Abstract
We extend the Profit from Innovation (PFI) framework (Teece, 1986) by combining it with open innovation insights: we explore when and how managers make the transition between closed and open innovation, and how they use appropriation (formal and informal defense mechanisms) and project strategies to capture the value generated from the innovation at the project level. Based on a radical innovation project at Jaguar (UK), we contribute to a process and temporal perspective of open innovation by shedding light on two core project processes and their enabling mechanisms which influenced the ability of Jaguar to maximize profits from the innovation. The first core project process was the choice of timing of the shift from a closed to an open model of innovation: it was enabled by a pro-active change in the formal defense strategy (i.e. submission of a patent), and by an internal loose coupling project strategy that involved autonomy of the project champion and internal engineers’ weak membership in the project. The second core process was an external loose coupling project strategy that was enabled by the deployment of two complementary informal appropriation mechanisms namely, the reduction of the scope of tasks allocated to external partners combined with the development of guarded relationships with them.