary in different situations and / or organisational context from more closed to more openness. For example, We might see small gestures of transparency and inclusion.  Or equally we might see significant inclusion and change in the logic of strategising.

6.2.4 Case Studies

IBM’s Innovation Jam: Open Strategy at Scale

IBM’s Innovation Jam provides a powerful illustration of Open Strategy in practice — the deliberate expansion of transparency and inclusion in the strategic management process.

By the mid-2000s, IBM was navigating profound industry transformation. The computing landscape was fragmenting, services were becoming central to value creation, and technological complexity was increasing. Strategy could no longer be formulated solely by a small executive elite relying on internal forecasts. The firm faced a structural question: how could it broaden its strategic search without losing coherence?

In 2006, IBM opened a structured, global, online strategy dialogue involving approximately 150,000 participants across more than 100 countries. Employees, customers, partners, academics and others were invited to contribute ideas around future growth domains such as healthcare systems, digital infrastructure and emerging analytics. This was referred to as the Innovation Jam.

Crucially, this was not merely idea generation. It was strategic agenda setting. Senior leaders framed the themes. Participants debated future opportunities. Emerging concepts were visible across the organisation. Transparency was dramatically expanded so that strategy conversations that traditionally occurred in boardrooms were now partially exposed to a global community.

At the same time, inclusion widened. Strategy became participatory rather than exclusively hierarchical. IBM employees were no longer passive recipients of direction; they became contributors to shaping IBM’s future.

Yet Innovation Jam demonstrates the core tension within Open Strategy: openness does not eliminate decision rights. After the Jam concluded, IBM’s executive leadership filtered and selected a small number of initiatives for significant investment. Strategic authority remained concentrated at the top.

Wood and Bjelland’s analysis (2008) reveals that collective discussion did not easily converge into clear strategic choices. Conversations were dispersed, uneven and sometimes repetitive. Extensive executive synthesis was essential. Openness informed strategy but did not replace managerial judgment.

The Jam therefore illustrates the three key dimensions of Open Organising in action

1. Transparency increased as strategic discussions became visible across organisational boundaries.
2. Inclusion expanded as hundreds of thousands participated in agenda formation.
3. Decision rights remained selectively concentrated to ensure coherence and capital allocation discipline.

IBM’s Innovation Jam shows that Open Strategy is about redesigning how strategy is formed, effectively widening the search space while retaining clear mechanisms for prioritisation and commitment.

The lesson is powerful: strategy can be opened without becoming diluted. Openness enhances strategic intelligence; leadership converts that intelligence into clear direction.

Wikimedia: Open Strategy as Participatory Governance

Wikimedia provides a totally different example of Open Strategy embedded at the core of an organisation’s identity.

Unlike firms that selectively open strategic processes, Wikimedia was founded on radical transparency and distributed participation. Its core product (Wikipedia) is created by volunteers. Openness is not an initiative it’s part of the organisation’s reason for existence!

When the Wikimedia Foundation launched its long term strategy process, it did so through large-scale public consultation. Thousands of contributors, affiliates and community members were invited to debate the organisation’s future direction. Strategic drafts were published openly. Discussions were visible and iterative. Participation extended across languages and geographies.

In Open Strategy terms, transparency and inclusion were dramatically expanded. Strategy formation became visible and participatory rather than confined to executive deliberation.

Yet, as Dobusch et al. (2019) explain, openness creates governance dilemmas. Public debate amplified disagreement over Wikimedia’s purpose and priorities. Broad inclusion made consensus difficult. Most significantly, decision rights remained partially concentrated: while the community could influence direction, fiduciary and budgetary authority remained with the Foundation’s Board and executives.

This asymmetry exposed the central tension of Open Strategy. Participation generates legitimacy, but organisations still require closure to act. Wikimedia’s process therefore moved along what Dobusch et al. describe as an openness–closure continuum. Periods of broad consultation were followed by phases of synthesis and executive consolidation.

The resulting ‘2030 vision’ repositioned Wikimedia as essential infrastructure for free knowledge. However, the process demonstrated that opening strategy transforms power dynamics. Strategy becomes negotiated governance rather than managerial decree.

Wikimedia shows that Open Strategy is not about eliminating hierarchy, but about continuously recalibrating the balance between transparency, inclusion and concentrated decision rights. Openness strengthens legitimacy — but coherence depends on disciplined closure.

6.2.5 👍 Topic Summary

Open strategy widens participation in strategic thinking, improving insight and execution. It works when well-scoped, facilitated, and synthesised — not when treated as an unbounded free-for-all.

• Open Strategy is the increased transparency and inclusion of stakeholders in the strategic management process.
• Organisation must embrace dilemmas of process, commitment, disclosure, empowerment, and escalation to realise Open Strategy.
• Open Strategy is a dynamic practice where the correct balance between the dimensions and dilemmas are constantly re-evaluated.

