Knowledge management risks in open innovations: a qualitative assessment

Purpose Open innovation offers a tremendous opportunity for assimilating and commercializing the best knowledge available in a firm’s ecosystem. However, it brings a host of knowledge management risks that have remained obscure in industry and academic discourse. Thus, this study aims to examine the knowledge management risks that make the open innovation process vulnerable to failure as it progresses through different phases, from ideation to commercialization. The study not only aims to identify the risks but also seeks to systematically map them to the distinct phases where they manifest and offer targeted mitigation strategies. Design/methodology/approach The authors used a qualitative research design to address the study’s research questions. Specifically, the authors administered open-ended essays to collect empirical data from employees of firms familiar with the open innovation process. A total of 39 complete responses were received, which the authors analyzed inductively using Gioia’s approach. The results are presented through a data structure comprising 45 first-order concepts, 16 second-order themes and eight aggregate dimensions. Findings This study’s findings revealed three categories of knowledge management risks in the open innovation process: (i) risks in the knowledge discovery process, (ii) knowledge discovery-pre-implementation gaps and (iii) knowledge sharing-execution gaps. The study further identified five categories of potential mitigation strategies to overcome knowledge management risks: (iv) countering opportunistic behavior, (v) offsetting efficacy challenges, (vi) reducing operational issues, (vii) preventing stakeholder disengagement and (viii) avoiding ambiguous deliverables. Originality/value To the best of the authors’ knowledge, this is the first empirical examination of knowledge management risks systematically mapped to three phases of open innovation. This temporal conceptualization of risks that occur as open innovation unfolds through different phases adds a novel dimension to the existing literature on knowledge management in open innovation. In addition to revealing that knowledge management risks vary by phase – necessitating a phase-specific risk-mitigation approach – the authors offer specific mitigation strategies. Overall, the study offers a novel 360-degree perspective on knowledge management risks, starting with sources and ending with potential mitigation strategies to avoid or reduce the potential risks. The authors add value to theory and practice by formulating an open innovation knowledge risk framework comprising three distinct parts to present an integrated overview of all key dimensions.