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Open Innovation Ecosystem: Chez Panisse Case Study Open Innovation Ecosystem: Chez Panisse Case Study by So Hyeong Kim A dissertation submitted in partial satisfaction of the Requirements for the degree of Doctor of Philosophy in the in Science and Mathematics Education Graduate Division of the University of California, Berkeley Committee in charge: Alice M. Agogino, Chair Sara L. Beckman Paul K. Wright Henry W. Chesbrough Fall 2013 Open Innovation Ecosystem: Chez Panisse Case Study ©2013 by So Hyeong Kim The dissertation of So Hyeong Kim, titled Open Innovation Ecosystem: Chez Panisse Case Study, is approved: Chair ____________________________ Date ______________ ____________________________ Date ______________ ____________________________ Date ______________ ____________________________ Date ______________ ABSTRACT Open Innovation Ecosystem: Chez Panisse Case Study by So Hyeong Kim Doctor of Philosophy in Science and Mathematics Education University of California, Berkeley Professor Alice M. Agogino, Chair The concept of open innovation has been highly popularized both in academia and industry for the last decade. Various types of firms have been studied from high tech to service. Yet, there has been limited academic review of open innovation as a collective business ecosystem. In particular, little research exists on how a business ecosystem is generated, how it adopts concepts associated with open innovation in its business practice, and what sustains an ecosystem over time. My dissertation demonstrates how one business entity – Chez Panisse – started its business journey and how it practiced what is popularly called open innovation within its community for over 42 years. In order to do so, I closely observed and participated in understanding the California Cuisine ecosystem to collect data. I employed a single-case study method by incorporating in-depth interviews, participatory observation, as well as a thorough collection of publically available data. The research findings indicate that (1) knowledge spillover was a conduit to expand and grow the Chez Panisse ecosystem, (2) co-creation of products and services with ecosystem participants contributed to collective ecosystem innovation, and (3) social innovation and learning were key factors in strengthening the bond among stakeholders and enabled the ecosystem’s expansion to the national, and global level. I introduce the concept of an Open Innovation Ecosystem as a business ecosystem that co-creates innovations with its stakeholders and captures co-created values collectively within the ecosystem. The Chez Panisse case illustrates how what is popularly referred to as open innovation can be practiced at the level of a business ecosystem and become an important factor in its growth and expansion. The research outcomes suggest that business practitioners should consider employing the approaches identified in this thesis if they are interested in designing, creating and growing or maintaining a business ecosystem. These results additionally indicate that participants of the Chez Panisse open innovation ecosystem stayed engaged because of the educational and social innovation aspects; therefore businesses may want to consider the role that education and social innovation can play in sustaining a healthy business ecosystem. DEDICATION This dissertation is dedicated to my lovely parents, Hanjoo Kim and Kyungae Oh. i TABLE OF CONTENTS 1. Introduction ............................................................................................................. 1 1.1. Background ............................................................................................................. 1 1.2. Problem Statement .................................................................................................. 1 1.3. Introduction of the Chez Panisse Case Study ......................................................... 2 1.4. Research Questions ................................................................................................. 2 1.5. Thesis Outline ......................................................................................................... 3 2. Literature Review .................................................................................................... 5 2.1. Open Innovation ...................................................................................................... 5 2.2. Business Ecosystems .............................................................................................. 8 2.3. Network Ties: Wide vs. Deep, Formal vs. Informal ............................................... 9 2.4. Knowledge Spillover ............................................................................................ 10 3. Research Methods ................................................................................................. 13 3.1. Research Questions ............................................................................................... 13 3.2. Research Design .................................................................................................... 13 3.3. Research Methods ................................................................................................. 13 3.4. Data Collection ..................................................................................................... 14 3.4.1. In-depth Interview ................................................................................................. 14 3.4.2. Participatory Observation ..................................................................................... 18 3.4.3. Public Data ............................................................................................................ 18 3.5. Data Analysis ........................................................................................................ 19 3.6. Chapter Summary ................................................................................................. 19 4. Open Innovation Ecosystems: Closing a Gap in the Open Innovation Literature 21 4.1. Introduction of Innovation Ecosystems ................................................................ 21 4.2. Local Clusters and Communities .......................................................................... 22 4.3. Social Innovation and Learning Communities ..................................................... 23 4.4. Characterization of Open Innovation Ecosystem by Social Impact Factors ......... 25 4.5. Chapter Summary ................................................................................................. 26 5. Open Innovations in Culinary Ecosystems: Introduction of the Chez Panisse Case 27 5.1. Innovations in Culinary Sectors ............................................................................ 27 5.2. Culinary Innovations as a New Product Development Process ............................ 29 5.3. Case Study: Chez Panisse ..................................................................................... 32 ii 5.4. Chapter Summary ................................................................................................. 34 6. Evolution of an Open Innovation Ecosystem: Chez Panisse Case ....................... 35 6.1. Chapter Introduction ............................................................................................. 35 6.2. Evolution of Chez Panisse Ecosystem .................................................................. 35 6.2.1. Stage 1: Birth (1971-1984) ................................................................................... 35 6.2.1.1. Seed Innovation ................................................................................................... 36 6.2.1.2. Vision and Strategy ............................................................................................. 37 6.2.1.3. Stakeholders ........................................................................................................ 38 6.2.2. Stage 2: Local Expansion through Leadership and Open Innovation (1985-1996) 40 6.2.2.1. Co-Evolution with Suppliers and Farmers .......................................................... 40 6.2.2.2. Reflective Menu .................................................................................................. 41 6.2.2.3. Changing Strategy and Business Model .............................................................. 43 6.2.2.4. Other Stakeholders .............................................................................................. 43 6.2.3. Stage 3: Global Expansion through Social Innovation and Education (1996- Present) 46 6.2.3.1. Establishing the Chez Panisse Foundation .......................................................... 46 6.2.3.2. Move to a Global Strategy ................................................................................... 48 6.2.3.3. Stakeholders ........................................................................................................ 48 6.3. Trajectories of Chez Panisse Alumni .................................................................... 50 6.3.1. The Number of Employees ................................................................................... 51 6.3.2. Post-career After Chez Panisse ............................................................................. 51 6.3.3. The ranking of value and knowledge .................................................................... 52 6.3.4. Learning in the Chez Panisse Open Innovation Ecosystem .................................. 53 6.3.5. Tracking of Start-ups ...........................................................................................
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