6.2.6 Topic Quiz

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6.3 Open Innovation

6.3.1 The Logic of Open Innovation

For much of the twentieth century, firms operated  closed innovation. Innovation was assumed to occur internally: companies hired the best scientists, invested heavily in R&D laboratories, protected intellectual property, and commercialised discoveries through vertically integrated business units. Success depended on controlling the entire innovation pipeline.

Chesbrough (2003) argued that this logic no longer holds in a world characterised by mobile talent, venture capital, distributed expertise, and digital connectivity. Knowledge is no longer scarce or geographically contained within elite laboratories. It is abundant, fluid, and often external.

Open Innovation therefore rests on three fundamental propositions:

1. Not all the smart people work for you. Valuable knowledge resides in universities, start-ups, suppliers, customers, and even competitors.
2. Internal ideas can have external paths to market. If a firm cannot commercialise an idea internally, it may still capture value through licensing, spin-outs, or partnerships.
3. External ideas can enhance internal innovation. Firms should actively scan, absorb, and integrate knowledge from outside their boundaries.

This shift reflects a fundamental structural change in how knowledge is organised in the economy, and is shown in Figure 6-6.

This is consistent with Splitter et al. (2022) Open Organising, which analyses openness across three dimensions:

1. Transparency (information sharing),
2. Inclusion (who participates),
3. Decision rights (who has authority).

Open innovation is not about uncontrolled openness. It is about designed permeability. Organisations must consciously decide where boundaries should open and where they should remain closed. Competitive advantage shifts from controlling knowledge to orchestrating knowledge flows. Closed innovation systems miss opportunities and slow progress.

6.3.2 Benefits & Usage

Open innovation does more than provide firms with more ideas. Its deeper value lies in reshaping how organisations think about knowledge, risk, and growth:

Under a closed model, innovation is constrained by the firm’s internal capabilities, resources, and imagination.

Under an open model, the opportunity space expands dramatically. Firms can build on discoveries made elsewhere, recombine knowledge across domains, and accelerate development by avoiding duplication.

In many industries, this speed advantage is decisive. The firm that integrates knowledge most effectively often outperforms the firm that invents first.

A second benefit is risk redistribution. Technological and market uncertainty are inherent to innovation. When firms collaborate with universities, start-ups, suppliers, or even competitors, they spread that uncertainty across a network. Joint ventures, research partnerships, and venture investments allow firms to explore multiple options simultaneously rather than committing fully to a single internal trajectory. In highly dynamic markets, this portfolio logic increases resilience.

Open innovation also changes how firms capture value from intellectual property referred to Lenox (2023) in Chapter 3 as ‘appropriating’. In the closed paradigm, unused patents often sit dormant, treated as defensive shields. In the open paradigm, intellectual property becomes an asset that can be licensed, cross-licensed, or spun out.

Chesbrough emphasises that business models, not technologies alone, determine value capture. A technology that does not fit one company’s strategic logic may be highly valuable in another context. Openness allows firms to monetise ideas that would otherwise remain economically inactive.

Perhaps most significantly, open innovation supports ecosystem-based competition. Increasingly, firms do not compete as isolated entities but as members of networks. Platforms, developer communities, and industry consortia illustrate how innovation now emerges from coordinated systems rather than individual organisations. Firms that learn to orchestrate these ecosystems — shaping standards, APIs, and governance mechanisms — can achieve durable strategic positions without owning every component internally.

However, openness is not universally beneficial. Research suggests that the performance gains from open innovation depend on the firm’s ability to recognise, assimilate, and apply external knowledge. This is referred to as absorptive capacity. Firms lacking integration capabilities may become overwhelmed by complexity. Thus, open innovation is most powerful when strong internal competencies are combined with deliberate external engagement.

6.3.3 Risks & Mitigation

Open innovation expands opportunity, but it also introduces new strategic tensions. The challenge is not whether to be open, but how to govern openness effectively. Figure 6-7 summarises the principal risks and corresponding mitigation mechanisms.

6.3.4 Case Studies

Xerox PARC: Innovation Without Capture

Xerox PARC remains one of the most instructive examples in innovation management.

PARC generated extraordinary breakthroughs, including graphical user interfaces, Ethernet networking protocols, and laser printing technologies. These innovations laid foundations for the personal computing revolution.

Yet Xerox struggled to appropriate much of the value created at PARC. Many technologies were commercialised externally, most notably by Apple, Adobe, and 3Com.

The root problem was not technical incompetence. Nor was it a lack of creativity. Rather, Xerox’s innovation architecture was tightly coupled to its existing copier business. New technologies were evaluated through the lens of their fit with established revenue streams. When innovations did not align clearly with the core business model, they were deprioritised or spun out.

Chesbrough argues that Xerox’s difficulty stemmed from its closed innovation logic. The firm lacked flexible pathways to experiment with alternative commercialisation models. It treated innovation as a linear pipeline from research to existing business units, rather than as a portfolio of possible trajectories.

In contrast, venture capital–backed start-ups that emerged from PARC were free to experiment with new markets and configurations. They could pivot rapidly, explore new applications, and align technologies with emerging industries.

Xerox’s experience highlights a crucial lesson: invention alone does not generate value. Without adaptive business models and openness to external pathways, even groundbreaking technologies may fail to translate into strategic advantage.

IBM: Strategic Openness as Repositioning

IBM provides a powerful illustration of how open innovation can be strategically integrated rather than adopted reactively.

Throughout much of the twentieth century, IBM epitomised closed innovation. Its internal research laboratories drove fundamental advances in computing, storage, and systems architecture. The firm controlled key components of the value chain and captured value through proprietary integration.

By the 1990s, however, the computing landscape had shifted. Modular architectures were fragmenting the industry. Open-source software communities were gaining legitimacy. Venture-backed start-ups were commercialising innovations at increasing speed. IBM faced a structural decision: defend its vertically integrated model or adapt to a distributed innovation ecosystem.

IBM chose adaptation.

Its engagement with Linux is emblematic. Rather than opposing open-source software, IBM invested in it. By contributing to Linux development, IBM strengthened a platform that stimulated demand for its enterprise services and infrastructure solutions. The firm redefined value capture around integration, consulting, and systems reliability rather than proprietary control of operating systems.

Simultaneously, IBM professionalised its intellectual property strategy. Rather than hoarding patents defensively, it developed a structured licensing programme that generated significant revenue streams. Intellectual property became not only a shield but a tradable asset.

Importantly, IBM did not dismantle its research capability

Instead, it repositioned it. Internal R&D became a source of platform contributions and ecosystem leverage. Openness complemented, rather than replaced, internal competence.

IBM’s transformation demonstrates that open innovation is not about weakening the firm’s boundaries; it is about redefining their function.

6.3.5 👍 Topic Summary

Open innovation leverages external knowledge to accelerate creativity and reduce risk. Success requires openness combined with clear guardrails, governance, and strategic intent.

• Open Innovation realises a business model that views organisation boundaries as permeable, sourcing ideas from outside and sharing inventions.
• IBM demonstrate the move from a closed to an open organisation whist driving competitive advantage.
• Leveraging external ideas should play a significant role in an organisation’s approach to innovation.

6.3.6 Topic Quiz

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6.4 Chapter Summary

Chapter 6 explores openness as a powerful organisational principle that enhances transparency, participation, and innovation.

1. Open Organising shows how open practices reshape work design.
2. Open Strategy demonstrates how widening participation improves strategic insight and alignment.
3. Open Innovation highlights the competitive advantage gained by harnessing knowledge beyond organisational boundaries.

Openness is not an ideology, moreover it is a thoughtful organisational design choice. When balanced with appropriate safeguards, open creates more adaptive, creative, and resilient organisations.

6.5 References

1. Chesbrough, H.W. (2003). Open Innovation: the New Imperative for Creating and Profiting from Technology. Boston, Mass.: Harvard Business School Press.
2. Dobusch, Laura & Dobusch, Leonhard. (2019). The Relation between Openness and Closure in Open Strategy: Programmatic and Constitutive Approaches to Openness. 10.1017/9781108347921.020.
3. Hautz, J., Seidl, D. and Whittington, R. (2017). Open Strategy: Dimensions, Dilemmas, Dynamics. Long Range Planning, 50(3), pp.298–309. doi:10.1016/j.lrp.2016.12.001.
4. Isomäki, A. (2018). Open Innovation – What is it, and how to do it. [online] Available at: https://www.viima.com/blog/open-innovation.
5. Lipp, A., Marshall, A. and Dencik, J. (2021). Open the door to open innovation. [online] IBM. Available at: https://www.ibm.com/thought-leadership/institute-business-value/report/open-innovation [Accessed 30 Oct. 2024].
6. Splitter, V., Whittington, R., Walgenbach, P., Dobusch, L. and von Krogh, G. (2022). Openness as Organizing Principle: Introduction to the Special Issue. Organisational Studies, 44(1), pp.7–27. doi:https://doi.org/10.1177/01708406221145595.
7. Stadler, C., Hautz, J., Matzler, K. and Friedrich, S. (2023). Open Strategy. MIT Press.
8. Whittington, R., Cailluet, L. and Yakis-Douglas, B. (2011), Opening Strategy: Evolution of a Precarious Profession. British Journal of Management, 22: 531-544. https://doi.org/10.1111/j.1467-8551.2011.00762.x
9. Wood and Bjelland (2008). An inside view of IBM’s ‘Innovation Jam’. MIT Sloan Management Review, [online] pp.32–40. Available at: https://go.openathens.net/redirector/leeds.ac.uk?url=https://www.proquest.com/scholarly-journals/inside-view-ibms-innovation-jam/docview/224960315/se-2.